Archived - Legislative Proposals Relating to the Implementation of the OECD Common Reporting Standard
This page has been archived on the Web
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.
1. (1) The
Income Tax Act
is amended by adding the following after part XVIII:
Part
XIX
Common
Reporting Standard
Definitions
270 (1) The following definitions apply in this
Part.
account
holder
titulaire de compte
account
holder means
(a) the person listed or identified as the holder of a
financial account by the financial institution that maintains the account, other
than a person (other than a financial institution) holding a financial account
for the benefit of, or on behalf of, another person as agent, custodian,
nominee, signatory, investment advisor or intermediary; and
(b) in the case of a cash value insurance contract or an
annuity contract,
(i) any person entitled to access the cash value or
change the beneficiary,
(ii) if no person can access the cash value or change the
beneficiary,
(A) any person named as the owner in the contract,
and
(B) any person with a vested entitlement to payment
under the terms of the contract, and
(iii) upon maturity of the cash value insurance contract
or annuity contract, each person entitled to receive a payment under the
contract.
active
NFE
ENF active
active
NFE means, at any time, a non-financial
entity that meets any of the following criteria:
(a) less than 50% of the NFE’s gross income for the
preceding fiscal period is passive income and less than 50% of the assets held
by the NFE during the preceding fiscal period are assets that produce or are
held for the production of passive income;
(b) either
(i) interests in the NFE are regularly traded on an
established securities market, or
(ii) the NFE is a related entity of an entity interests
in which are regularly traded on an established securities market;
(c) the NFE is
(i) a governmental entity,
(ii) an international organization,
(iii) a central bank, or
(iv) an entity wholly owned by one or more entities
described in subparagraphs (i) to (iii);
(d) both
(i) all or substantially all of the activities of the
NFE consist of holding (in whole or in part) the outstanding stock of, or
providing financing and services to, one or more of its subsidiaries that engage
in trades or businesses other than the business of a financial institution,
and
(ii) the NFE does not function as (and is not represented
or promoted to the public as) an investment fund, including
(A) a private equity fund,
(B) a venture capital fund,
(C) a leveraged buyout fund, and
(D) an investment vehicle whose purpose is to acquire or
fund companies and then hold interests in those companies as capital assets for
investment purposes;
(e) the NFE
(i) is not yet operating a business,
(ii) has no prior operating history,
(iii) is investing capital into assets with the intent to
operate a business other than that of a financial institution, and
(iv) was initially organized no more than 24 months prior
to that time;
(f) the NFE has not been a financial institution in any
of the past five years and is in the process of liquidating its assets or is
reorganizing with the intent to continue or recommence operations in a business
other than that of a financial institution;
(g) the NFE primarily engages in financing and hedging
transactions with, or for, related entities that are not financial institutions,
and does not provide financing or hedging services to any entity that is not a
related entity, provided that the group of those related entities is primarily
engaged in a business other than that of a financial institution;
and
(h) the NFE meets all of the following
requirements:
(i) it
(A) is established and operated in its jurisdiction of
residence exclusively for religious, charitable, scientific, artistic, cultural,
athletic or educational purposes, or
(B) is established and operated in its jurisdiction of
residence and it is a professional organization, business league, chamber of
commerce, labour organization, agricultural or horticultural organization, civic
league or an organization operated exclusively for the promotion of social
welfare,
(ii) it is exempt from income tax in its jurisdiction of
residence,
(iii) it has no shareholders or members who have a
proprietary or beneficial interest in its income or assets,
(iv) the applicable laws of the NFE’s jurisdiction of
residence or the NFE’s formation documents do not permit any income or assets of
the NFE to be distributed to, or applied for the benefit of, a private person or
non-charitable entity other than pursuant to the conduct of the NFE’s charitable
activities, or as payment of reasonable compensation for services rendered, or
as payment representing the fair market value of property which the NFE has
purchased, and
(v) the applicable laws of the NFE’s jurisdiction of
residence or the NFE’s formation documents require that, upon the NFE’s
liquidation or dissolution, all of its assets be distributed to a governmental
entity or other non-profit organization, or escheat to the government of the
NFE’s jurisdiction of residence or any political subdivision
thereof.
