Fidelity Investments Canada ULC innovates by providing important U.S. tax information for entire mutual fund lineup

TORONTO, Dec. 11, 2013 /CNW/ - Fidelity Investments Canada ULC (Fidelity Canada) today announced that its entire mutual fund lineup will provide reporting information required to make certain elections under the U.S. Passive Foreign Investment Company rules (PFIC).  Fidelity Canada is taking a leadership position by making this option available to Canadian investors who are classified as "U.S. persons" under U.S. tax law.

"Fidelity Canada knows that many advisors and investors are concerned about the U.S. Passive Foreign Investment Company (PFIC) rules, which could significantly affect investors who hold Canadian mutual funds that have U.S. tax reporting obligations," said Peter Bowen, Vice President, Tax Research and Solutions, Fidelity Investments Canada ULC. "Fidelity Canada believes well managed mutual funds are a great way for investors to save for their financial goals. We want to support our clients who have U.S. tax filing obligations so that they can continue to have access to the entire Fidelity Canada mutual fund lineup."

For the 2013 tax year and going forward, Fidelity Canada will now provide PFIC Annual Information Statements, upon request, for the full range of its mutual funds; these statements will allow investors to make the Qualified Electing Fund (QEF) election on their 2013 U.S. tax returns. 

In making the QEF election, investors only include their pro-rata share of the mutual fund's earned income and capital gains for U.S. tax purposes.  This is similar to how U.S. mutual funds are taxed in the U.S. and generally aligned with how Canadian mutual funds are taxed in Canada. There are other reporting options, such as the Mark-to-Market election, but in many cases the QEF election will be the most beneficial to U.S. persons.

"PFIC rules are complex, and we believe it is important for advisors and their clients who may be impacted by these rules to have the knowledge necessary to make informed decisions. We believe that impacted clients should not make changes to their Canadian holdings without first speaking with their advisor and a U.S. tax specialist and informing them that Fidelity Canada mutual funds will now provide the necessary reporting information to support the PFIC - QEF election" said Bowen. 

To learn more about this new option and the PFIC rules, please visit http://www.fidelity.ca/cs/Satellite/en/public/products/regulatory_documents/pfic

About Fidelity Investments

Fidelity Investments Canada ULC is part of the Fidelity Investments organization of Boston, one of the world's largest providers of financial services. Recipient of the 2013 Morningstar Advisors' Choice Fund Company of the Year, Fidelity Canada manages a total of $82 billion in mutual fund and institutional assets. This includes $16 billion in assets for institutional clients including public and corporate defined benefit pension plans, endowments, foundations and other corporate assets on behalf of clients across Canada as at October 31, 2013.

Fidelity Canada provides Canadian investors a full range of domestic, international and income oriented mutual funds, as well as asset allocation and managed solutions and the high net worth program, the Fidelity Private Investment Program. Fidelity funds are available through a number of advice-based distribution channels including financial planners, investment dealers, banks, and insurance companies. Fidelity is a proud supporter of the Boys and Girls Clubs of Canada and we are dedicated to helping young Canadians realize their full potential as productive, responsible and caring citizens.

SOURCE: Fidelity Investments Canada ULC

Chris Pepper
Vice President, Corporate Affairs
Office: 416-307-5388
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Email: [email protected]