# loophole



## monicaregister (Apr 28, 2018)

you said this, Just to add to what Moulard has said, the OECD has promoted a program of mutual exchange of data among banks and financial institutions to cut down on money laundering and international tax evasion. Mostly, this concerns "non-resident" accounts (i.e. customers who have accounts but who are resident elsewhere) but due to the US tax system, also any and all US citizens (or "persons").

Most banks these days will cover their own butts by requesting a statement from customers who are "foreigners" as to their nationalities and/or tax residence(s). If you aren't a US person, FATCA has nothing to do with it.


specifically, mutual exchange of data among banks and financial institutions. if there was a loophole, who or how could this loophole be discovered? if someone was born in el salvador but in fact was living in canada but the banks only had knowledge that this individual was in fact still living only in el salvador, then how could fatca, oecd, csr, tiae, canadian government find out about this lie then? the offshore banks only had knowledge that they were submitting annually information from el salvador and nowhere else, so then how could this loophole be uncovered then? i was born in el salvador but in fact have moved to canada. the banks only have knowledge that in fact i only and still live in el salvador and dont have any knowledge of me living in canada. then how could this loophole be discovered or uncovered if they have no knowledge of me actually living in another country that is not el salvador then? is this now making sense? rsvp.


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## Bevdeforges (Nov 16, 2007)

> is this now making sense? rsvp.


Not really. FATCA, the OECD and the other acronyms are merely the various organizations that write the regulations or (in the case of FATCA) just the name of the regulations themselves. If you are not a US person, then FATCA has no relevance to you. The main things you need to worry about are your tax obligations, based on your citizenship and your country or countries of "tax residence." It becomes an issue between you and whatever financial institution you choose to deal with.
Cheers,
Bev


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## Nononymous (Jul 12, 2011)

In most cases financial institutions rely on "self-certification" - customers reporting honestly their other countries of citizenship or tax residency. It is fairly easy to lie. There may be consequences to being caught lying, or there may not. Lying to a bank is probably far less serious than lying to the tax authorities in countries where you live or have income or assets.

More specifically, reading your comment, I assume that you live in Canada but still have assets in El Salvador that you have not declared to CRA, and you are worried that your banks in El Salvador will discover that you live in Canada and report the assets to the Canadian government under CRS. That would be a bad thing, but if you are breaking Canadian law by keeping undeclared money offshore, then it's a risk you take.


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## monicaregister (Apr 28, 2018)

*oecd*

the only thing that i can assume when you said that oecd, csr, and tax information exchange agreement is that there is a mutual exchange of information like you yourself said. oecd, csr, tiea, ect........... have some way of cross referencing the information and maybe then im assuming can find or discover the loophole/lie, does this make sense????? what i cant figure out is exactly how, that is to say specifically/exactly how they would uncover the loophole/lie???? does this make sense??? its like when you have a new email address and start receiving junk email, the question is how did the spammers get your email address????? its a question of how exactly/specifically when the mutual exchange of information is working that they would uncover such a loophole/lie? you already told me how the mutual exchange of information works but specifically/exactly how would this gap be discovered by the mutual exchange of information????????????? is this now making sense how im describing everything? rsvp.


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## Nononymous (Jul 12, 2011)

You might get away with it forever. Or your bank in El Salvador might somehow discover that you have a Canadian address or phone number and start reporting you to the Canadian authorities under CRS and then, if the amounts were high enough, you would be in trouble. 

By the way, it's not a loophole. It's lying to conceal the fact that you are tax resident in another country. I personally think that's a smart, ethical thing to do when you live in Canada and don't want the US to know about your accounts (if you are US citizen who does not wish to comply with FATCA or US tax obligations) but I'm not sure I agree that it's a smart, ethical thing to do if you are not reporting offshore accounts to the country in which you are currently living!


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## Bevdeforges (Nov 16, 2007)

The various tax authorities have their own ways of discovering tax evasion - usually limited to the usual reporting mechanisms within the country (i.e. the banks normally have to report all transactions over a certain amount to the tax authority). 

All the international regulations do is to require banks and financial institutions to report transaction information or balances to the tax authority of other countries when their customers have "tax residence" or a tax obligation elsewhere.

Absent this exchange of information between countries, local tax authorities still have means of determining that someone isn't declaring income or wealth that they should be doing - for example, if you receive large transfers (or regular smaller transfers) of funds from outside the country. Or if your lifestyle clearly exceeds the income you report on your local tax returns.

How carefully they look at this kind of thing depends on the amounts of money involved.
Cheers,
Bev


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