Canada: Implementing common reporting standard (CRS) for Canadian financial institutions

Common reporting standard in Canada

Canadian financial institutions will be required to provide the Canada Revenue Agency (CRA) with information on accounts held by non-residents of Canada beginning in 2018. The CRA will provide this information to other countries’ tax authorities in exchange for information about Canadian financial account holders in their jurisdictions. Financial institutions must have procedures in place to identify this information by 1 July 2017.

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To allow the CRA to access this information, legislation proposed 15 April 2016 would require financial institutions in Canada to identify accounts held by non-residents (including dual or multiple residents) and report specific information relating to these accounts directly to the CRA. Information that must be reported includes account balances, interest, dividends received, and proceeds from the sale of financial assets. These rules apply to accounts held by individuals and certain entities. 

A variety of entities are included in the broad definition of “financial institution” for these reporting rules. Financial institutions required to report under the proposed legislation will need to have procedures in place beginning 1 July 2017 to identify accounts held by tax residents of various foreign jurisdictions and report the required information to the CRA.

The draft legislation introduces new provisions to Canada’s income tax law. While many of these provisions are similar to those relating to the Foreign Account Tax Compliance Act (FATCA), there are a number of key differences.

 

Read an April 2016 report [PDF 70 KB] prepared by the KPMG member firm in Canada: FIs — Get Ready for New Common Reporting Standard Rules

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