On July 1, amendments to the Income Tax Act (Canada)
implementing international common reporting standards
(CRS) will come into force. The CRS regime is
intended to facilitate the exchange of taxpayer information between
governments. Financial institutions will be required to report
financial information about individuals and entities not resident
in Canada[1] to
the Canada Revenue Agency (CRA), which will in
turn share the information with the tax authorities in the
individual or entity's jurisdiction of residence.
Due diligence obligations
Under CRS, financial institutions in Canada will be required to
conduct due diligence on all financial accounts they maintain that
are in existence prior to July 1, 2017. Financial accounts are
defined broadly under CRS and include not just bank accounts, but
most types of investment accounts, most types of investments in
investment funds, and certain insurance contracts.
