Will my bank abroad report my account to my home tax authority?
If the country where the account sits participates in automatic exchange, and the bank has identified you as tax resident elsewhere, then yes, as a matter of routine. The bank is not deciding whether you owe anything. It reports the identifying details it holds, the account and its balance data, and income credited to it, to its own authority, which passes the record to the authority of the residence country on file. That is why the self-certification you signed when the account was opened matters so much. It decides where the report is sent, and it is very often years out of date.
How would a tax authority find out about my foreign account?
In most cases it arrives as data rather than as an investigation. Exchange of information is machinery: records move between authorities under treaty and multilateral arrangements and are then matched against what the taxpayer filed. Nobody had to suspect you for the record to arrive. That is the practical point behind the term. An unreported foreign account is a question of timing rather than of discovery, so the useful question is not whether the account will surface but whether your own correction reaches the authority before the record does.
Is it too late to come forward if my account was already reported?
It depends on what the authority has done with the record, not on the fact that it holds one. Relief routes such as the CRA Voluntary Disclosures Program require the disclosure to be genuinely voluntary, which means made before the authority contacts you about that matter. A record sitting in a database is not the same thing as a letter on your doormat, but the gap between the two is not something you control. If a correction is being considered, the sequence of the filings rather than their speed is what preserves the relief.
What information about my account is actually exchanged?
Broadly, the identifying details the bank holds for you, the account identifier, balance data and income credited to the account. What is not exchanged is the story: which deposits were capital, which had already been taxed, which belonged to somebody else. That is precisely why an exchanged figure so often looks alarming and so rarely equals the taxable amount. When a letter quotes a number at you, the work is to reconcile that number to the return and to the underlying statements, not to accept it as income.
I closed the account years ago, does exchange still reach it?
Closure does not erase the history. An account can be reported for the periods it was open, including the year in which it was closed, and banks keep records well beyond closure and can be asked for them on request. So an account you consider finished can still generate a record, or an enquiry, long afterwards. When a filing history is rebuilt we treat closed accounts exactly as we treat open ones, because the authority receiving the data makes no distinction between them either.
Can a tax authority simply ask another country about me?
Yes. Alongside the automatic reporting, treaties and the multilateral machinery allow one authority to request specific information from another about a named taxpayer, usually where an examination is already under way. Those requests can reach documents that automatic reporting never covers. It is a different mode with different triggers: automatic exchange is routine and broad, exchange on request is targeted and follows an enquiry. Where a letter refers to information obtained from another country, working out which of the two it came from tells you a great deal about where the file stands.
What is cross-border tax?
Cross-border tax is what applies when income, assets or people touch more than one tax system at once — someone living in one country and earning in another, a company selling or hiring abroad, a family holding property in a second country. The work is rarely one country's rules applied harder; it is reconciling two sets of rules and claiming the relief that stops the same income being taxed twice at full rates. See what we do.
Is double taxation illegal?
It is legal. Two countries can each have a valid claim on the same income — one because the income arose there, the other because you live there — and nothing prohibits both from exercising it. What exists instead is relief: tax treaties allocate the claim, and domestic law gives a credit for foreign tax paid. The relief is not automatic, though. It is claimed on a return, and unclaimed relief is simply lost. See how double taxation is relieved.
