Agreement Between the Government of the United States of America and the Government of 

Canada to Improve International Tax Compliance through Enhanced Exchange of Information 

under the Convention Between the United States of America and Canada with Respect to Taxes on 

Income and on Capital 

Whereas, the Government of the United States of America and the Government of Canada (each, a 

“Party,” and together, the “Parties”) have a longstanding and close relationship with respect to mutual 

assistance in tax matters and desire to conclude an agreement to improve international tax compliance by 

further building on that relationship;

Whereas, Article XXVII of the Convention Between the United States and Canada with Respect to Taxes 

on Income and on Capital done at Washington on September 26, 1980, as amended by the Protocols done 

on June 14, 1983, March 28, 1984, March 17, 1995, July 29, 1997, and September 21, 2007 (the 

“Convention”) authorizes the exchange of information for tax purposes, including on an automatic basis;

Whereas, the United States of America enacted provisions commonly known as the Foreign Account Tax 

Compliance Act (“FATCA”), which introduce a reporting regime for financial institutions with respect to 

certain accounts;

Whereas, the Governments of Canada and the United States of America are supportive of applying the 

underlying policy goal of FATCA on a reciprocal basis to improve tax compliance;

Whereas, FATCA has raised a number of issues, including that Canadian financial institutions may not be 

able to comply with certain aspects of FATCA due to domestic legal impediments; 

Whereas, the Government of the United States of America collects information regarding certain 

accounts maintained by U.S. financial institutions held by residents of Canada and is committed to 

exchanging such information with the Government of Canada and pursuing equivalent levels of 

exchange;

Whereas, the Parties are committed to working together over the longer term towards achieving common 

reporting and due diligence standards for financial institutions;

Whereas, the Government of the United States of America acknowledges the need to coordinate the 

reporting obligations under FATCA with other U.S. tax reporting obligations of Canadian financial 

institutions to avoid duplicative reporting;

Whereas, an intergovernmental approach to FATCA implementation would facilitate compliance by 

Canadian financial institutions while protecting the ability of Canadians to access financial services;

Whereas, the Parties desire to conclude an agreement to improve international tax compliance and 

provide for the implementation of FATCA based on domestic reporting and reciprocal automatic 

exchange pursuant to the Convention and subject to the confidentiality and other protections provided for 

therein, including the provisions limiting the use of the information exchanged under the Convention;

Now, therefore, the Parties have agreed as follows:
2

Article 1

Definitions

1. For purposes of this agreement and any annexes thereto (“Agreement”), the following 

terms shall have the meanings set forth below:

a) The term “United States” has the same meaning as in the Convention. Any 

reference to a “State” of the United States includes the District of Columbia.

b) The term “U.S. Territory” means American Samoa, the Commonwealth of the 

Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, or the U.S. 

Virgin Islands.

c) The term “IRS” means the U.S. Internal Revenue Service.

d) The term “Canada” has the same meaning as in the Convention. 

e) The term “Partner Jurisdiction” means a jurisdiction that has in effect an 

agreement with the United States to facilitate the implementation of FATCA. The 

IRS shall publish a list identifying all Partner Jurisdictions.

f) The term “Competent Authority” means:

(1) in the case of the United States, the Secretary of the Treasury or the 

Secretary’s delegate; and

(2) in the case of Canada, the Minister of National Revenue or the Minister of 

National Revenue’s authorized representative.

g) The term “Financial Institution” means a Custodial Institution, a Depository 

Institution, an Investment Entity, or a Specified Insurance Company.

h) The term “Custodial Institution” means any Entity that holds, as a substantial 

portion of its business, financial assets for the account of others. An entity holds 

financial assets for the account of others as a substantial portion of its business if 

the entity’s gross income attributable to the holding of financial assets and related 

financial services equals or exceeds 20 percent of the entity’s gross income during 

the shorter of: 

(1) the three-year period that ends on December 31 (or the final day of a noncalendar year accounting period) prior to the year in which the 

determination is being made; or 

(2) the period during which the entity has been in existence.

i) The term “Depository Institution” means any Entity that accepts deposits in the 

ordinary course of a banking or similar business. 
3

j) The term “Investment Entity” means any Entity that conducts as a business (or 

is managed by an entity that conducts as a business) one or more of the following 

activities or operations for or on behalf of a customer:

(1) trading in money market instruments (cheques, bills, certificates of 

deposit, derivatives, etc.); foreign exchange; exchange, interest rate and 

index instruments; transferable securities; or commodity futures trading;

(2) individual and collective portfolio management; or

(3) otherwise investing, administering, or managing funds or money on behalf 

of other persons.

This subparagraph 1(j) shall be interpreted in a manner consistent with similar 

language set forth in the definition of “financial institution” in the Financial 

Action Task Force Recommendations.

k) The term “Specified Insurance Company” means 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.

l) The term “Canadian Financial Institution” means 

(1) any Financial Institution that is resident in Canada, but excluding any 

branch of such Financial Institution that is located outside Canada, and 

(2) any branch of a Financial Institution that is not resident in Canada, if such 

branch is located in Canada.

m) The term “Partner Jurisdiction Financial Institution” means 

(1) any Financial Institution that is established in a Partner Jurisdiction, but

excluding any branch of such Financial Institution that is located outside 

the Partner Jurisdiction, and 

(2) any branch of a Financial Institution that is not established in the Partner 

Jurisdiction, if such branch is located in the Partner Jurisdiction.

n) The term “Reporting Financial Institution” means a Reporting Canadian 

Financial Institution or a Reporting U.S. Financial Institution, as the context 

requires.

o) The term “Reporting Canadian Financial Institution” means any Canadian 

Financial Institution that is not a Non-Reporting Canadian Financial Institution.

p) The term “Reporting U.S. Financial Institution” means 
4

(1) any Financial Institution that is resident in the United States, but excluding 

any branch of such Financial Institution that is located outside the United 

States, and 

(2) any branch of a Financial Institution that is not resident in the United 

States, if such branch is located in the United States, 

provided that the Financial Institution or branch has control, receipt, or custody of 

income with respect to which information is required to be exchanged under 

subparagraph (2)(b) of Article 2 of this Agreement.

q) The term “Non-Reporting Canadian Financial Institution” means any 

Canadian Financial Institution, or other Entity resident in Canada, that is 

identified in Annex II as a Non-Reporting Canadian Financial Institution or that 

otherwise qualifies as a deemed compliant FFI or an exempt beneficial owner 

under relevant U.S. Treasury Regulations in effect on the date of signature of this 

Agreement.

r) The term “Nonparticipating Financial Institution” means a nonparticipating 

FFI, as that term is defined in relevant U.S. Treasury Regulations, but does not 

include a Canadian Financial Institution or other Partner Jurisdiction Financial 

Institution other than a Financial Institution treated as a Nonparticipating 

Financial Institution pursuant to subparagraph 2(b) of Article 5 of this Agreement 

or the corresponding provision in an agreement between the United States and a 

Partner Jurisdiction.

s) The term “Financial Account” means an account maintained by a Financial 

Institution, and includes:

(1) in the case of an Entity that is a Financial Institution solely because it is an 

Investment Entity, any equity or debt interest (other than interests that are 

regularly traded on an established securities market) in the Financial 

Institution;

(2) in the case of a Financial Institution not described in subparagraph 1(s)(1) 

of this Article, any equity or debt interest in the Financial Institution (other 

than interests that are regularly traded on an established securities market), 

if 

(A) the value of the debt or equity interest is determined, directly or 

indirectly, primarily by reference to assets that give rise to U.S. 

Source Withholdable Payments, and 

(B) the class of interests was established with a purpose of avoiding 

reporting in accordance with this Agreement; and

(3) any Cash Value Insurance Contract and any Annuity Contract issued or 

maintained by a Financial Institution, other than a noninvestment-linked, 
5

nontransferable immediate life annuity that is issued to an individual and 

monetizes a pension or disability benefit provided under an account, 

product, or arrangement identified as excluded from the definition of 

Financial Account in Annex II.

Notwithstanding the foregoing, the term “Financial Account” does not include 

any account, product, or arrangement identified as excluded from the definition of 

Financial Account in Annex II. For purposes of this Agreement, interests are 

“regularly traded” if there is a meaningful volume of trading with respect to the 

interests on an ongoing basis, and an “established securities market” means an 

exchange that is officially recognized and supervised by a governmental authority 

in which the market is located and that has a meaningful annual value of shares 

traded on the exchange. For purposes of this subparagraph 1(s), an interest in a 

Financial Institution is not “regularly traded” and shall be treated as a Financial 

Account if the holder of the interest (other than a Financial Institution acting as an 

intermediary) is registered on the books of such Financial Institution. The 

preceding sentence will not apply to interests first registered on the books of such 

Financial Institution prior to July 1, 2014, and with respect to interests first 

registered on the books of such Financial Institution on or after July 1, 2014, a 

Financial Institution is not required to apply the preceding sentence prior to 

January 1, 2016.

t) The term “Depository Account” includes any commercial, checking, savings, 

time, or thrift account, or an account that is evidenced by a certificate of deposit, 

thrift certificate, investment certificate, certificate of indebtedness, or other 

similar instrument maintained by a Financial Institution in the ordinary course of 

a banking or similar business. A Depository Account also includes an amount 

held by an insurance company pursuant to a guaranteed investment contract or 

similar agreement to pay or credit interest thereon.

u) The term “Custodial Account” means an account (other than an Insurance 

Contract or Annuity Contract) for the benefit of another person that holds any 

financial instrument or contract held for investment (including, but not limited to, 

a share or stock in a corporation, a note, bond, debenture, or other evidence of 

indebtedness, a currency or commodity transaction, a credit default swap, a swap 

based upon a nonfinancial index, a notional principal contract, an Insurance 

Contract or Annuity Contract, and any option or other derivative instrument).

v) The term “Equity Interest” means, in the case of a partnership that is a Financial 

Institution, either a capital or profits interest in the partnership. In the case of a 

trust that is a Financial Institution, an Equity Interest is considered to be held by 

any person treated as a settlor or beneficiary of all or a portion of the trust, or any 

other natural person exercising ultimate effective control over the trust. A 

Specified U.S. Person shall be treated as being a beneficiary of a foreign trust if 

such Specified U.S. Person has the right to receive directly or indirectly (for 

example, through a nominee) a mandatory distribution or may receive, directly or 

indirectly, a discretionary distribution from the trust. 
6

w) The term “Insurance Contract” means a contract (other than an Annuity 

Contract) under which the issuer agrees to pay an amount upon the occurrence of 

a specified contingency involving mortality, morbidity, accident, liability, or 

property risk.

x) The term “Annuity Contract” means a contract under which the issuer agrees to 

make payments for a period of time determined in whole or in part by reference to 

the life expectancy of one or more individuals. The term also includes a contract 

that is considered to be an Annuity Contract in accordance with the law, 

regulation, or practice of the jurisdiction in which the contract was issued, and 

under which the issuer agrees to make payments for a term of years. 

y) The term “Cash Value Insurance Contract” means an Insurance Contract (other 

than an indemnity reinsurance contract between two insurance companies) that 

has a Cash Value greater than $50,000.

z) The term “Cash Value” means the greater of (i) the amount that the policyholder 

is entitled to receive upon surrender or termination of the contract (determined 

without reduction for any surrender charge or policy loan), and (ii) the amount the 

policyholder can borrow under or with regard to the contract. Notwithstanding 

the foregoing, the term “Cash Value” does not include an amount payable under 

an Insurance Contract as: 

(1) a personal injury or sickness benefit or other benefit providing 

indemnification of an economic loss incurred upon the occurrence of the 

event insured against; 

(2) a refund to the policyholder of a previously paid premium under an 

Insurance Contract (other than under a life insurance contract) due to 

policy cancellation or termination, decrease in risk exposure during the 

effective period of the Insurance Contract, or arising from a 

redetermination of the premium due to correction of posting or other 

similar error; or 

(3) a policyholder dividend based upon the underwriting experience of the 

contract or group involved.

aa) The term “Reportable Account” means a U.S. Reportable Account or a Canadian 

Reportable Account, as the context requires.

bb) The term “Canadian Reportable Account” means a Financial Account 

maintained by a Reporting U.S. Financial Institution if: 

(1) in the case of a Depository Account, the account is held by an individual 

resident in Canada and more than $10 of interest is paid to such account in 

any given calendar year; or
7

(2) in the case of a Financial Account other than a Depository Account, the 

Account Holder is a resident of Canada, including an Entity that certifies 

that it is resident in Canada for tax purposes, with respect to which U.S. 

source income that is subject to reporting under chapter 3 of subtitle A or 

chapter 61 of subtitle F of the U.S. Internal Revenue Code is paid or 

credited.

cc) The term “U.S. Reportable Account” means a Financial Account maintained by 

a Reporting Canadian Financial Institution and held by one or more Specified 

U.S. Persons or by a Non-U.S. Entity with one or more Controlling Persons that is 

a Specified U.S. Person. Notwithstanding the foregoing, an account shall not be 

treated as a U.S. Reportable Account if such account is not identified as a U.S. 