anti-money
laundering and know your customer procedures
or AML/KYC
procedures
procédures de connaissance de la
clientèle et de lutte contre le blanchiment d’argent ou procédures
AML/KYC
anti-money
laundering and know your customer procedures
or AML/KYC procedures means the
record keeping, verification of identity, reporting of suspicious transactions
and registration requirements required of a reporting financial institution
under the Proceeds of
Crime (Money Laundering) and Terrorist Financing Act.
broad
participation retirement fund
fonds de retraite à large
participation
broad
participation retirement fund means a
fund that is established to provide retirement, disability or death benefits to
beneficiaries that are current or former employees (or persons designated by
those employees) of one or more employers in consideration for services
rendered, provided that the fund
(a) does not have a single beneficiary with a right to
more than 5% of the fund’s assets;
(b) is subject to government regulation and provides
information reporting to the Minister; and
(c) satisfies at least one of the following
requirements:
(i) the fund is generally exempt from tax on investment
income, or taxation of investment income is deferred or taxed at a reduced rate,
due to its status as a retirement or pension plan,
(ii) the fund receives at least 50% of its total
contributions (other than transfers of assets from broad participation
retirement funds, narrow participation retirement funds or from retirement and
pension accounts described in paragraph (a) of the definition excluded account) from the sponsoring
employers,
(iii) distributions or withdrawals from the fund
are
(A) allowed only upon the occurrence of specified events
related to retirement, disability or death (except rollover distributions to
broad participation retirement funds, narrow participation retirement funds and
pension funds of a governmental entity, international organization or central
bank or retirement and pension accounts described in paragraph (a) of the
definition excluded account),
or
(B) subject to penalties if they are made before such
specified events, and
(iv) contributions (other than permitted make-up
contributions) by an employee to the fund
(A) are limited by reference to the employee’s
remuneration, or
(B) may not exceed 50,000 USD annually, applying the
rules set forth in subsection 277(3).
canadian
financial institution
institution financière
canadienne
canadian
financial institution means a financial
institution that is
(a) either
(i) resident in Canada, but excluding any branch of the
financial institution that is located outside Canada, or
(ii) a branch of a financial institution that is not
resident in Canada, if the branch is located in Canada; and
(b) a listed financial institution as defined in
subsection 263(1).
cash
value
valeur de rachat
cash
value, in respect of a contract held by
a policyholder, means the greater of the amount that the policyholder is
entitled to receive upon surrender or termination of the contract (determined
without reduction for any surrender charge or policy loan) and the amount the
policyholder can borrow under or with regard to the contract, but does not
include an amount payable under an insurance contract
(a) solely by reason of the death of an individual
insured under a life insurance contract;
(b) as a personal injury or sickness benefit, or other
benefit, providing indemnification of an economic loss incurred upon the
occurrence of an event insured against;
(c) as a refund of a previously paid premium (less any
cost of insurance charges whether or not actually imposed) under an insurance
contract (other than an investment-linked life insurance or annuity contract)
due to the cancellation or termination of the contract, a decrease in risk
exposure during the effective period of the contract or arising from the
correction of a posting or similar error with regard to the premium for the
contract;
(d) as a policyholder dividend (other than a termination
dividend) provided that the dividend relates to an insurance contract under
which the only benefits payable are described in paragraph (b); or
(e) as a return of an advance premium or premium deposit
for an insurance contract for which the premium is payable at least annually, if
the amount of the advance premium or premium deposit does not exceed the next
annual premium that will be payable under the contract.
cash
value insurance contract
contrat d’assurance avec valeur de
rachat
cash
value insurance contract means an
insurance contract (other than an indemnity reinsurance contract between two
insurance companies) that has a cash value.
central
bank
banque centrale
central
bank means an institution that is, by
law or government sanction, the principal authority, other than the government
of the jurisdiction itself, issuing instruments intended to circulate as
currency and may include an instrumentality that is separate from the government
of the jurisdiction, whether or not owned in whole or in part by the
jurisdiction.
controlling
persons
personnes détenant le
contrôle
controlling
persons, in respect of an entity, means
the natural persons who exercise control over the entity, and
includes
(a) in the case of a trust,
(i) its settlors,
(ii) its trustees,
(iii) its protectors (if any),
(iv) its beneficiaries (for this purpose, a discretionary
beneficiary of a trust will only be considered a beneficiary of the trust in a
calendar year if a distribution has been paid or made payable to the
discretionary beneficiary in the calendar year), and
(v) any other natural persons exercising ultimate
effective control over the trust; and
(b) in the case of a legal arrangement other than a
trust, persons in equivalent or similar positions to those described in
paragraph (a).
