CRA’s exclusion of private trusts from the FATCA obligations of Canadian financial institutions is contrary to what the U.S. intended

CRA Guidance clarifies (see Example C) that private trusts are not subject to the due diligence and reporting obligations applicable under the Canadian FATCA rules to Canadian financial institutions (although as nonfinancial foreign entities they must still report any controlling U.S. person.)

Peter A. Cotorceanu, a U.S. tax lawyer with UBS, is quoted as saying that "Canada's decision to narrow the definition of financial institution could…lead to fairness concerns" for other jurisdictions whose private trusts are subject to the FATCA financial institution requirements and that "it's clear that [this exclusion]… wouldn't have been the understanding of Treasury when they wrote the IGAs."

Neal Armstrong. Summary of Kristen A. Parillo, "Canada's FATCA Guidance: Too Much Discretion Used?," Tax Notes International, July 14, 2014, p. 73 under s. 263(2).