Reportable Account after application of the due diligence procedures in Annex I.

dd) The term “Account Holder” means the person listed or identified as the holder of 

a Financial Account by the Financial Institution that maintains the account. A

person, other than a Financial Institution, holding a Financial Account for the 

benefit or account of another person as agent, custodian, nominee, signatory, 

investment advisor, or intermediary, is not treated as the Account Holder for 

purposes of this Agreement, and such other person is treated as the Account 

Holder. For purposes of the immediately preceding sentence, the term “Financial

Institution” does not include a Financial Institution organized or incorporated in a 

U.S. Territory. In the case of a Cash Value Insurance Contract or an Annuity 

Contract, the Account Holder is any person entitled to access the Cash Value or 

change the beneficiary of the contract. If no person can access the Cash Value or 

change the beneficiary, the Account Holder is any person named as the owner in 

the contract and any person with a vested entitlement to payment under the terms 

of the contract. Upon the maturity of a Cash Value Insurance Contract or an 

Annuity Contract, each person entitled to receive a payment under the contract is 

treated as an Account Holder.

ee) The term “U.S. Person” means 

(1) a U.S. citizen or resident individual, 

(2) a partnership or corporation organized in the United States or under the 

laws of the United States or any State thereof, 

(3) a trust if 

(A) a court within the United States would have authority under 

applicable law to render orders or judgments concerning 

substantially all issues regarding administration of the trust, and

(B) one or more U.S. persons have the authority to control all 

substantial decisions of the trust, or

(4) an estate of a decedent that is a citizen or resident of the United States. 
8

This subparagraph 1(ee) shall be interpreted in accordance with the U.S. Internal 

Revenue Code.

ff) The term “Specified U.S. Person” means a U.S. Person, other than: 

(1) a corporation the stock of which is regularly traded on one or more 

established securities markets; 

(2) any corporation that is a member of the same expanded affiliated group, as 

defined in section 1471(e)(2) of the U.S. Internal Revenue Code, as a 

corporation described in clause (1); 

(3) the United States or any wholly owned agency or instrumentality thereof; 

(4) any State of the United States, any U.S. Territory, any political subdivision 

of any of the foregoing, or any wholly owned agency or instrumentality of 

any one or more of the foregoing; 

(5) any organization exempt from taxation under section 501(a) of the U.S. 

Internal Revenue Code or an individual retirement plan as defined in 

section 7701(a)(37) of the U.S. Internal Revenue Code; 

(6) any bank as defined in section 581 of the U.S. Internal Revenue Code; 

(7) any real estate investment trust as defined in section 856 of the U.S. 

Internal Revenue Code; 

(8) any regulated investment company as defined in section 851 of the U.S. 

Internal Revenue Code or any entity registered with the U.S. Securities 

and Exchange Commission under the U.S. Investment Company Act of 

1940; 

(9) any common trust fund as defined in section 584(a) of the U.S. Internal 

Revenue Code; 

(10) any trust that is exempt from tax under section 664(c) of the U.S. Internal 

Revenue Code or that is described in section 4947(a)(1) of the U.S. 

Internal Revenue Code; 

(11) a dealer in securities, commodities, or derivative financial instruments 

(including notional principal contracts, futures, forwards, and options) that 

is registered as such under the laws of the United States or any State 

thereof;

(12) a broker as defined in section 6045(c) of the U.S. Internal Revenue Code; 

or
9

(13) any tax-exempt trust under a plan that is described in section 403(b) or 

section 457(b) of the U.S. Internal Revenue Code. 

gg) The term “Entity” means a legal person or a legal arrangement such as a trust. 

hh) The term “Non-U.S. Entity” means an Entity that is not a U.S. Person.

ii) The term “U.S. Source Withholdable Payment” means any payment of interest 

(including any original issue discount), dividends, rents, salaries, wages, 

premiums, annuities, compensations, remunerations, emoluments, and other fixed 

or determinable annual or periodical gains, profits, and income, if such payment is 

from sources within the United States. Notwithstanding the foregoing, a U.S. 

Source Withholdable Payment does not include any payment that is not treated as 

a withholdable payment in relevant U.S. Treasury Regulations.

jj) An Entity is a “Related Entity” of another Entity if either Entity controls the 

other Entity, or the two Entities are under common control. For this purpose 

control includes direct or indirect ownership of more than 50 percent of the vote 

or value in an Entity. Notwithstanding the foregoing, Canada may treat an Entity 

as not a Related Entity of another Entity if the two Entities are not members of the 

same expanded affiliated group as defined in section 1471(e)(2) of the U.S. 

Internal Revenue Code.

kk) The term “U.S. TIN” means a U.S. federal taxpayer identifying number.

ll) The term “Canadian TIN” means a Canadian taxpayer identifying number. 

mm) The term “Controlling Persons” means the natural persons who exercise control 

over an Entity. In the case of a trust, such term means the settlor, 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 “Controlling Persons” shall be interpreted in a 

manner consistent with the Financial Action Task Force Recommendations.

2. Any term not otherwise defined in this Agreement shall, unless the context otherwise 

requires or the Competent Authorities agree to a common meaning (as permitted by 

domestic law), have the meaning that it has at that time under the law of the Party 

applying this Agreement, any meaning under the applicable tax laws of that Party 

prevailing over a meaning given to the term under other laws of that Party.

Article 2

Obligations to Obtain and Exchange Information with Respect to Reportable Accounts

1. Subject to the provisions of Article 3 of this Agreement, each Party shall obtain the 

information specified in paragraph 2 of this Article with respect to all Reportable 
10

Accounts and shall annually exchange this information with the other Party on an 

automatic basis pursuant to the provisions of Article XXVII of the Convention.

2. The information to be obtained and exchanged is:

a) In the case of Canada with respect to each U.S. Reportable Account of each 

Reporting Canadian Financial Institution:

(1) the name, address, and U.S. TIN of each Specified U.S. Person that is an 

Account Holder of such account and, in the case of a Non-U.S. Entity that, 

after application of the due diligence procedures set forth in Annex I, is 

identified as having one or more Controlling Persons that is a Specified 

U.S. Person, the name, address, and U.S. TIN (if any) of such Entity and 

each such Specified U.S. Person;

(2) the account number (or functional equivalent in the absence of an account 

number); 

(3) the name and identifying number of the Reporting Canadian Financial 

Institution;

(4) the account balance or value (including, in the case of a Cash Value 

Insurance Contract or Annuity Contract, the Cash Value or surrender 

value) as of the end of the relevant calendar year or other appropriate 

reporting period or, if the account was closed during such year, 

immediately before closure; 

(5) in the case of any Custodial Account: 

(A) the total gross amount of interest, the total gross amount of 

dividends, and the total gross amount of other income generated 

with respect to the assets held in the account, in each case paid or 

credited to the account (or with respect to the account) during the 

calendar year or other appropriate reporting period; and 

(B) the total gross proceeds from the sale or redemption of property 

paid or credited to the account during the calendar year or other 

appropriate reporting period with respect to which the Reporting 

Canadian Financial Institution acted as a custodian, broker, 

nominee, or otherwise as an agent for the Account Holder; 

(6) in the case of any Depository Account, the total gross amount of interest 

paid or credited to the account during the calendar year or other 

appropriate reporting period; and

(7) in the case of any account not described in subparagraph 2(a)(5) or 2(a)(6) 

of this Article, the total gross amount paid or credited to the Account 

Holder with respect to the account during the calendar year or other 
11

appropriate reporting period with respect to which the Reporting Canadian 

Financial Institution is the obligor or debtor, including the aggregate 

amount of any redemption payments made to the Account Holder during 

the calendar year or other appropriate reporting period.

b) In the case of the United States, with respect to each Canadian Reportable 

Account of each Reporting U.S. Financial Institution:

(1) the name, address, and Canadian TIN of any person that is a resident of 

Canada and is an Account Holder of the account; 

(2) the account number (or the functional equivalent in the absence of an 

account number); 

(3) the name and identifying number of the Reporting U.S. Financial 

Institution;

(4) the gross amount of interest paid on a Depository Account;

(5) the gross amount of U.S. source dividends paid or credited to the account; 

and 

(6) the gross amount of other U.S. source income paid or credited to the 

account, to the extent subject to reporting under chapter 3 of subtitle A or 

chapter 61 of subtitle F of the U.S. Internal Revenue Code.

Article 3

Time and Manner of Exchange of Information

1. For purposes of the exchange obligation in Article 2 of this Agreement, the amount and 

characterization of payments made with respect to a U.S. Reportable Account may be 

determined in accordance with the principles of Canada’s tax laws, and the amount and 

characterization of payments made with respect to a Canadian Reportable Account may 

be determined in accordance with principles of U.S. federal income tax law. 

2. For purposes of the exchange obligation in Article 2 of this Agreement, the information 

exchanged shall identify the currency in which each relevant amount is denominated.

3. With respect to paragraph 2 of Article 2 of this Agreement, information is to be obtained 

and exchanged with respect to 2014 and all subsequent years, except that:

a) In the case of Canada:

(1) the information to be obtained and exchanged with respect to 2014 is only 

the information described in subparagraphs 2(a)(1) through 2(a)(4) of 

Article 2 of this Agreement; 
12

(2) the information to be obtained and exchanged with respect to 2015 is the 

information described in subparagraphs 2(a)(1) through 2(a)(7) of Article 

2 of this Agreement, except for gross proceeds described in subparagraph 

2(a)(5)(B) of Article 2 of this Agreement; and

(3) the information to be obtained and exchanged with respect to 2016 and 

subsequent years is the information described in subparagraphs 2(a)(1) 

through 2(a)(7) of Article 2 of this Agreement;

b) In the case of the United States, the information to be obtained and exchanged 

with respect to 2014 and subsequent years is all of the information identified in 

subparagraph 2(b) of Article 2 of this Agreement. 

