FATCA and CRS Foreign Tax Residency

Tax Residency

You acknowledge providing us with your country (or countries) of tax residency, either at the time of account opening or within 30 days with respect to any change in circumstances regarding your tax residency.

It is your responsibility to determine where you are resident for tax purposes, and if you are unsure whether or not you are a resident of Canada for tax purposes and/or a tax resident of another country or countries, review information available at the Canada Revenue Agency, U.S. government websites, the Organization for Economic Cooperation and Development (OECD), and/or seek professional tax advice.

OECD website: http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency (opens to external site)

You may be required to provide additional documentation to support your residence status for tax purposes.

Guidance on the Common Reporting Standard (CRS):

Financial accounts that are reported to the CRA are shared with the government of a foreign jurisdiction that an individual or entity is a resident for tax purposes when Canada has an exchange relationship with that jurisdiction. We will be required to automatically report specific information to the CRA on an annual basis. The CRA may in turn forward information about you and your account to the other country.

Guidance on the Canada-U.S. Enhanced Tax Information Exchange Agreement - Foreign Account Tax Compliance Act (FATCA):

In the case of the United States, the CRA also shares the information with the Internal Revenue Service (IRS) when an individual or entity is a U.S. person. The IRS definition of a “United States Person” for U.S. tax purposes includes a citizen or a resident of the United States. A citizen of the U.S. (including an individual born in the U.S.) who is a resident in another country for tax purposes can still be a U.S. person if they have not renounced their U.S. citizenship.

Guidance on the Canada-U.S. Enhanced Tax Information Exchange Agreement - Foreign Account Tax Compliance Act (FATCA):

In the case of the United States, the CRA also shares the information with the Internal Revenue Service (IRS) when an individual or entity is a U.S. person. The IRS definition of a “United States Person” for U.S. tax purposes includes a citizen or a resident of the United States. A citizen of the U.S. (including an individual born in the U.S.) who is a resident in another country for tax purposes can still be a U.S. person if they have not renounced their U.S. citizenship.

Tax Identification Number (TIN)

You acknowledge providing us with your Tax Identification Number(s) associated with your tax jurisdiction(s). A TIN is a unique identifying number used for tax purposes. Where the jurisdiction of tax residence issues a TIN, we are required to collect and report the TIN. If you are not eligible or unable to obtain a foreign TIN, you must provide a reasonable explanation. We may request from you and collect your TIN through various channels such as in-person, mail, email, phone or online.

Penalties

The CRA requires financial institutions to obtain from you a self-certification of tax residency when required. Under FATCA and CRS regulations, RBC may be liable to a penalty of up to $2,500 for each such failure under subsection 162(7) of the Income Tax Act.

As such, failure to provide a valid self-certification under FATCA or CRS will result in the temporary restraint of your account until such time as it is provided to us and verified.

If you fail to provide a U.S. TIN when required under FATCA, you may be assessed a penalty of $100 by the CRA directly.

If you fail to provide a TIN for another jurisdiction as required under CRS, you may be assessed a penalty of $500 by the CRA directly.

Entity Classification

If your business has an entity classification for the purposes of FATCA and CRS, the business and any Controlling Persons, if applicable, must provide a self-certification of residency for tax purposes. The Controlling Person of an entity is defined as the natural person(s) who exercise control over the account(s).

Please visit https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/enhanced-financial-account-information-reporting/information-entities-holding-accounts-canadian-financial-institutions.html (opens to external site) for more information. We may rely on information in our possession including the Standard Industrial Code (SIC) to confirm the entity classification.

Citizenship by Investment / Residence by Investment (CBI/RBI) Scheme

As per the Organization for Economic Cooperation and Development (OECD) (opens to external site)

To the extent that the account holder, or controlling person has identified to have tax residence in a jurisdiction offering a potentially high-risk CBI/RBI scheme, we may require further confirmation that the provided self-certification or documentary evidence is correct and reliable.