custodial
account
compte de dépositaire
custodial
account means an account (other than an
insurance contract or annuity contract) that holds one or more financial assets
for the benefit of another person.
custodial
institution
établissement de garde de
valeurs
custodial
institution means an entity, if the
entity’s gross income attributable to the holding of financial assets for the
account of others and related financial services equals or exceeds 20% of the
entity’s gross income during the shorter of
(a) the three-year period that ends at the end of the
entity’s last fiscal period; and
(b) the period during which the entity has been in
existence.
depository
account
compte de dépôt
depository
account includes
(a) any commercial, chequing, savings, time or thrift
account, or an account that is evidenced by a certificate of deposit, thrift
certificate, investment certificate, certificate of indebtedness or other
similar instrument maintained by a financial institution in the ordinary course
of a banking or similar business; and
(b) an amount held by an insurance company under a
guaranteed investment contract or similar agreement to pay or credit interest on
the contract.
depository
institution
établissement de dépôt
depository
institution means any entity that
accepts deposits in the ordinary course of a banking or similar
business.
documentary
evidence
preuve documentaire
documentary
evidence includes
(a) a certificate of residence issued by an authorized
government body (such as a government or agency thereof, or a municipality) of
the jurisdiction in which the payee claims to be a resident;
(b) with respect to an individual (other than a trust),
any valid identification issued by an authorized government body that includes
the individual’s name and is typically used for identification
purposes;
(c) with respect to an entity, any official
documentation issued by an authorized government body that includes the name of
the entity and either the address of its principal office in the jurisdiction in
which it claims to be resident or the jurisdiction in which the entity was
incorporated or organized; and
(d) any audited financial statement, third-party credit
report, bankruptcy filing or securities regulator’s report.
dormant
account
compte inactif
dormant
account means an account (other than an
annuity contract) that meets the following conditions:
(a) the balance or value of the account does not exceed
1,000 USD;
(b) the account holder has not initiated a transaction
with regard to the account, or any other account held by the account holder with
the reporting financial institution, in the previous three years;
(c) the account holder has not communicated with the
reporting financial institution regarding the account, or any other account held
by the account holder with the reporting financial institution, in the previous
six years;
(d) the account is treated as a dormant account under
the reporting financial institution’s normal operating procedures;
and
(e) in the case of a cash value insurance contract, the
reporting financial institution has not communicated with the account holder
regarding the account, or any other account held by the account holder with the
reporting financial institution, in the previous six years.
entity
entité
entity means a person (other than a natural person) or
arrangement, including a corporation, a partnership, a trust, an association, a
fund, a joint venture, an organization, a syndicate and a foundation.
equity
or debt interest
titre de participation ou
d’intérêt
equity
or debt interestincludes, in the case
of a partnership that is a financial institution, either a capital or profits
interest in the partnership.
established
securities market
marché boursier
réglementé
established
securities market means an exchange
that
(a) is officially recognized and supervised by a
governmental authority in which the market is located; and
(b) has an annual value of shares traded on the exchange
(or a predecessor exchange) exceeding one billion USD during each of the three
calendar years immediately preceding the calendar year in which the
determination is being made. For this purpose, if an exchange has more than one
tier of market level on which stock may be separately listed or traded, each of
those tiers must be treated as a separate exchange.