4. Notwithstanding paragraph 3 of this Article, with respect to each Reportable Account that 

is maintained by a Reporting Financial Institution as of June 30, 2014, and subject to 

paragraph 4 of Article 6 of this Agreement, the Parties are not required to obtain and 

include in the exchanged information the Canadian TIN or the U.S. TIN, as applicable, of 

any relevant person if such taxpayer identifying number is not in the records of the 

Reporting Financial Institution. In such a case, the Parties shall obtain and include in the 

exchanged information the date of birth of the relevant person, if the Reporting Financial 

Institution has such date of birth in its records.

5. Subject to paragraphs 3 and 4 of this Article, the information described in Article 2 of this 

Agreement shall be exchanged within nine months after the end of the calendar year to 

which the information relates. 

6. The Competent Authorities of Canada and the United States shall enter into an agreement 

or arrangement under the mutual agreement procedure provided for in Article XXVI of 

the Convention, which shall:

a) establish the procedures for the automatic exchange obligations described in 

Article 2 of this Agreement;

b) prescribe rules and procedures as may be necessary to implement Article 5 of this 

Agreement; and

c) establish as necessary procedures for the exchange of the information reported 

under subparagraph 1(b) of Article 4 of this Agreement.

7. All information exchanged shall be subject to the confidentiality and other protections 

provided for in the Convention, including the provisions limiting the use of the 

information exchanged.
13

Article 4

Application of FATCA to Canadian Financial Institutions

1. Treatment of Reporting Canadian Financial Institutions. Each Reporting Canadian 

Financial Institution shall be treated as complying with, and not subject to withholding 

under, section 1471 of the U.S. Internal Revenue Code if Canada complies with its 

obligations under Articles 2 and 3 of this Agreement with respect to such Reporting 

Canadian Financial Institution, and the Reporting Canadian Financial Institution:

a) identifies U.S. Reportable Accounts and reports annually to the Canadian 

Competent Authority the information required to be reported in subparagraph 2(a) 

of Article 2 of this Agreement in the time and manner described in Article 3 of 

this Agreement;

b) for each of 2015 and 2016, reports annually to the Canadian Competent Authority

the name of each Nonparticipating Financial Institution to which it has made 

payments and the aggregate amount of such payments;

c) complies with the applicable registration requirements on the IRS FATCA 

registration website;

d) to the extent that a Reporting Canadian Financial Institution is 

(1) acting as a qualified intermediary (for purposes of section 1441 of the U.S. 

Internal Revenue Code) that has elected to assume primary withholding 

responsibility under chapter 3 of subtitle A of the U.S. Internal Revenue 

Code, 

(2) a foreign partnership that has elected to act as a withholding foreign 

partnership (for purposes of both sections 1441 and 1471 of the U.S. 

Internal Revenue Code), or 

(3) a foreign trust that has elected to act as a withholding foreign trust (for 

purposes of both sections 1441 and 1471 of the U.S. Internal Revenue 

Code), 

withholds 30 percent of any U.S. Source Withholdable Payment to any 

Nonparticipating Financial Institution; and 

e) in the case of a Reporting Canadian Financial Institution that is not described in 

subparagraph 1(d) of this Article and that makes a payment of, or acts as an 

intermediary with respect to, a U.S. Source Withholdable Payment to any 

Nonparticipating Financial Institution, the Reporting Canadian Financial 

Institution provides to any immediate payor of such U.S. Source Withholdable 

Payment the information required for withholding and reporting to occur with 

respect to such payment.
14

Notwithstanding the foregoing, a Reporting Canadian Financial Institution with respect to 

which the conditions of this paragraph 1 are not satisfied shall not be subject to 

withholding under section 1471 of the U.S. Internal Revenue Code unless such Reporting 

Canadian Financial Institution is treated by the IRS as a Nonparticipating Financial 

Institution pursuant to subparagraph 2(b) of Article 5 of this Agreement.

2. Suspension of Rules Relating to Recalcitrant Accounts. The United States shall not 

require a Reporting Canadian Financial Institution to withhold tax under section 1471 or 

1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant 

account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue Code), or 

to close such account, if the U.S. Competent Authority receives the information set forth 

in subparagraph 2(a) of Article 2 of this Agreement, subject to the provisions of Article 3 

of this Agreement, with respect to such account.

3. Specific Treatment of Canadian Retirement Plans. The United States shall treat as 

deemed-compliant FFIs or exempt beneficial owners, as appropriate, for purposes of 

sections 1471 and 1472 of the U.S. Internal Revenue Code, Canadian retirement plans 

identified in Annex II. For this purpose, a Canadian retirement plan includes an Entity 

established or located in, and regulated by, Canada, or a predetermined contractual or 

legal arrangement, operated to provide pension or retirement benefits or earn income for 

providing such benefits under the laws of Canada and regulated with respect to 

contributions, distributions, reporting, sponsorship, and taxation. 

4. Identification and Treatment of Other Deemed-Compliant FFIs and Exempt 

Beneficial Owners. The United States shall treat each Non-Reporting Canadian 

Financial Institution as a deemed-compliant FFI or as an exempt beneficial owner, as 

appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code. 

5. Special Rules Regarding Related Entities and Branches That Are Nonparticipating 

Financial Institutions. If a Canadian Financial Institution, that otherwise meets the 

requirements described in paragraph 1 of this Article or is described in paragraph 3 or 4 

of this Article, has a Related Entity or branch that operates in a jurisdiction that prevents 

such Related Entity or branch from fulfilling the requirements of a participating FFI or 

deemed-compliant FFI for purposes of section 1471 of the U.S. Internal Revenue Code or 

has a Related Entity or branch that is treated as a Nonparticipating Financial Institution 

solely due to the expiration of the transitional rule for limited FFIs and limited branches 

under relevant U.S. Treasury Regulations, such Canadian Financial Institution shall

continue to be in compliance with the terms of this Agreement and shall continue to be 

treated as a deemed-compliant FFI or exempt beneficial owner, as appropriate, for 

purposes of section 1471 of the U.S. Internal Revenue Code, provided that:

a) the Canadian Financial Institution treats each such Related Entity or branch as a 

separate Nonparticipating Financial Institution for purposes of all the reporting 

and withholding requirements of this Agreement and each such Related Entity or 

branch identifies itself to withholding agents as a Nonparticipating Financial 

Institution;
15

b) each such Related Entity or branch identifies its U.S. accounts and reports the 

information with respect to those accounts as required under section 1471 of the 

U.S. Internal Revenue Code to the extent permitted under the relevant laws 

pertaining to the Related Entity or branch; and

c) such Related Entity or branch does not specifically solicit U.S. accounts held by 

persons that are not resident in the jurisdiction where such Related Entity or 

branch is located or accounts held by Nonparticipating Financial Institutions that 

are not established in the jurisdiction where such branch or Related Entity is 

located, and such branch or Related Entity is not used by the Canadian Financial 

Institution or any other Related Entity to circumvent the obligations under this 

Agreement or under section 1471 of the U.S. Internal Revenue Code, as 

appropriate.

6. Coordination of Timing. Notwithstanding paragraphs 3 and 5 of Article 3 of this 

Agreement:

a) Canada shall not be obligated to obtain and exchange information with respect to 

a calendar year that is prior to the calendar year with respect to which similar 

information is required to be reported to the IRS by participating FFIs pursuant to 

relevant U.S. Treasury Regulations;

b) Canada shall not be obligated to begin exchanging information prior to the date 

by which participating FFIs are required to report similar information to the IRS 

under relevant U.S. Treasury Regulations; 

c) the United States shall not be obligated to obtain and exchange information with 

respect to a calendar year that is prior to the first calendar year with respect to 

which Canada is required to obtain and exchange information; and 

d) the United States shall not be obligated to begin exchanging information prior to 

the date by which Canada is required to begin exchanging information. 

7. Coordination of Definitions with U.S. Treasury Regulations. Notwithstanding Article 

1 of this Agreement and the definitions provided in the Annexes to this Agreement, in 

implementing this Agreement, Canada may use, and may permit Canadian Financial 

Institutions to use, a definition in relevant U.S. Treasury Regulations in lieu of a 

corresponding definition in this Agreement, provided that such application would not 

frustrate the purposes of this Agreement. 

Article 5

Collaboration on Compliance and Enforcement

1. Minor and Administrative Errors. A Competent Authority shall notify the Competent 

Authority of the other Party when the first-mentioned Competent Authority has reason to 

believe that administrative errors or other minor errors may have led to incorrect or 

incomplete information reporting or resulted in other infringements of this Agreement. 
16

The Competent Authority of such other Party shall endeavor, including where appropriate 

by applying its domestic law (including applicable penalties), to obtain corrected and/or 

complete information or to resolve other infringements of this Agreement.

2. Significant Non-Compliance.

a) A Competent Authority shall notify the Competent Authority of the other Party 

when the first-mentioned Competent Authority has determined that there is 

significant non-compliance with the obligations under this Agreement with 

respect to a Reporting Financial Institution in the other jurisdiction. The 

Competent Authority of such other Party shall apply its domestic law (including 

applicable penalties) to address the significant non-compliance described in the 

notice. 

b) If, in the case of a Reporting Canadian Financial Institution, such enforcement 

actions do not resolve the non-compliance within a period of 18 months after 

notification of significant non-compliance is first provided, the United States shall 

treat the Reporting Canadian Financial Institution as a Nonparticipating Financial 

Institution pursuant to this subparagraph 2(b).

3. Reliance on Third Party Service Providers. Each Party may allow Reporting Financial 

Institutions to use third party service providers to fulfill the obligations imposed on such 

Reporting Financial Institutions by a Party, as contemplated in this Agreement, but these 

obligations shall remain the responsibility of the Reporting Financial Institutions.

4. Prevention of Avoidance. The Parties shall implement as necessary requirements to 

prevent Financial Institutions from adopting practices intended to circumvent the 

reporting required under this Agreement.

Article 6

Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange 

and Transparency

1. Reciprocity. The Government of the United States acknowledges the need to achieve 

equivalent levels of reciprocal automatic information exchange with Canada. The 

Government of the United States is committed to further improve transparency and 

enhance the exchange relationship with Canada by pursuing the adoption of regulations 

and advocating and supporting relevant legislation to achieve such equivalent levels of 

reciprocal automatic information exchange.

2. Treatment of Passthru Payments and Gross Proceeds. The Parties are committed to 

work together, along with Partner Jurisdictions, to develop a practical and effective 

alternative approach to achieve the policy objectives of foreign passthru payment and 

gross proceeds withholding that minimizes burden. 
17

3. Development of Common Reporting and Exchange Model. The Parties are committed 

to working with Partner Jurisdictions and the Organisation for Economic Co-operation 

and Development on adapting the terms of this Agreement and other agreements between 

the United States and Partner Jurisdictions to a common model for automatic exchange of 

information, including the development of reporting and due diligence standards for 

financial institutions.

4. Documentation of Accounts Maintained as of June 30, 2014. With respect to 

Reportable Accounts maintained by a Reporting Financial Institution as of June 30, 2014:

a) The United States commits to establish, by January 1, 2017, for reporting with 

respect to 2017 and subsequent years, rules requiring Reporting U.S. Financial 

Institutions to obtain and report the Canadian TIN of each Account Holder of a 

Canadian Reportable Account as required pursuant to subparagraph 2(b)(1) of 

Article 2 of this Agreement; and

b) Canada commits to establish, by January 1, 2017, for reporting with respect to 

2017 and subsequent years, rules requiring Reporting Canadian Financial 

Institutions to obtain the U.S. TIN of each Specified U.S. Person as required 

pursuant to subparagraph 2(a)(1) of Article 2 of this Agreement.

