Question Period Note: COMMON REPORTING STANDARD (CRS)

What are the benefits of the Common Reporting Standard and how has it improved the Canada Revenue Agency’s ability to crackdown on those hiding assets offshore?

• Tax evasion and aggressive tax planning are global issues, and Canada is one of over 100 jurisdictions committed to implementing the Common Reporting Standard (CRS).

• Through CRS, tax authorities will automatically receive financial account information relating to their residents’ accounts across the world.

• Information being exchanged includes taxpayer name, address, date of birth, tax identification number, amounts paid or credited to the accounts and account balances.

• Canada exchanged CRS information in September 2018 and September 2019.

• This information will help the Canada Revenue Agency connect the dots and identify instances where Canadians hide money in offshore accounts to avoid paying taxes.

• The existence of the CRS is a deterrent. The data provided helps the Agency identify tax cheats, and its analysis of trends will help the Agency target those facilitating this non compliance.

The Organisation for Economic Co-operation and Development (OECD) recognized the challenges of tax avoidance and tax evasion for tax jurisdictions worldwide. As a result, the OECD rallied countries together to develop a new standard for automatic information exchanges, called the Common Reporting Standard (CRS). Under the CRS, over 100 participating jurisdictions have agreed to require financial institutions to identify financial accounts held by customers who are non-residents for tax purposes and to report these accounts to their tax authorities on an annual basis.

Canada has fully embraced this standard, and effective July 1, 2017, Canadian financial institutions started taking steps to identify certain accounts held by, or for the benefit of, non residents and to report these accounts to the Canada Revenue Agency. The Agency shares this information with CRS partners, and receives similar information for accounts held in other countries by Canadian residents. Because of this Government’s actions, since 2018, Canada is able to automatically exchange information with other jurisdictions to identify taxpayers with offshore accounts.

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