If you’re living abroad, chances are you’ve opened a local bank account. Seems simple enough, right? But for expats, foreign accounts come with reporting traps that can lead to hefty fines

1. It’s Not Just About Interest

Even if your overseas account pays little (or no) interest, many tax offices require you to declare the balance itself.

• Australia: The ATO expects you to report all worldwide income, including foreign bank interest. ATO – Foreign Income

• Canada: Once your foreign holdings exceed CAD 100,000, you may need to file Form T1135. CRA – T1135

2. Reporting Thresholds Vary

Every country sets its own rules:

• U.S. expats: FBAR (FinCEN Form 114) required if balances exceed USD 10,000. IRS – FBAR

• Canada: Foreign income verification via T1135. CRA – Foreign Income

• Australia: No threshold — everything is reportable.

3. Penalties Can Be Brutal

Failure to report can mean thousands in penalties per year. Some countries even impose criminal liability for repeated non-disclosure.

4. Tax Treaties Won’t Save You

Treaties help avoid double taxation, but they don’t excuse you from reporting obligations.

Bottom line: Don’t treat foreign bank accounts like “out of sight, out of mind.” Reporting is just as important as paying your tax.

Want the full lowdown on what counts as reportable income and how to avoid these traps? Check out my Australia Expat Tax Guide.

External Source: Here’s a solid summary of country-by-country reporting rules: Global Tax Reporting Obligations (Deloitte)</p>

Please refer to this page to see all my other expat tax tips.