Article 7

Consistency in the Application of FATCA to Partner Jurisdictions 

1. Canada shall be granted the benefit of any more favorable terms under Article 4 or Annex 

I of this Agreement relating to the application of FATCA to Canadian Financial 

Institutions afforded to another Partner Jurisdiction under a signed bilateral agreement 

pursuant to which the other Partner Jurisdiction commits to undertake the same 

obligations as Canada described in Articles 2 and 3 of this Agreement, and subject to the 

same terms and conditions as described therein and in Articles 5 through 9 of this 

Agreement. 

2. The United States shall notify Canada of any such more favorable terms, and such more 

favorable terms shall apply automatically under this Agreement as if such terms were 

specified in this Agreement and effective as of the date of signing of the agreement 

incorporating the more favorable terms, unless Canada declines the application thereof.

Article 8

Consultations and Amendments

1. In case any difficulties in the implementation of this Agreement arise, either Party may 

request consultations to develop appropriate measures to ensure the fulfillment of this 

Agreement.
18

2. This Agreement may be amended by written mutual agreement of the Parties. Unless 

otherwise agreed upon, such an amendment shall enter into force through the same 

procedures as set forth in paragraph 1 of Article 10 of this Agreement.

Article 9

Annexes

The Annexes form an integral part of this Agreement.

Article 10

Term of Agreement

1. This Agreement shall enter into force on the date of Canada’s written notification to the 

United States that Canada has completed its necessary internal procedures for entry into 

force of this Agreement. 

2. Either Party may terminate this Agreement by giving notice of termination in writing to 

the other Party. Such termination shall become effective on the first day of the month 

following the expiration of a period of 12 months after the date of the notice of 

termination.

3. The Parties shall, prior to December 31, 2016, consult in good faith to amend this 

Agreement as necessary to reflect progress on the commitments set forth in Article 6 of 

this Agreement.

In witness whereof, the undersigned, being duly authorized thereto by their respective 

Governments, have signed this Agreement. 

Done in duplicate, at _________, this __ day of ________ 2014, in the English and French 

languages, each version being equally authentic.

FOR THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA:

FOR THE GOVERNMENT OF 

CANADA:
19

ANNEX I

DUE DILIGENCE OBLIGATIONS FOR IDENTIFYING AND REPORTING ON U.S. 

REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN 

NONPARTICIPATING FINANCIAL INSTITUTIONS

I. General.

A. Canada shall require that Reporting Canadian Financial Institutions apply the due 

diligence procedures contained in this Annex I to identify U.S. Reportable 

Accounts and accounts held by Nonparticipating Financial Institutions. 

B. For purposes of the Agreement,

1. All dollar amounts are in U.S. dollars and shall be read to include the 

equivalent in other currencies.

2. Except as otherwise provided herein, the balance or value of an account 

shall be determined as of the last day of the calendar year or other 

appropriate reporting period.

3. Where a balance or value threshold is to be determined as of June 30, 

2014, under this Annex I, the relevant balance or value shall be 

determined as of that day or the last day of the reporting period ending 

immediately before June 30, 2014, and where a balance or value threshold 

is to be determined as of the last day of a calendar year under this Annex I, 

the relevant balance or value shall be determined as of the last day of the 

calendar year or other appropriate reporting period. 

4. Subject to subparagraph E(1) of section II of this Annex I, an account shall 

be treated as a U.S. Reportable Account beginning as of the date it is 

identified as such pursuant to the due diligence procedures in this Annex I.

5. Unless otherwise provided, information with respect to a U.S. Reportable 

Account shall be reported annually in the calendar year following the year 

to which the information relates.

C. As an alternative to the procedures described in each section of this Annex I, 

Canada may permit Reporting Canadian Financial Institutions to rely on the 

procedures described in relevant U.S. Treasury Regulations to establish whether 

an account is a U.S. Reportable Account or an account held by a Nonparticipating 

Financial Institution. Canada may permit Reporting Canadian Financial 

Institutions to make such election separately for each section of this Annex I 

either with respect to all relevant Financial Accounts or, separately, with respect 

to any clearly identified group of such accounts (such as by line of business or the 

location of where the account is maintained). 
20

II. Preexisting Individual Accounts. The following rules and procedures apply for 

purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by 

individuals (“Preexisting Individual Accounts”).

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the 

Reporting Canadian Financial Institution elects otherwise, either with respect to 

all Preexisting Individual Accounts or, separately, with respect to any clearly 

identified group of such accounts, where the implementing rules in Canada 

provide for such an election, the following Preexisting Individual Accounts are 

not required to be reviewed, identified, or reported as U.S. Reportable Accounts:

1. Subject to subparagraph E(2) of this section, a Preexisting Individual 

Account with a balance or value that does not exceed $50,000 as of June 

30, 2014.

2. Subject to subparagraph E(2) of this section, a Preexisting Individual 

Account that is a Cash Value Insurance Contract or an Annuity Contract 

with a balance or value of $250,000 or less as of June 30, 2014.

3. A Preexisting Individual Account that is a Cash Value Insurance Contract 

or an Annuity Contract, provided the law or regulations of Canada or the 

United States effectively prevent the sale of such a Cash Value Insurance 

Contract or an Annuity Contract to U.S. residents (e.g., if the relevant 

Financial Institution does not have the required registration under U.S. 

law, and the law of Canada requires reporting or withholding with respect 

to insurance products held by residents of Canada).

4. A Depository Account with a balance of $50,000 or less.

B. Review Procedures for Preexisting Individual Accounts With a Balance or 

Value as of June 30, 2014, that Exceeds $50,000 ($250,000 for a Cash Value 

Insurance Contract or Annuity Contract), But Does Not Exceed $1,000,000 

(“Lower Value Accounts”).

1. Electronic Record Search. The Reporting Canadian Financial Institution 

must review electronically searchable data maintained by the Reporting 

Canadian Financial Institution for any of the following U.S. indicia:

a) Identification of the Account Holder as a U.S. citizen or resident;

b) Unambiguous indication of a U.S. place of birth;

c) Current U.S. mailing or residence address (including a U.S. post 

office box);

d) Current U.S. telephone number;
21

e) Standing instructions to transfer funds to an account maintained in 

the United States;

f) Currently effective power of attorney or signatory authority 

granted to a person with a U.S. address; or

g) An “in-care-of” or “hold mail” address that is the sole address the 

Reporting Canadian Financial Institution has on file for the 

Account Holder. In the case of a Preexisting Individual Account 

that is a Lower Value Account, an “in-care-of” address outside the 

United States or “hold mail” address shall not be treated as U.S. 

indicia. 

2. If none of the U.S. indicia listed in subparagraph B(1) of this section are 

discovered in the electronic search, then no further action is required until 

there is a change in circumstances that results in one or more U.S. indicia 

being associated with the account, or the account becomes a High Value 

Account described in paragraph D of this section.

3. If any of the U.S. indicia listed in subparagraph B(1) of this section are 

discovered in the electronic search, or if there is a change in circumstances 

that results in one or more U.S. indicia being associated with the account, 

then the Reporting Canadian Financial Institution must treat the account as 

a U.S. Reportable Account unless it elects to apply subparagraph B(4) of 

this section and one of the exceptions in such subparagraph applies with 

respect to that account.

4. Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this 

section, a Reporting Canadian Financial Institution is not required to treat 

an account as a U.S. Reportable Account if:

a) Where the Account Holder information unambiguously indicates a 

U.S. place of birth, the Reporting Canadian Financial Institution 

obtains, or has previously reviewed and maintains a record of:

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which 

may be on an IRS Form W-8 or other similar agreed form);

(2) A non-U.S. passport or other government-issued 

identification evidencing the Account Holder’s citizenship 

or nationality in a country other than the United States; and

(3) A copy of the Account Holder’s Certificate of Loss of 

Nationality of the United States or a reasonable explanation 

of: 
22

(a) The reason the Account Holder does not have such a 

certificate despite relinquishing U.S. citizenship; or

(b) The reason the Account Holder did not obtain U.S. 

citizenship at birth.

b) Where the Account Holder information contains a current U.S. 

mailing or residence address, or one or more U.S. telephone 

numbers that are the only telephone numbers associated with the 

account, the Reporting Canadian Financial Institution obtains, or 

has previously reviewed and maintains a record of:

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which 

may be on an IRS Form W-8 or other similar agreed form); 

and

(2) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account 

Holder’s non-U.S. status.

c) Where the Account Holder information contains standing 

instructions to transfer funds to an account maintained in the 

United States, the Reporting Canadian Financial Institution 

obtains, or has previously reviewed and maintains a record of:

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which 

may be on an IRS Form W-8 or other similar agreed form); 

and

(2) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account 

Holder’s non-U.S. status.

d) Where the Account Holder information contains a currently 

effective power of attorney or signatory authority granted to a 

person with a U.S. address, has an “in-care-of” address or “hold 

mail” address that is the sole address identified for the Account 

Holder, or has one or more U.S. telephone numbers (if a nonU.S. telephone number is also associated with the account), the 

Reporting Canadian Financial Institution obtains, or has previously 

reviewed and maintains a record of:

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which 
23

may be on an IRS Form W-8 or other similar agreed form); 

or

(2) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account 

Holder’s non-U.S. status.

C. Additional Procedures Applicable to Preexisting Individual Accounts That 

Are Lower Value Accounts.

1. Review of Preexisting Individual Accounts that are Lower Value 

Accounts for U.S. indicia must be completed by June 30, 2016. 

2. If there is a change of circumstances with respect to a Preexisting 

Individual Account that is a Lower Value Account that results in one or 

more U.S. indicia described in subparagraph B(1) of this section being 

associated with the account, then the Reporting Canadian Financial 

Institution must treat the account as a U.S. Reportable Account unless 

subparagraph B(4) of this section applies.

3. Except for Depository Accounts described in subparagraph A(4) of this 

section, any Preexisting Individual Account that has been identified as a 

U.S. Reportable Account under this section shall be treated as a U.S. 

Reportable Account in all subsequent years, unless the Account Holder 

ceases to be a Specified U.S. Person.

D. Enhanced Review Procedures for Preexisting Individual Accounts With a 

Balance or Value That Exceeds $1,000,000 as of June 30, 2014, or December 

31 of 2015 or Any Subsequent Year (“High Value Accounts”).

1. Electronic Record Search. The Reporting Canadian Financial Institution 

must review electronically searchable data maintained by the Reporting 

Canadian Financial Institution for any of the U.S. indicia described in 

subparagraph B(1) of this section.

2. Paper Record Search. If the Reporting Canadian Financial Institution’s 

electronically searchable databases include fields for, and capture all of 

the information described in, subparagraph D(3) of this section, then no 

further paper record search is required. If the electronic databases do not 

capture all of this information, then with respect to a High Value Account, 

the Reporting Canadian Financial Institution must also review the current 

customer master file and, to the extent not contained in the current 

customer master file, the following documents associated with the account 

and obtained by the Reporting Canadian Financial Institution within the 

last five years for any of the U.S. indicia described in subparagraph B(1) 

of this section:
24

a) The most recent documentary evidence collected with respect to 

the account;

b) The most recent account opening contract or documentation;

c) The most recent documentation obtained by the Reporting 

Canadian Financial Institution pursuant to AML/KYC Procedures 

or for other regulatory purposes;

d) Any power of attorney or signature authority forms currently in 

effect; and

e) Any standing instructions to transfer funds currently in effect.

