Overview
To comply with Canadian and international tax laws, Loop must collect and verify your tax status during onboarding.
This process helps ensure that we meet all obligations for the CRA’s standard and the IRS compliance in the United States.
You’ll be asked to confirm your tax residency and complete a few simple questions and present your CRA business number. These ensure your account is properly classified and that you benefit from any applicable reduced withholding tax rates under tax treaties.
Understanding W-Forms
When opening certain types of accounts, you may be required to complete a W-8BEN or W-8BEN-E form.
W-8BEN is for individuals.
W-8BEN-E is for entities (such as corporations, partnerships, or charities).
These forms certify that you or your business are not U.S. persons and therefore are not subject to direct U.S. tax obligations.
They also allow Canadian residents to benefit from reduced U.S. withholding tax rates under existing tax treaties.
The CRA and IRS require these forms under the terms of their tax information exchange agreements. Every Loop client must complete the appropriate W-form to confirm their non-U.S. tax status.
Understanding RC518 and RC519 Forms
Loop is also required to collect RC518 and RC519 forms from certain clients under the Common Reporting Standard (CRS) and FATCA.
RC518 – Declaration of Tax Residence for Individuals (CRS)
This form determines an individual’s tax residency for reporting purposes. It helps the CRA identify whether you are a Canadian tax resident only, or also tax resident elsewhere.
If you are tax resident in another country, the CRA may share your account information with that country’s tax authority under international information-sharing agreements.
RC519 – Declaration of Tax Residence for Entities (CRS)
This form serves the same purpose for businesses, partnerships, and other entities. It identifies the entity’s tax residency and any controlling persons who may have tax obligations outside Canada.
Why These Forms Are Required
Canadian financial institutions like Loop must collect this information to:
Comply with CRS and FATCA reporting obligations;
Confirm and report accurate tax residency information;
Support international tax information exchange with the CRA and other authorities;
Prevent misreporting or non-compliance that could result in penalties.
In short, these forms verify where you or your business are tax resident, allowing Loop to maintain compliance while ensuring accurate reporting on your behalf.
What This Means for You
By completing your tax forms during onboarding, you help Loop:
Stay compliant with global tax regulations
Ensure your business benefits from correct treaty rates and reporting treatment
Maintain accurate, up-to-date account records for seamless international transactions.