excluded
account
compte exclu
excluded
account means
(a) a retirement or pension account that satisfies the
following requirements:
(i) the account is
(A) subject to regulation as a personal retirement
account, or
(B) part of a registered or regulated retirement or
pension plan for the provision of retirement or pension benefits (including
disability or death benefits),
(ii) the account is tax-favoured in that
(A) contributions to the account that would otherwise be
subject to tax are deductible or excluded from the gross income of the account
holder or taxed at a reduced rate, or
(B) taxation of investment income within the account is
deferred or investment income within the account is taxed at a reduced
rate,
(iii) information reporting to the Minister is required
with respect to the account,
(iv) withdrawals are
(A) conditioned on reaching a specified retirement age,
disability or death, or
(B) subject to penalties if made before the events
specified in clause (A), and
(v) after applying the rules in subsection 277(3) to all
similar accounts, annual contributions to the account are limited to 50,000 USD
or less or there is a maximum lifetime contribution limit to the account of
1,000,000 USD or less (and an account that otherwise satisfies this requirement
will not fail to satisfy this requirement solely because the account may receive
assets or funds transferred from one or more accounts that meet the requirements
of paragraphs (a) or (b) or from one or more broad participation retirement
funds, narrow participation retirement funds or pension funds of a governmental
entity, international organization or central bank);
(b) an account that satisfies the following
requirements:
(i) the account
(A) is
(I) subject to regulation as an investment vehicle for
purposes other than for retirement, and
(II) regularly traded on an established securities
market, or
(B) is subject to regulation as a savings vehicle for
purposes other than for retirement,
(ii) the account is tax-favoured in that
(A) contributions to the account that would otherwise be
subject to tax are deductible or excluded from the gross income of the account
holder or taxed at a reduced rate, or
(B) taxation of investment income within the account is
deferred or investment income within the account is taxed at a reduced
rate,
(iii) withdrawals are
(A) conditioned on meeting specific criteria related to
the purpose of the investment or savings account (including the provision of
educational or medical benefits), or
(B) subject to penalties if made before the criteria in
clause (A) are met, and
(iv) annual contributions are, after applying the rules
in subsection 277(3) to all similar accounts, limited to 50,000 USD or less (and
an account that otherwise satisfies this requirement will not fail to satisfy
this requirement solely because the account may receive assets or funds
transferred from one or more accounts that meet the requirements of paragraphs
(a) or (b) or from one or more broad participation retirement funds, narrow
participation retirement funds or pension funds of a governmental entity,
international organization or central bank);
(c) a life insurance contract with a coverage period
that ends before the insured individual attains age 90, provided that the
contract satisfies the following requirements:
(i) periodic premiums, which do not decrease over time,
are payable at least annually until the earlier of
(A) the end of the period in which the contract is in
existence, and
(B) the date that the insured attains age
90,
(ii) the contract has no contract value that any person
can access (by withdrawal, loan or otherwise) without terminating the
contract,
(iii) the amount (other than a death benefit) payable upon
cancellation or termination of the contract cannot exceed the amount determined
by the formula
A − (B + C)
where
A is
the aggregate premiums paid for the contract,
B is
the total of all mortality, morbidity and expense charges (whether or not
actually imposed) for the period or periods of the contract’s existence,
and
C is
the total of all amounts paid prior to the cancellation or termination of the
contract, and
(iv) the contract has not been acquired by a transferee
for value;
(d) an account held solely by an estate of a deceased
individual, if the documentation for the account includes a copy of the will or
death certificate of the individual;
(e) an account established in connection with any of the
following:
(i) a court order or judgement,
(ii) a sale, exchange or lease of property, provided that
the account satisfies the following requirements:
(A) the account is funded
(I) solely with a down payment, earnest money, deposit
in an amount appropriate to secure an obligation directly related to the
transaction or a similar payment, or
(II) with a financial asset that is deposited in the
account in connection with the sale, exchange or lease of the
property,
(B) the account is established and used solely to secure
the obligation of
(I) the purchaser to pay the purchase price for the
property,
(II) the seller to pay any contingent liability,
or
(III) the lessor or lessee to pay for any damages relating
to the leased property as agreed under the lease,
(C) the assets of the account, including the income
earned on the account, will be paid or otherwise distributed for the benefit of
the purchaser, seller, lessor or lessee (including to satisfy such person’s
obligation) when the property is sold, exchanged or surrendered or the lease
terminates,
(D) the account is not a margin or similar account
established in connection with a sale or exchange of a financial asset,
and
(E) the account is not associated with an account
described in paragraph (f),
(iii) an obligation of a financial institution servicing a
loan secured by real or immovable property to set aside a portion of a payment
solely to facilitate the payment of taxes or insurance related to the property
at a later time, or
(iv) an obligation of a financial institution solely to
facilitate the payment of taxes at a later time;
(f) a depository account that satisfies the following
requirements:
(i) the account exists solely because a customer makes a
payment in excess of a balance due with respect to a credit card or other
revolving credit facility and the overpayment is not immediately returned to the
customer, and
(ii) after June 2017, policies and procedures are in
effect relating to overpayments (for this purpose, a customer overpayment does
not include credit balances to the extent of disputed charges but does include
credit balances resulting from merchandise returns) to either
(A) prevent a customer from making an overpayment in
excess of 50,000 USD, or
(B) ensure that any customer overpayment in excess of
50,000 USD is refunded to the customer within 60 days; and
(g) a prescribed account.