3. Exception Where Databases Contain Sufficient Information. A 

Reporting Canadian Financial Institution is not required to perform the 

paper record search described in subparagraph D(2) of this section if the 

Reporting Canadian Financial Institution’s electronically searchable 

information includes the following:

a) The Account Holder’s nationality or residence status;

b) The Account Holder’s residence address and mailing address 

currently on file with the Reporting Canadian Financial Institution;

c) The Account Holder’s telephone number(s) currently on file, if 

any, with the Reporting Canadian Financial Institution; 

d) Whether there are standing instructions to transfer funds in the 

account to another account (including an account at another branch 

of the Reporting Canadian Financial Institution or another 

Financial Institution);

e) Whether there is a current “in-care-of” address or “hold mail” 

address for the Account Holder; and

f) Whether there is any power of attorney or signatory authority for 

the account. 

4. Relationship Manager Inquiry for Actual Knowledge. In addition to 

the electronic and paper record searches described above, the Reporting 

Canadian Financial Institution must treat as a U.S. Reportable Account 

any High Value Account assigned to a relationship manager (including 

any Financial Accounts aggregated with such High Value Account) if the 

relationship manager has actual knowledge that the Account Holder is a 

Specified U.S. Person.
25

5. Effect of Finding U.S. Indicia.

a) If none of the U.S. indicia listed in subparagraph B(1) of this 

section are discovered in the enhanced review of High Value 

Accounts described above, and the account is not identified as held 

by a Specified U.S. Person in subparagraph D(4) of this section, 

then no further action is required until there is a change in 

circumstances that results in one or more U.S. indicia being 

associated with the account.

b) If any of the U.S. indicia listed in subparagraph B(1) of this section 

are discovered in the enhanced review of High Value Accounts 

described above, or if there is a subsequent change in 

circumstances that results in one or more U.S. indicia being 

associated with the account, then the Reporting Canadian Financial 

Institution must treat the account as a U.S. Reportable Account 

unless it elects to apply subparagraph B(4) of this section and one 

of the exceptions in such subparagraph applies with respect to that 

account.

c) Except for Depository Accounts described in subparagraph A(4) of 

this section, any Preexisting Individual Account that has been 

identified as a U.S. Reportable Account under this section shall be 

treated as a U.S. Reportable Account in all subsequent years, 

unless the Account Holder ceases to be a Specified U.S. Person. 

E. Additional Procedures Applicable to High Value Accounts.

1. If a Preexisting Individual Account is a High Value Account as of June 30, 

2014, the Reporting Canadian Financial Institution must complete the 

enhanced review procedures described in paragraph D of this section with 

respect to such account by June 30, 2015. If based on this review such 

account is identified as a U.S. Reportable Account on or before December 

31, 2014, the Reporting Canadian Financial Institution must report the 

required information about such account with respect to 2014 in the first 

report on the account and on an annual basis thereafter. In the case of an 

account identified as a U.S. Reportable Account after December 31, 2014, 

and on or before June 30, 2015, the Reporting Canadian Financial 

Institution is not required to report information about such account with 

respect to 2014, but must report information about the account on an 

annual basis thereafter.

2. If a Preexisting Individual Account is not a High Value Account as of 

June 30, 2014, but becomes a High Value Account as of the last day of 

2015 or any subsequent calendar year, the Reporting Canadian Financial 

Institution must complete the enhanced review procedures described in 

paragraph D of this section with respect to such account within six months 
26

after the last day of the calendar year in which the account becomes a 

High Value Account. If based on this review such account is identified as 

a U.S. Reportable Account, the Reporting Canadian Financial Institution 

must report the required information about such account with respect to 

the year in which it is identified as a U.S. Reportable Account and

subsequent years on an annual basis, unless the Account Holder ceases to 

be a Specified U.S. Person.

3. Once a Reporting Canadian Financial Institution applies the enhanced 

review procedures described in paragraph D of this section to a High 

Value Account, the Reporting Canadian Financial Institution is not 

required to re-apply such procedures, other than the relationship manager 

inquiry described in subparagraph D(4) of this section, to the same High 

Value Account in any subsequent year.

4. If there is a change of circumstances with respect to a High Value Account 

that results in one or more U.S. indicia described in subparagraph B(1) of 

this section being associated with the account, then the Reporting 

Canadian Financial Institution must treat the account as a U.S. Reportable 

Account unless it elects to apply subparagraph B(4) of this section and one 

of the exceptions in such subparagraph applies with respect to that 

account.

5. A Reporting Canadian Financial Institution must implement procedures to 

ensure that a relationship manager identifies any change in circumstances 

of an account. For example, if a relationship manager is notified that the 

Account Holder has a new mailing address in the United States, the 

Reporting Canadian Financial Institution is required to treat the new 

address as a change in circumstances and, if it elects to apply 

subparagraph B(4) of this section, is required to obtain the appropriate 

documentation from the Account Holder.

F. Preexisting Individual Accounts That Have Been Documented for Certain 

Other Purposes. A Reporting Canadian Financial Institution that has previously 

obtained documentation from an Account Holder to establish the Account 

Holder’s status as neither a U.S. citizen nor a U.S. resident in order to meet its 

obligations under a qualified intermediary, withholding foreign partnership, or 

withholding foreign trust agreement with the IRS, or to fulfill its obligations 

under chapter 61 of Title 26 of the United States Code, is not required to perform 

the procedures described in subparagraph B(1) of this section with respect to 

Lower Value Accounts or subparagraphs D(1) through D(3) of this section with 

respect to High Value Accounts.

III. New Individual Accounts. The following rules and procedures apply for purposes of 

identifying U.S. Reportable Accounts among Financial Accounts held by individuals and 

opened on or after July 1, 2014 (“New Individual Accounts”).
27

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the 

Reporting Canadian Financial Institution elects otherwise, either with respect to 

all New Individual Accounts or, separately, with respect to any clearly identified 

group of such accounts, where the implementing rules in Canada provide for such 

an election, the following New Individual Accounts are not required to be 

reviewed, identified, or reported as U.S. Reportable Accounts:

1. A Depository Account unless the account balance exceeds $50,000 at the 

end of any calendar year or other appropriate reporting period. 

2. A Cash Value Insurance Contract unless the Cash Value exceeds $50,000 

at the end of any calendar year or other appropriate reporting period. 

B. Other New Individual Accounts. 

1. With respect to New Individual Accounts not described in paragraph A of 

this section, upon account opening (or within 90 days after the end of the 

calendar year in which the account ceases to be described in paragraph A 

of this section), the Reporting Canadian Financial Institution must obtain a 

self-certification, which may be part of the account opening 

documentation, that allows the Reporting Canadian Financial Institution to 

determine whether the Account Holder is resident in the United States for 

tax purposes (for this purpose, a U.S. citizen is considered to be resident in 

the United States for tax purposes, even if the Account Holder is also a tax 

resident of another jurisdiction) and confirm the reasonableness of such 

self-certification based on the information obtained by the Reporting 

Canadian Financial Institution in connection with the opening of the 

account, including any documentation collected pursuant to AML/KYC 

Procedures.

2. If the self-certification establishes that the Account Holder is resident in 

the United States for tax purposes, the Reporting Canadian Financial 

Institution must treat the account as a U.S. Reportable Account and obtain 

a self-certification that includes the Account Holder’s U.S. TIN (which 

may be an IRS Form W-9 or other similar agreed form).

3. If there is a change of circumstances with respect to a New Individual 

Account that causes the Reporting Canadian Financial Institution to know, 

or have reason to know, that the original self-certification is incorrect or 

unreliable, the Reporting Canadian Financial Institution cannot rely on the 

original self-certification and must obtain a valid self-certification that 

establishes whether the Account Holder is a U.S. citizen or resident for 

U.S. tax purposes. If the Reporting Canadian Financial Institution is 

unable to obtain a valid self-certification, the Reporting Canadian 

Financial Institution must treat the account as a U.S. Reportable Account.
28

IV. Preexisting Entity Accounts. The following rules and procedures apply for purposes of 

identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial 

Institutions among Preexisting Accounts held by Entities (“Preexisting Entity 

Accounts”).

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. 

Unless the Reporting Canadian Financial Institution elects otherwise, either with 

respect to all Preexisting Entity Accounts or, separately, with respect to any 

clearly identified group of such accounts, where the implementing rules in Canada 

provide for such an election, a Preexisting Entity Account with an account 

balance or value that does not exceed $250,000 as of June 30, 2014, is not 

required to be reviewed, identified, or reported as a U.S. Reportable Account until 

the account balance or value exceeds $1,000,000.

B. Entity Accounts Subject to Review. A Preexisting Entity Account that has an 

account balance or value that exceeds $250,000 as of June 30, 2014, and a 

Preexisting Entity Account that does not exceed $250,000 as of June 30, 2014, but 

the account balance or value of which exceeds $1,000,000 as of the last day of 

2015 or any subsequent calendar year, must be reviewed in accordance with the 

procedures set forth in paragraph D of this section. 

C. Entity Accounts With Respect to Which Reporting Is Required. With respect 

to Preexisting Entity Accounts described in paragraph B of this section, only 

accounts that are held by one or more Entities that are Specified U.S. Persons, or 

by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or 

residents, shall be treated as U.S. Reportable Accounts. In addition, accounts held 

by Nonparticipating Financial Institutions shall be treated as accounts for which 

aggregate payments as described in subparagraph 1(b) of Article 4 of the 

Agreement are reported to the Canadian Competent Authority.

D. Review Procedures for Identifying Entity Accounts With Respect to Which 

Reporting Is Required. For Preexisting Entity Accounts described in paragraph 

B of this section, the Reporting Canadian Financial Institution must apply the 

following review procedures to determine whether the account is held by one or 

more Specified U.S. Persons, by Passive NFFEs with one or more Controlling 

Persons who are U.S. citizens or residents, or by Nonparticipating Financial 

Institutions:

1. Determine Whether the Entity Is a Specified U.S. Person.

a) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to 

AML/KYC Procedures) to determine whether the information 

indicates that the Account Holder is a U.S. Person. For this 

purpose, information indicating that the Account Holder is a U.S. 

Person includes a U.S. place of incorporation or organization, or a 

U.S. address.
29

b) If the information indicates that the Account Holder is a U.S. 

Person, the Reporting Canadian Financial Institution must treat the 

account as a U.S. Reportable Account unless it obtains a selfcertification from the Account Holder (which may be on an IRS 

Form W-8 or W-9, or a similar agreed form), or reasonably 

determines based on information in its possession or that is 

publicly available, that the Account Holder is not a Specified U.S. 

Person.

2. Determine Whether a Non-U.S. Entity Is a Financial Institution.

a) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to

AML/KYC Procedures) to determine whether the information 

indicates that the Account Holder is a Financial Institution.

b) If the information indicates that the Account Holder is a Financial 

Institution, or the Reporting Canadian Financial Institution verifies 

the Account Holder’s Global Intermediary Identification Number 

on the published IRS FFI list, then the account is not a U.S. 

Reportable Account. 

