The Investment Funds Institute of Canada (IFIC) is commending the federal government for the exemptions and relief it has secured on behalf of Canadian investors through an agreement negotiated with the U.S. government to implement the Foreign Account Tax Compliance Act (FATCA).
The government announced the deal Wednesday.
Under the agreement, registered plans, including RRSPs, RRIFs, RESPs, RDSPs and TFSAs, are exempted from FATCA and will not be reportable.
“This will benefit the millions of Canadians who hold mutual funds in these types of plans,” IFIC said in a release.
The agreement also safeguards investors by ensuring that Canadian financial institutions will not be required to close client accounts or send any reporting directly to the IRS, IFIC notes.
“On behalf of Canadian investors, we want to recognize the government for its dedication in working to reduce the impact of FATCA on Canadian investors,” stated Joanne De Laurentiis, IFIC’s president and CEO.
“The exemptions and relief secured by the Canadian government under the agreement will provide welcome relief to Canadian investors who may be subject to U.S. tax rules as they save for retirement and other important life events.”
While the release of the IGA represents a major step, details of how financial institutions will be required to implement the IGA will be contained in implementing legislation.
IFIC says it will be reviewing the legislation and guidelines when they are released.