Does this mean that the money in my Canadian savings account, which was taxed by the IRS when I earned it, is now subject to an additional 30% tax when I withdraw funds?
“Does this mean that the money in my Canadian savings account, which was taxed by the IRS when I earned it, is now subject to an additional 30% tax when I withdraw funds?”
Probably not. Canada does not have banking privacy laws. Although US citizens with funds out of the country are required to report if the total is over $10k, this is an attempt to make foreign banks report that information as well. It’s really about control and will affect middle class expats as well as the jet-setters.
It appears as if it is just on the earnings of that money.
Yep!
You got it.
Its called “witholding”
I doubt it but they will hold onto your cash if you attempt to move it until they’re sure its not subject to further taxes.
What i get out of this is the daily flow of American capital held by individuals will,on a daily basis,be subject to 30% withholding which may or may not be kept by the govt depending on its tax liability if any. The results are twofold (though with many many ramifications).
First,the govt will show way more cash on their books thus hiding their own poor finances. It will cycle through on a daily basis and we’re probably talking significant funds.
Second they will be discouraging Americans from having funds in foreign banks which is tantamount to a trade war. If Americans pull their cash from these banks then those banks will see their tier one or equivalent measure fall.
How would our government react if measure like these were enacted overseas? If the Saudis decided on special taxes for holdings in foreign countries so all those princes started dumping American stocks? This feels extremely isolationist to me.
Only if you've kept it secret (i.e., not declared it as a foreign account on your income tax, and refused to give --when asked, soon--your TIN to the Canadian bank to forward to the IRS).