3. Determine Whether a Financial Institution Is a Nonparticipating 

Financial Institution Payments to Which Are Subject to Aggregate 

Reporting Under Subparagraph 1(b) of Article 4 of the Agreement.

a) Subject to subparagraph D(3)(b) of this section, a Reporting 

Canadian Financial Institution may determine that the Account 

Holder is a Canadian Financial Institution or other Partner 

Jurisdiction Financial Institution if the Reporting Canadian 

Financial Institution reasonably determines that the Account 

Holder has such status on the basis of the Account Holder’s Global 

Intermediary Identification Number on the published IRS FFI list 

or other information that is publicly available or in the possession 

of the Reporting Canadian Financial Institution, as applicable. In 

such case, no further review, identification, or reporting is required 

with respect to the account.

b) If the Account Holder is a Canadian Financial Institution or other 

Partner Jurisdiction Financial Institution treated by the IRS as a 

Nonparticipating Financial Institution, then the account is not a 

U.S. Reportable Account, but payments to the Account Holder 

must be reported as contemplated in subparagraph 1(b) of Article 4 

of the Agreement.
30

c) If the Account Holder is not a Canadian Financial Institution or 

other Partner Jurisdiction Financial Institution, then the Reporting 

Canadian Financial Institution must treat the Account Holder as a 

Nonparticipating Financial Institution payments to which are 

reportable under subparagraph 1(b) of Article 4 of the Agreement, 

unless the Reporting Canadian Financial Institution:

(1) Obtains a self-certification (which may be on an IRS Form 

W-8 or similar agreed form) from the Account Holder that 

it is a certified deemed-compliant FFI, or an exempt 

beneficial owner, as those terms are defined in relevant 

U.S. Treasury Regulations; or

(2) In the case of a participating FFI or registered deemedcompliant FFI, verifies the Account Holder’s Global 

Intermediary Identification Number on the published IRS 

FFI list.

4. Determine Whether an Account Held by an NFFE Is a U.S. 

Reportable Account. With respect to an Account Holder of a Preexisting 

Entity Account that is not identified as either a U.S. Person or a Financial 

Institution, the Reporting Canadian Financial Institution must identify (i) 

whether the Account Holder has Controlling Persons, (ii) whether the 

Account Holder is a Passive NFFE, and (iii) whether any of the 

Controlling Persons of the Account Holder is a U.S. citizen or resident. In 

making these determinations the Reporting Canadian Financial Institution 

must follow the guidance in subparagraphs D(4)(a) through D(4)(d) of this 

section in the order most appropriate under the circumstances.

a) For purposes of determining the Controlling Persons of an Account 

Holder, a Reporting Canadian Financial Institution may rely on 

information collected and maintained pursuant to AML/KYC 

Procedures.

b) For purposes of determining whether the Account Holder is a 

Passive NFFE, the Reporting Canadian Financial Institution must 

obtain a self-certification (which may be on an IRS Form W-8 or 

W-9, or on a similar agreed form) from the Account Holder to 

establish its status, unless it has information in its possession or 

that is publicly available, based on which it can reasonably 

determine that the Account Holder is an Active NFFE.

c) For purposes of determining whether a Controlling Person of a 

Passive NFFE is a U.S. citizen or resident for tax purposes, a 

Reporting Canadian Financial Institution may rely on: 
31

(1) Information collected and maintained pursuant to 

AML/KYC Procedures in the case of a Preexisting Entity 

Account held by one or more NFFEs with an account 

balance or value that does not exceed $1,000,000; or

(2) A self-certification (which may be on an IRS Form W-8 or 

W-9, or on a similar agreed form) from the Account Holder 

or such Controlling Person in the case of a Preexisting 

Entity Account held by one or more NFFEs with an 

account balance or value that exceeds $1,000,000. 

d) If any Controlling Person of a Passive NFFE is a U.S. citizen or 

resident, the account shall be treated as a U.S. Reportable Account.

E. Timing of Review and Additional Procedures Applicable to Preexisting 

Entity Accounts.

1. Review of Preexisting Entity Accounts with an account balance or value 

that exceeds $250,000 as of June 30, 2014 must be completed by June 30, 

2016.

2. Review of Preexisting Entity Accounts with an account balance or value 

that does not exceed $250,000 as of June 30, 2014, but exceeds 

$1,000,000 as of December 31 of 2015 or any subsequent year, must be 

completed within six months after the last day of the calendar year in 

which the account balance or value exceeds $1,000,000.

3. If there is a change of circumstances with respect to a Preexisting Entity 

Account that causes the Reporting Canadian Financial Institution to know, 

or have reason to know, that the self-certification or other documentation 

associated with an account is incorrect or unreliable, the Reporting 

Canadian Financial Institution must redetermine the status of the account 

in accordance with the procedures set forth in paragraph D of this section.

V. New Entity Accounts. The following rules and procedures apply for purposes of 

identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial 

Institutions among Financial Accounts held by Entities and opened on or after July 1, 

2014 (“New Entity Accounts”). 

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. 

Unless the Reporting Canadian Financial Institution elects otherwise, either with 

respect to all New Entity Accounts or, separately, with respect to any clearly 

identified group of such accounts, where the implementing rules in Canada 

provide for such election, a credit card account or a revolving credit facility 

treated as a New Entity Account is not required to be reviewed, identified, or 

reported, provided that the Reporting Canadian Financial Institution maintaining 
32

such account implements policies and procedures to prevent an account balance 

owed to the Account Holder that exceeds $50,000.

B. Other New Entity Accounts. With respect to New Entity Accounts not 

described in paragraph A of this section, the Reporting Canadian Financial 

Institution must determine whether the Account Holder is: 

1. a Specified U.S. Person; 

2. a Canadian Financial Institution or other Partner Jurisdiction Financial 

Institution; 

3. a participating FFI, a deemed-compliant FFI, or an exempt beneficial 

owner, as those terms are defined in relevant U.S. Treasury Regulations; 

or 

4. an Active NFFE or Passive NFFE. 

C. Subject to paragraph D of this section, a Reporting Canadian Financial Institution 

may determine that the Account Holder is an Active NFFE, a Canadian Financial 

Institution, or other Partner Jurisdiction Financial Institution if the Reporting 

Canadian Financial Institution reasonably determines that the Account Holder has 

such status on the basis of the Account Holder’s Global Intermediary 

Identification Number or other information that is publicly available or in the 

possession of the Reporting Canadian Financial Institution, as applicable.

D. If the Account Holder is a Canadian Financial Institution or other Partner 

Jurisdiction Financial Institution treated by the IRS as a Nonparticipating 

Financial Institution, then the account is not a U.S. Reportable Account, but 

payments to the Account Holder must be reported as contemplated in 

subparagraph 1(b) of Article 4 of the Agreement.

E. In all other cases, a Reporting Canadian Financial Institution must obtain a selfcertification from the Account Holder to establish the Account Holder’s status. 

Based on the self-certification, the following rules apply: 

1. If the Account Holder is a Specified U.S. Person, the Reporting Canadian 

Financial Institution must treat the account as a U.S. Reportable Account.

2. If the Account Holder is a Passive NFFE, the Reporting Canadian 

Financial Institution must identify the Controlling Persons as determined 

under AML/KYC Procedures, and must determine whether any such 

person is a U.S. citizen or resident on the basis of a self-certification from 

the Account Holder or such person. If any such person is a U.S. citizen or 

resident, the Reporting Canadian Financial Institution must treat the 

account as a U.S. Reportable Account.

3. If the Account Holder is: 
33

a) a U.S. Person that is not a Specified U.S. Person; 

b) subject to subparagraph E(4) of this section, a Canadian Financial 

Institution or other Partner Jurisdiction Financial Institution;

c) a participating FFI, a deemed-compliant FFI, or an exempt 

beneficial owner, as those terms are defined in relevant U.S. 

Treasury Regulations; 

d) an Active NFFE; or 

e) a Passive NFFE none of the Controlling Persons of which is a U.S. 

citizen or resident, 

then the account is not a U.S. Reportable Account and no reporting is 

required with respect to the account.

4. If the Account Holder is a Nonparticipating Financial Institution 

(including a Canadian Financial Institution or other Partner Jurisdiction 

Financial Institution treated by the IRS as a Nonparticipating Financial 

Institution), then the account is not a U.S. Reportable Account, but 

payments to the Account Holder must be reported as contemplated in 

subparagraph 1(b) of Article 4 of the Agreement.

VI. Special Rules and Definitions. The following additional rules and definitions apply in 

implementing the due diligence procedures described above:

A. Reliance on Self-Certifications and Documentary Evidence. A Reporting 

Canadian Financial Institution may not rely on a self-certification or documentary 

evidence if the Reporting Canadian Financial Institution knows or has reason to 

know that the self-certification or documentary evidence is incorrect or unreliable.

B. Definitions. The following definitions apply for purposes of this Annex I.

1. AML/KYC Procedures. “AML/KYC Procedures” means the customer 

due diligence procedures of a Reporting Canadian Financial Institution 

pursuant to the anti-money laundering or similar requirements of Canada 

to which such Reporting Canadian Financial Institution is subject. 

2. NFFE. An “NFFE” means any Non-U.S. Entity that is not an FFI as 

defined in relevant U.S. Treasury Regulations or is an Entity described in 

subparagraph B(4)(j) of this section, and also includes any Non-U.S. 

Entity that is resident in Canada or another Partner Jurisdiction and that is 

not a Financial Institution.

3. Passive NFFE. A “Passive NFFE” means any NFFE that is not 
34

a) an Active NFFE; or 

b) a withholding foreign partnership or withholding foreign trust 

pursuant to relevant U.S. Treasury Regulations.

4. Active NFFE. An “Active NFFE” means any NFFE that meets any of the 

following criteria:

a) Less than 50 percent of the NFFE’s gross income for the preceding 

calendar year or other appropriate reporting period is passive 

income and less than 50 percent of the assets held by the NFFE 

during the preceding calendar year or other appropriate reporting 

period are assets that produce or are held for the production of 

passive income;

b) The stock of the NFFE is regularly traded on an established 

securities market or the NFFE is a Related Entity of an Entity the 

stock of which is regularly traded on an established securities 

market;

c) The NFFE is organized in a U.S. Territory and all of the owners of 

the payee are bona fide residents of that U.S. Territory;

d) The NFFE is a government (other than the U.S. government), a 

political subdivision of such government (which, for the avoidance 

of doubt, includes a state, province, county, or municipality), or a 

public body performing a function of such government or a 

political subdivision thereof, a government of a U.S. Territory, an 

international organization, a non-U.S. central bank of issue, or an 

Entity wholly owned by one or more of the foregoing; 

e) Substantially all of the activities of the NFFE consist of holding (in 

whole or in part) the outstanding stock of, or providing financing 

and services to, one or more subsidiaries that engage in trades or 

businesses other than the business of a Financial Institution, except 

that an NFFE shall not qualify for this status if the NFFE functions 

(or holds itself out) as an investment fund, such as a private equity 

fund, venture capital fund, leveraged buyout fund or any 

investment vehicle whose purpose is to acquire or fund companies 

and then hold interests in those companies as capital assets for 

investment purposes;

f) The NFFE is not yet operating a business and has no prior 

operating history, but is investing capital into assets with the intent 

to operate a business other than that of a Financial Institution, 

provided that the NFFE shall not qualify for this exception after 
35

the date that is 24 months after the date of the initial organization 

of the NFFE;

g) The NFFE was not a Financial Institution in the past five years, 

and is in the process of liquidating its assets or is reorganizing with 

the intent to continue or recommence operations in a business other 

than that of a Financial Institution;

h) The NFFE primarily engages in financing and hedging transactions 

with, or for, Related Entities that are not Financial Institutions, and 

does not provide financing or hedging services to any Entity that is 

not a Related Entity, provided that the group of any such Related 

Entities is primarily engaged in a business other than that of a 

Financial Institution; 

i) The NFFE is an “excepted NFFE” as described in relevant U.S. 

