Under the IGA, the term "Financial Institution" (or
"FI") includes custodial institutions, depository
institutions, investment entities and specified insurance
For this purpose, the term "Custodial Institution" is
generally defined as any Entity that holds, as a substantial
portion of its business, financial assets for the account of
others; the term "Depository Institution" is generally
defined as any Entity that accepts deposits in the ordinary course
of a banking or similar business; the term "Investment
Entity", is generally defined as any entity that conducts as a
business (or managed by an entity that conducts as a business) any
of the following activities or operations for or on behalf of a
customer: (i) trading in money market instruments, foreign
exchange, exchange, interest rate and index instruments,
transferable securities, or commodity futures trading; (ii)
individual and collective portfolio management; or (iii) otherwise
investing, administering, or managing funds or money on behalf of
other persons; and the term "Specified Insurance Company"
is generally defined as any Entity that is an insurance company (or
the holding company of an insurance company) that issues, or is
obligated to make payments with respect to, a Cash Value Insurance
Contract or an Annuity Contract.
Specifically, while Canadian FIs will not be required to enter
into an agreement with the Internal Revenue Service, if not
otherwise exempt from FATCA under the IGA (e.g., certain pension
and retirement funds) , a non-exempt Canadian FIs will be required
to register on the IRS FATCA portal and receive a Global
Intermediary Identification Number (GIIN) in order to be
The recommended deadline to register on the IRS online portal
and obtain a GIIN is on or before April 25, 2014. Canadian FIs that
do not register with the IRS by April 25, 2014 can find themselves
subject to the 30% FATCA withholding tax on US source income - such
as dividends, interest - paid starting July 1, 2014. This is
because US withholding agents will determine a Canadian FI's
status as being non-compliant with FATCA by reviewing the IRS
published list, (i.e., the IRS will publish its first list of
registered foreign FIs by June 2, 2014 and will update this list on
a monthly basis thereafter), and should a Canadian FI not be
reflected on the IRS published list, the FATCA withholding tax will
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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