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 It decides where the report is sent, and it is very often years out of date.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.
How does a remittance actually work, and is it taxed?
A remittance is a transfer of money, not a category of income, and moving your own funds between your own accounts is not what creates tax. What can create tax is the income behind the money and the rules of the country it leaves. India, for instance, collects tax at source when a resident individual remits abroad under the Liberalised Remittance Scheme, and requires certification before certain payments leave. The transfer is the trigger for paperwork rather than for tax. See the LRS and tax collected at source.
How does the treaty tie-breaker work when both countries say I am resident?
As a sequence, stopping at the first test that gives an answer: where you have a permanent home available; if in both or neither, where your centre of vital interests is; then habitual abode; then nationality; and if all of those tie, the two tax authorities decide by agreement. It is evidential rather than elective — you do not choose your treaty residence, you demonstrate it, which makes the record of homes, family and time the substance of the claim. See tie-breaking dual residency.