Treasury Regulations; or

j) The NFFE meets all of the following requirements:

(1) It is established and operated in its jurisdiction of residence 

exclusively for religious, charitable, scientific, artistic, 

cultural, athletic, or educational purposes; or it is 

established and operated in its jurisdiction of residence and 

it is a professional organization, business league, chamber 

of commerce, labor organization, agricultural or 

horticultural organization, civic league or an organization 

operated exclusively for the promotion of social welfare;

(2) It is exempt from income tax in its jurisdiction of residence; 

(3) It has no shareholders or members who have a proprietary 

or beneficial interest in its income or assets;

(4) The applicable laws of the NFFE’s jurisdiction of residence 

or the NFFE’s formation documents do not permit any 

income or assets of the NFFE to be distributed to, or 

applied for the benefit of, a private person or non-charitable 

Entity other than pursuant to the conduct of the NFFE’s 

charitable activities, or as payment of reasonable 

compensation for services rendered, or as payment 

representing the fair market value of property which the 

NFFE has purchased; and

(5) The applicable laws of the NFFE’s jurisdiction of residence 

or the NFFE’s formation documents require that, upon the 

NFFE’s liquidation or dissolution, all of its assets be 

distributed to a governmental entity or other non-profit 
36

organization, or escheat to the government of the NFFE’s 

jurisdiction of residence or any political subdivision

thereof.

5. Preexisting Account. A “Preexisting Account” means a Financial 

Account maintained by a Reporting Financial Institution as of June 30, 

2014.

C. Account Balance Aggregation and Currency Translation Rules.

1. Aggregation of Individual Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an individual, a 

Reporting Canadian Financial Institution is required to aggregate all 

Financial Accounts maintained by the Reporting Canadian Financial 

Institution, or by a Related Entity, but only to the extent that the Reporting 

Canadian Financial Institution’s computerized systems link the Financial 

Accounts by reference to a data element such as client number or taxpayer 

identification number, and allow account balances or values to be 

aggregated. Each holder of a jointly held Financial Account shall be 

attributed the entire balance or value of the jointly held Financial Account 

for purposes of applying the aggregation requirements described in this 

paragraph 1.

2. Aggregation of Entity Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an Entity, a 

Reporting Canadian Financial Institution is required to take into account 

all Financial Accounts that are maintained by the Reporting Canadian 

Financial Institution, or by a Related Entity, but only to the extent that the 

Reporting Canadian Financial Institution’s computerized systems link the 

Financial Accounts by reference to a data element such as client number 

or taxpayer identification number, and allow account balances or values to 

be aggregated.

3. Special Aggregation Rule Applicable to Relationship Managers. For 

purposes of determining the aggregate balance or value of Financial 

Accounts held by a person to determine whether a Financial Account is a 

High Value Account, a Reporting Canadian Financial Institution is also 

required, in the case of any Financial Accounts that a relationship manager 

knows, or has reason to know, are directly or indirectly owned, controlled, 

or established (other than in a fiduciary capacity) by the same person, to 

aggregate all such accounts.

4. Currency Translation Rule. For purposes of determining the balance or 

value of Financial Accounts denominated in a currency other than the U.S. 

dollar, a Reporting Canadian Financial Institution must convert the U.S. 

dollar threshold amounts described in this Annex I into such currency 

using a published spot rate determined as of the last day of the calendar 
37

year preceding the year in which the Reporting Canadian Financial 

Institution is determining the balance or value.

D. Documentary Evidence. For purposes of this Annex I, acceptable documentary 

evidence includes any of the following:

1. A certificate of residence issued by an authorized government body (for 

example, a government or agency thereof, or a municipality) of the 

jurisdiction in which the payee claims to be a resident.

2. With respect to an individual, any valid identification issued by an 

authorized government body (for example, a government or agency 

thereof, or a municipality), that includes the individual’s name and is 

typically used for identification purposes.

3. With respect to an Entity, any official documentation issued by an 

authorized government body (for example, a government or agency 

thereof, or a municipality) that includes the name of the Entity and either 

the address of its principal office in the jurisdiction (or U.S. Territory) in 

which it claims to be a resident or the jurisdiction (or U.S. Territory) in 

which the Entity was incorporated or organized.

4. With respect to a Financial Account maintained in a jurisdiction with antimoney laundering rules that have been approved by the IRS in connection 

with a QI agreement (as described in relevant U.S. Treasury Regulations), 

any of the documents, other than a Form W-8 or W-9, referenced in the 

jurisdiction’s attachment to the QI agreement for identifying individuals or 

Entities.

5. Any financial statement, third-party credit report, bankruptcy filing, or 

U.S. Securities and Exchange Commission report.

E. Alternative Procedures for Financial Accounts Held by Individual 

Beneficiaries of a Cash Value Insurance Contract. A Reporting Canadian 

Financial Institution may presume that an individual beneficiary (other than the 

owner) of a Cash Value Insurance Contract receiving a death benefit is not a 

Specified U.S. Person and may treat such Financial Account as other than a U.S. 

Reportable Account unless the Reporting Canadian Financial Institution knows, 

or has reason to know, that the beneficiary is a Specified U.S. Person. A 

Reporting Canadian Financial Institution has reason to know that a beneficiary of 

a Cash Value Insurance Contract is a Specified U.S. Person if the information 

collected by the Reporting Canadian Financial Institution and associated with the 

beneficiary contains U.S. indicia as described in subparagraph (B)(1) of section II 

of this Annex I. If a Reporting Canadian Financial Institution knows, or has 

reason to know, that the beneficiary is a Specified U.S. Person, the Reporting 

Canadian Financial Institution must follow the procedures in subparagraph B(3) 

of section II of this Annex I.
38

F. Reliance on Third Parties. Regardless of whether an election is made under 

paragraph C of section I of this Annex I, Canada may permit Reporting Canadian 

Financial Institutions to rely on due diligence procedures performed by third 

parties, to the extent provided in relevant U.S. Treasury Regulations.
39

Annex II

Non-Reporting Canadian Financial Institutions and Products

I. General

A. This Annex may be modified by a mutual written decision entered into between 

the Competent Authorities of Canada and the United States: 

1. To include additional Entities, accounts, and products that present a low 

risk of being used by U.S. Persons to evade U.S. tax and that have similar 

characteristics to the Entities, accounts, and products identified in this 

Annex as of the date of signature of the Agreement; or 

2. To remove Entities, accounts, and products that, due to changes in 

circumstances, no longer present a low risk of being used by U.S. Persons 

to evade U.S. tax. 

Any such addition or removal shall be effective on the date of signature of the 

mutual decision unless otherwise provided therein. 

B. Procedures for reaching a mutual decision described in paragraph A of this 

section may be included in the mutual agreement or arrangement described in 

paragraph 6 of Article 3 of the Agreement. 

II. Exempt Beneficial Owners

The following Entities shall be treated as Non-Reporting Canadian Financial Institutions 

and as exempt beneficial owners for the purposes of sections 1471 and 1472 of the U.S. 

Internal Revenue Code:

A. Central Bank

1. The Bank of Canada.

B. International Organizations

1. A Canadian office of an international organization as defined under 

paragraph (1) of Section 2 of the Foreign Missions and International 

Organizations Act. 

C. Retirement Funds

1. Any plan or arrangement established in Canada and described in 

paragraph 3 of Article XVIII (Pensions and Annuities) of the Convention, 

including any plan or arrangement that the Competent Authorities may 

agree under subparagraph 3(b) of Article XVIII is similar to a plan or 

arrangement under that subparagraph. 
40

D. Investment Entity Wholly Owned by Exempt Beneficial Owners

1. An Entity that is a Canadian Financial Institution solely because it is an 

Investment Entity, provided that each direct holder of an Equity Interest in 

the Entity is an exempt beneficial owner, and each direct holder of a debt 

interest in such Entity is either a Depository Institution (with respect to a 

loan made to such Entity) or an exempt beneficial owner.

III. Deemed-Compliant Financial Institutions

The following Financial Institutions are Non-Reporting Canadian Financial Institutions 

that shall be treated as deemed-compliant FFIs for the purposes of section 1471 of the 

U.S. Internal Revenue Code. 

A. Financial Institution with a Local Client Base. A Financial Institution that 

qualifies as a local FFI as described in relevant U.S. Treasury regulations, 

applying subparagraphs A(1), A(2) and A(3) of this section in lieu of the relevant 

paragraphs in those regulations:

1. Beginning on or before July 1, 2014, the Financial Institution must have 

policies and procedures, consistent with those set forth in Annex I, to

prevent the Financial Institution from providing a Financial Account to

any Nonparticipating Financial Institution and to monitor whether the 

Financial Institution opens or maintains a Financial Account for any 

Specified U.S. Person who is not a resident of Canada (including a U.S. 

Person that was a resident of Canada when the Financial Account was 

opened but subsequently ceases to be a resident of Canada) or any Passive 

NFFE with Controlling Persons who are U.S. residents or U.S. citizens 

who are not residents of Canada; 

2. Such policies and procedures must provide that if any Financial Account 

held by a Specified U.S. Person who is not a resident of Canada or by a 

Passive NFFE with Controlling Persons who are U.S. residents or U.S. 

citizens who are not residents of Canada is identified, the Financial 

Institution must report such Financial Account as would be required if the 

Financial Institution were a Reporting Canadian Financial Institution 

(including by following the applicable registration requirements on the 

IRS FATCA registration website) or close such Financial Account;

3. With respect to a Preexisting Account held by an individual who is not a 

resident of Canada or by an Entity, the Financial Institution must review 

those Preexisting Accounts in accordance with the procedures set forth in 

Annex I applicable to Preexisting Accounts to identify any Financial 

Account held by a Specified U.S. Person who is not a resident of Canada, 

by a Passive NFFE with Controlling Persons who are U.S. residents or 

U.S. citizens who are not residents of Canada, or by a Nonparticipating 
41

Financial Institution, and must report such Financial Account as would be 

required if the Financial Institution were a Reporting Canadian Financial 

Institution (including by following the applicable registration requirements 

on the IRS FATCA registration website) or close such Financial Account;

B. Local Bank. A Financial Institution that qualifies as a nonregistering local bank 

as described in relevant U.S. Treasury regulations, using the following definitions 

where applicable: 

1. The term “bank” shall include any Depository Institution to which the 

Bank Act or the Trust and Loan Companies Act applies, or which is a trust 

or loan company regulated by a provincial Act; and

2. The term “credit union or similar cooperative credit organization that is 

operated without profit” shall include any credit union or similar 

cooperative credit organization that is entitled to tax-favored treatment 

with respect to distributions to its members under Canadian law, including 

any credit union as defined in subsection 137(6) of the Income Tax Act. 

C. Financial Institution with Only Low-Value Accounts. A Canadian Financial 

Institution satisfying the following requirements:

1. The Financial Institution is not an Investment Entity;

2. No Financial Account maintained by the Financial Institution or any 

Related Entity has a balance or value in excess of $50,000, applying the 

rules set forth in Annex I for account aggregation and currency 

translation; and 

3. The Financial Institution does not have more than $50 million in assets on 

its balance sheet, and the Financial Institution and any Related Entities, 

taken together, do not have more than $50 million in total assets on their 

consolidated or combined balance sheets. 