exempt
collective investment vehicle
mécanisme de placement collectif
dispensé
exempt
collective investment vehicle means an
investment entity that is regulated as a collective investment vehicle, provided
that all of the interests in the collective investment vehicle are held by or
through individuals or entities (other than a passive NFE with a controlling
person who is a reportable person) that are not reportable persons.
financial
account
compte financier
financial
account means an account maintained by
a financial institution, and
(a) includes
(i) a depository account,
(ii) a custodial account,
(iii) in the case of an investment entity, any equity or
debt interest in the financial institution, except that it does not include any
equity or debt interest in an entity that is an investment entity solely because
it,
(A) renders investment advice to, and acts on behalf of,
a customer for the purpose of investing, managing, or administering financial
assets deposited in the name of the customer with a financial institution other
than such entity, or
(B) manages portfolios for, and acts on behalf of, a
customer for the purpose of investing, managing, or administering financial
assets deposited in the name of the customer with a financial institution other
than such entity,
(iv) any equity or debt interest in the financial
institution if one of the purposes of establishing the class of interests was to
avoid reporting in accordance with section 271, except that it does not include
any equity or debt interest in an entity that is an investment entity solely
because it meets the conditions described in clauses (iii)(A) or
(B),
(v) any cash value insurance contract and any annuity
contract issued or maintained by a financial institution, other than a
non-investment-linked, non-transferable immediate life annuity that is issued to
an individual and monetizes a pension or disability benefit provided under an
account that is an excluded account, and
(vi) an account that is a client name account maintained
by a person or entity that is authorized under provincial legislation to engage
in the business of dealing in securities or any other financial instruments, or
to provide portfolio management or investment advising services;
and
(b) despite paragraph (a), does not include an excluded
account.
financial
asset
actif financier
financial
asset
(a) includes
(i) a security, such as
(A) a share of the capital stock of a
corporation,
(B) an income or capital interest in a widely held or
publicly traded trust, or
(C) a note, bond, debenture or other evidence of
indebtedness,
(ii) a partnership interest,
(iii) a commodity,
(iv) a swap (such as interest rate swaps, currency swaps,
basis swaps, interest rate caps, interest rate floors, commodity swaps, equity
swaps, equity index swaps and similar agreements),
(v) an insurance contract or annuity contract,
and
(vi) any interest (including a futures or forward
contract or option) in a security, partnership interest, commodity, swap,
insurance contract or annuity contract; but
(b) does not include a non-debt, direct interest in real
or immovable property.
financial
institution
institution financière
financial
institution means a custodial
institution, a depository institution, an investment entity or a specified
insurance company.
governmental
entity
entité gouvernementale
governmental
entity means the government of a
jurisdiction, any political subdivision of a jurisdiction (which, for greater
certainty, includes a state, province, county or municipality), a public body
performing a function of government in a jurisdiction or any agency or
instrumentality of a jurisdiction wholly owned by one or more of the foregoing,
unless it is not an integral part or a controlled entity of a jurisdiction (or a
political subdivision of a jurisdiction) and for these purposes
(a) an integral part of a jurisdiction means any person,
organization, agency, bureau, fund, instrumentality or other body, however
designated, that constitutes a governing authority of a jurisdiction, and where
the net earnings of the governing authority are credited to its own account or
to other accounts of the jurisdiction, with no portion inuring to the benefit of
any private person, except that an integral part does not include any individual
who is a sovereign, official or administrator acting in a private or personal
capacity;
(b) a controlled entity means an entity that is separate
in form from the jurisdiction or that otherwise constitutes a separate juridical
entity, provided that
(i) the entity is wholly owned and controlled by one or
more governmental entities directly or indirectly through one or more controlled
entities,
(ii) the entity’s net earnings are credited to its own
account or to the accounts of one or more governmental entities, with no portion
of its income inuring to the benefit of any private person, and
(iii) the entity’s assets vest in one or more governmental
entities upon liquidation and dissolution; and
(c) for the purposes of paragraphs (a) and
(b),
(i) income is deemed not to inure to the benefit of
private persons if such persons are the intended beneficiaries of a governmental
program and the program activities are performed for the general public with
respect to the common welfare or relate to the administration of government,
and
(ii) income is deemed to inure to the benefit of private
persons if the income is derived from the use of a governmental entity to
conduct a commercial business that provides financial services to private
persons.
