US financial reporting requirements

US persons35 are required to file a “Report of Foreign Bank and Financial Accounts” (FBAR), FinCEN Form 114, each year if they have a financial interest in any financial accounts, including bank, securities or other types of financial accounts, in a foreign country, and if the aggregate value of these foreign (non-US) financial accounts exceeds $10,000 at any time during the calendar year. In addition, a US person who has signing authority over a foreign bank or financial account, even if they have no financial interest in the account, must also file this report.

Among others, this filing requirement will impact US citizens resident in Canada that have Canadian bank, investment, and registered accounts, such as RRSPs or RESPs, if the total value in all of their non-US financial accounts exceeds US $10,000 at any time in the 2016 calendar year.

The 2016 report must be e-filed with FinCEN by April 15, 2017. Since significant penalties can be assessed for failure to file the report when required, you should consult with your professional adviser to determine if you’re required to file this report.

35 This includes US citizens or residents, US corporations, partnerships, trusts or estates.

Exchange of information between Canada and the United States

An agreement between Canada and the US was signed on February 5, 2014, under which Canadian financial institutions are now required to report to the CRA certain information that is provided to the Internal Revenue Service (IRS). The CRA similarly receives financial information from the US in respect of Canadian residents who hold accounts at US financial institutions.

A variety of registered accounts (including RRSPs) and smaller deposit-taking institutions with assets of less than $175 million are exempt from these reporting requirements.

This new reporting regime came into effect in July 2014, with information exchanges beginning in 2015.