D. Sponsored Investment Entity and Controlled Foreign Corporation. A 

Financial Institution described in subparagraph D(1) or D(2) of this section 

having a sponsoring entity that complies with the requirements of subparagraph 

D(3) of this section. 

1. A Financial Institution is a sponsored investment entity if: 

a. It is an Investment Entity established in Canada that is not a

qualified intermediary, withholding foreign partnership, or 

withholding foreign trust pursuant to relevant U.S. Treasury 

Regulations; and 
42

b. An Entity has agreed with the Financial Institution to act as a 

sponsoring entity for the Financial Institution. 

2. A Financial Institution is a sponsored controlled foreign corporation if: 

a. The Financial Institution is a controlled foreign corporation1

organized under the laws of Canada that is not a qualified 

intermediary, withholding foreign partnership, or withholding 

foreign trust pursuant to relevant U.S. Treasury Regulations; 

b. The Financial Institution is wholly owned, directly or indirectly, by 

a Reporting U.S. Financial Institution that agrees to act, or requires 

an affiliate of the Financial Institution to act, as a sponsoring entity 

for the Financial Institution; and 

c. The Financial Institution shares a common electronic account 

system with the sponsoring entity that enables the sponsoring 

entity to identify all Account Holders and payees of the Financial 

Institution and to access all account and customer information 

maintained by the Financial Institution including, but not limited 

to, customer identification information, customer documentation, 

account balance, and all payments made to the Account Holder or

payee. 

3. The sponsoring entity complies with the following requirements: 

a. The sponsoring entity is authorized to act on behalf of the 

Financial Institution (such as a fund manager, trustee, corporate 

director, or managing partner) to fulfill applicable registration 

requirements on the IRS FATCA registration website; 

b. The sponsoring entity has registered as a sponsoring entity with the 

IRS on the IRS FATCA registration website; 

c. If the sponsoring entity identifies any U.S. Reportable Accounts 

with respect to the Financial Institution, the sponsoring entity 

registers the Financial Institution pursuant to applicable 

registration requirements on the IRS FATCA registration website 

on or before the later of December 31, 2015 and the date that is 90 

days after such a U.S. Reportable Account is first identified; 

 

1 A “controlled foreign corporation” means any foreign (i.e., non-U.S.) corporation if more than 50 percent of the 

total combined voting power of all classes of stock of such corporation entitled to vote, or the total value of the 

stock of such corporation, is owned, or is considered as owned, by “United States shareholders” on any day during 

the taxable year of such foreign corporation. The term a “United States shareholder” means, with respect to any 

foreign corporation, a United States person who owns, or is considered as owning, 10 percent or more of the total 

combined voting power of all classes of stock entitled to vote of such foreign corporation.
43

d. The sponsoring entity agrees to perform, on behalf of the Financial 

Institution, all due diligence, reporting, and other requirements 

(including providing to any immediate payor the information 

described in subparagraph 1(e) of Article 4 of the Agreement), that 

the Financial Institution would have been required to perform if it 

were a Reporting Canadian Financial Institution; 

e. The sponsoring entity identifies the Financial Institution and 

includes the identifying number of the Financial Institution 

(obtained by following applicable registration requirements on the 

IRS FATCA registration website) in all reporting completed on the 

Financial Institution’s behalf; and 

f. The sponsoring entity has not had its status as a sponsor revoked.

E. Sponsored, Closely Held Investment Vehicle. A Canadian Financial Institution 

satisfying the following requirements:

1. The Financial Institution is a Financial Institution solely because it is an 

Investment Entity and is not a qualified intermediary, withholding foreign 

partnership, or withholding foreign trust pursuant to relevant U.S. 

Treasury Regulations; 

2. The sponsoring entity is a Reporting U.S. Financial Institution, Reporting 

Model 1 FFI, or Participating FFI, and is authorized to act on behalf of the 

Financial Institution (such as a professional manager, trustee, or managing 

partner); 

3. The Financial Institution does not hold itself out as an investment vehicle 

for unrelated parties; 

4. Twenty or fewer individuals own all of the debt interests and Equity 

Interests in the Financial Institution (disregarding debt interests owned by 

Participating FFIs and deemed-compliant FFIs and Equity Interests owned 

by an Entity if that Entity owns 100 percent of the Equity Interests in the 

Financial Institution and is itself a sponsored Financial Institution 

described in this paragraph E); and

5. The sponsoring entity complies with the following requirements: 

a. The sponsoring entity has registered as a sponsoring entity with the 

IRS on the IRS FATCA registration website; 

b. The sponsoring entity agrees to perform, on behalf of the Financial 

Institution, all due diligence, reporting, and other requirements 

(including providing to any immediate payor the information 

described in subparagraph 1(e) of Article 4 of the Agreement), that 
44

the Financial Institution would have been required to perform if it 

were a Reporting Canadian Financial Institution and retains 

documentation collected with respect to the Financial Institution

for a period of six years; 

c. The sponsoring entity identifies the Financial Institution in all 

reporting completed on the Financial Institution’s behalf; and 

d. The sponsoring entity has not had its status as a sponsor revoked. 

F. Restricted Fund. A Financial Institution that qualifies as a restricted fund as 

described in relevant U.S. Treasury regulations, applying the procedures set forth 

in, or required under, Annex I in lieu of the procedures set forth in, or required 

under, Treasury Regulation section 1.1471-4, and applying references to “report” 

or “reports” in lieu of references in relevant paragraphs in those regulations to 

“withhold and report” or “withholds and reports”, provided that the Financial 

Institution provides to any immediate payor the information described in 

subparagraph 1(e) of Article 4 of the Agreement, or fulfills the requirements 

described in subparagraph 1(d) of Article 4 of the Agreement, as applicable. 

G. Labour-Sponsored Venture Capital Corporations as prescribed in section 6701 of 

the Income Tax Regulations. 

H. Any Central Cooperative Credit Society as defined in section 2 of the Cooperative 

Credit Associations Act and whose accounts are maintained for member financial 

institutions.

I. Any entity described in paragraph 3 of Article XXI (Exempt Organizations) of the 

Convention. 

J. An Investment Entity established in Canada that is regulated as a collective 

investment vehicle, provided that all of the interests in the collective investment 

vehicle (including debt interests in excess of $50,000) are held by or through one 

or more exempt beneficial owners, Active NFFEs described in subparagraph B(4) 

of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or 

Financial Institutions that are not Nonparticipating Financial Institutions. 

K. Special Rules. The following rules apply to an Investment Entity: 

1. With respect to interests in an Investment Entity that is a collective 

investment vehicle described in paragraph J of this section, the reporting 

obligations of any Investment Entity (other than a Financial Institution 

through which interests in the collective investment vehicle are held) shall 

be deemed fulfilled.

2. With respect to interests in:
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a. An Investment Entity established in a Partner Jurisdiction that is 

regulated as a collective investment vehicle, all of the interests in 

which (including debt interests in excess of $50,000) are held by or 

through one or more exempt beneficial owners, Active NFFEs 

described in subparagraph B(4) of section VI of Annex I, U.S. 

Persons that are not Specified U.S. Persons, or Financial 

Institutions that are not Nonparticipating Financial Institutions; or

b. An Investment Entity that is a qualified collective investment 

vehicle under relevant U.S. Treasury Regulations;

the reporting obligations of any Investment Entity that is a Canadian 

Financial Institution (other than a Financial Institution through which 

interests in the collective investment vehicle are held) shall be deemed 

fulfilled.

3. With respect to interests in an Investment Entity established in Canada 

that is not described in paragraph J or subparagraph K(2) of this section, 

consistent with paragraph 3 of Article 5 of the Agreement, the reporting 

obligations of all other Investment Entities with respect to such interests 

shall be deemed fulfilled if the information required to be reported by the 

first-mentioned Investment Entity pursuant to the Agreement with respect 

to such interests is reported by such Investment Entity or another person.

IV. Accounts Excluded from Financial Accounts

The following accounts and products established in Canada and maintained by a 

Canadian Financial Institution shall be treated as excluded from the definition of 

Financial Accounts, and therefore shall not be treated as U.S. Reportable Accounts under 

the Agreement:

A. Registered Retirement Savings Plans (RRSPs) – as defined in subsection 146(1) 

of the Income Tax Act.

B. Registered Retirement Income Funds (RRIFs) – as defined in subsection 146.3(1) 

of the Income Tax Act.

C. Pooled Registered Pension Plans (PRPPs) – as defined in subsection 147.5(1) of 

the Income Tax Act.

D. Registered Pension Plans (RPPs) – as defined in subsection 248(1) of the Income 

Tax Act.

E. Tax-Free Savings Accounts (TFSAs) – as defined in subsection 146.2(1) of the 

Income Tax Act.
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F. Registered Disability Savings Plans (RDSPs) – as defined in subsection 146.4(1) 

of the Income Tax Act.

G. Registered Education Savings Plans (RESPs) – as defined in subsection 146.1(1) 

of the Income Tax Act.

H. Deferred Profit Sharing Plans (DPSPs) – as defined in subsection 147(1) of the 

Income Tax Act.

I. AgriInvest accounts – as defined under “NISA Fund No. 2” and “net income 

stabilization account” in subsection 248(1) of the Income Tax Act including 

Quebec’s Agri-Quebec program as prescribed in section 5503 of the Income Tax 

Regulations.

J. Eligible Funeral Arrangements – as defined under subsection 148.1 of the Income 

Tax Act.

K. Escrow Accounts. An account maintained in Canada established in connection 

with any of the following:

1. A court order or judgment.

2. A sale, exchange, or lease of real or immovable property or of personal or 

movable property, provided that the account satisfies the following 

requirements:

a. The account is funded solely with a down payment, earnest money, 

deposit in an amount appropriate to secure an obligation directly 

related to the transaction, or a similar payment, or is funded with a 

financial asset that is deposited in the account in connection with 

the sale, exchange, or lease of the property;

b. The account is established and used solely to secure the obligation 

of the purchaser to pay the purchase price for the property, the 

seller to pay any contingent liability, or the lessor or lessee to pay 

for any damages relating to the leased property as agreed under the 

lease;

c. The assets of the account, including the income earned thereon, 

will be paid or otherwise distributed for the benefit of the 

purchaser, seller, lessor, or lessee (including to satisfy such 

person’s obligation) when the property is sold, exchanged, or 

surrendered, or the lease terminates;

d. The account is not a margin or similar account established in 

connection with a sale or exchange of a financial asset; and
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e. The account is not associated with a credit card account.

3. An obligation of a Financial Institution servicing a loan secured by real or 

immovable property to set aside a portion of a payment solely to facilitate 

the payment of taxes or insurance related to the real or immovable 

property at a later time.

4. An obligation of a Financial Institution solely to facilitate the payment of 

taxes at a later time.

L. An account maintained in Canada and excluded from the definition of Financial 

Account under an agreement between the United States and another Partner 

Jurisdiction to facilitate the implementation of FATCA, provided that such 

account is subject to the same requirements and oversight under the laws of such 

other Partner Jurisdiction as if such account were established in that Partner 

Jurisdiction and maintained by a Partner Jurisdiction Financial Institution in that 

Partner Jurisdiction.