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Information about how FATCA may affect Global Banking and Markets clients.
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Information about how FATCA may affect Private Banking clients.
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Commercial Banking – Canada
The CRA administers tax laws for the government of Canada and for most provinces and territories.
FFI is the abbreviation for a foreign financial institution. It refers to a non-US financial institution. The FATCA legislation contains an extensive definition of FFI and includes entities such as banks, custodian institutions, investment funds and certain types of insurance companies.
Withholding certificates, also referred to as W forms, are US Internal Revenue Service (IRS) tax forms.
The W-9 form is a ‘request for taxpayer identification number and certification’. This US tax form can be provided by an account holder to confirm and certify their US status. The W-8 series forms can be used by foreign persons (including corporations) to certify their non-US status. The forms establish that one is a non-resident alien or foreign corporation, to avoid or reduce tax withholding from US source income. These forms will permit a non-US customer to self-certify their status under FATCA.
At HSBC Bank Canada, we are using the Declaration of Tax Residence for Entities (382KB, PDF): Download PDF: Link opens in a new window form with commercial account holders. It is a CRA designed form for the dual purposes to certify both the customer’s FATCA and CRS status. For more information on CRS, please visit the HSBC Common Reporting Standard site.
An IGA is an agreement between the US and specific countries to build FATCA compliance into the country’s legal framework so that the country can implement FATCA. An IGA, and related domestic legislation and guidelines, will require financial institutions to provide the information on US accounts which they hold either:
The IRS is the United States government agency responsible for tax collection and tax law enforcement.
A non-financial foreign entity (NFFE) is a non-US incorporated/established entity that does not meet the definition of an FFI and includes:
A US IRS-specific term: tax identification number.
For an individual this would be their US social security number, for an entity their employer identification number.
The term ‘specified US person’ means any US person other than:
The term ‘US person’ means:
The term "Controlling Person" means the natural person who exercises control over the Entity. For non-trust Entities, whether an individual is a "Controlling Person" is generally determined by reference to a 25% level of ownership. In the case of a trust, the term "Controlling Person" means the settlor (grantor), the trustees, the protector (if any), the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate effective control over the trust and in the case of a legal arrangement other than a trust, such term means persons in equivalent or similar positions.
The term ‘US citizen’ means:
In certain circumstances, a 30% withholding tax applies under FATCA on US income in respect of non-compliant financial institutions.
(Page last updated September 2018)