As a “US person”, you are required to annually complete the Report of Foreign Bank and Financial Accounts (FBAR) also known as the Financial Crimes Enforcement Network (FinCEN 114) form if the total value of your bank accounts held outside the United States exceeds the threshold of $10,000 US at least once during the year.
The definition of “US person” includes US citizens, US residents, US corporations and US trusts. This is a form that must be completed separately from the US tax return, unlike the Statement of Specified Foreign Financial Assets.
Accounts to report
Reportable accounts are those in which you have a direct interest, including your bank accounts, your non-registered investment accounts and your accounts from registered plans. Additionally, accounts in which you have no direct interest may also need to be reported if you have signing authority over them (for example, company accounts in which you are a shareholder).
If the FBAR form is not completed on time, you risk a penalty of more than $12,921 US (indexed annually) or even worse, the greater of between $129,210 (indexed annually) and 50% of the balance of the missing account(s), if the omission was made voluntarily.
As an US person, other forms may apply to you depending on your situation. This will be the case in particular if you have a TFSA, if you were a shareholder of a foreign company or if you hold mutual funds.
Do not hesitate to book an appointment with one of our tax experts specializing in US taxation or to drop your file on our virtual platform; it will be our pleasure to assist you in the preparation of the FBAR form.