group
annuity contract
contrat de rente de
groupe
group
annuity contract means an annuity
contract under which the obligees are individuals who are associated through an
employer, trade association, labour union or other association or
group.
group
cash value insurance contract
contrat d’assurance de groupe avec
valeur de rachat
group
cash value insurance contract means a
cash value insurance contract that
(a) provides coverage on individuals who are associated
through an employer, trade association, labour union or other association or
group; and
(b) charges a premium for each member of the group (or
member of a class within the group) that is determined without regard to the
individual health characteristics other than age, gender and smoking habits of
the member (or class of members) of the group.
high
value account
compe de valeur élevée
high
value account means a preexisting
individual account with an aggregate balance or value that exceeds 1 million USD
on June 30, 2017 or on December 31 of any subsequent year.
insurance
contract
contrat d’assurance
insurance
contract means a contract (other than
an annuity contract) under which the issuer agrees to pay an amount upon the
occurrence of a specified contingency involving mortality, morbidity, accident,
liability or property risk.
international
organization
organisation
internationale
international
organization means any
intergovernmental organization (or wholly owned agency or instrumentality
thereof), including a supranational organization,
(a) that is comprised primarily of
governments;
(b) that has in effect a headquarters or substantially
similar agreement with a jurisdiction; and
(c) the income of which does not inure to the benefit of
private persons.
investment
entity
entité
d’investissement
investment
entity means any entity (other than an
entity that is an active NFE because
of any of paragraphs (d) to (g) of that definition)
(a) that primarily carries on as a business one or more
of the following activities or operations for or on behalf of a
customer
(i) trading in money market instruments (such as
cheques, bills, certificates of deposit and derivatives), foreign exchange,
transferable securities or commodity futures, exchange, interest rate and index
instruments,
(ii) individual and collective portfolio management,
or
(iii) otherwise investing, administering or managing
financial assets or money on behalf of other persons; or
(b) the gross income of which is primarily attributable
to investing, reinvesting or trading in financial assets, if the entity is
managed by another entity that is a depository institution, a custodial
institution, a specified insurance company or an investment entity described in
paragraph (a).
lower
value account
compte de faible
valeur
lower
value account means a preexisting
individual account with an aggregate balance or value as of June 30, 2017
that does not exceed 1 million USD.
narrow
participation retirement fund
fonds de retraite à participation
étroite
narrow
participation retirement fund means a
fund that is established to provide retirement, disability or death benefits to
beneficiaries who are current or former employees (or persons designated by
those employees) of one or more employers in consideration for services
rendered, provided that
(a) the fund has fewer than 50
participants;
(b) the fund is sponsored by one or more employers that
are not investment entities or passive NFEs;
(c) the employee and employer contributions to the fund
(other than transfers of assets from retirement and pension accounts described
in paragraph (a) of the definition excluded
account) are limited by reference to the employee’s
remuneration;
(d) participants that are not resident in Canada are not
entitled to more than 20% of the fund’s assets; and
(e) the fund is subject to government regulation and
provides information reporting to the Minister.
natural
person
personne physique
natural
personmeans an individual other than a
trust.
new
account
nouveau compte
new
account means a financial account
maintained by a reporting financial institution opened after June
2017.
new
entity account
nouveau compte
d’entité
new
entity account means a new account held
by one or more entities.
new
individual account
nouveau compte de
particulier
new
individual account means a new account
held by one or more individuals (other than trusts).
non-financial
entity or
NFE
entité non financière ou ENF
non-financial
entity or NFE
means an entity if
(a) in the case of an entity that is resident in Canada,
it is not a Canadian financial institution; and
(b) in the case of a non-resident entity, it is not a
financial institution.
non-reporting
financial institution
institution financière non
déclarante
non-reporting
financial institution means a Canadian
financial institution that is
(a) the Bank of Canada;
(b) a governmental entity or international organization,
other than with respect to a payment that is derived from an obligation held in
connection with a commercial financial activity of a type engaged in by a
specified insurance company, custodial institution or depository
institution;
(c) a broad participation retirement fund, a narrow
participation retirement fund, a pension fund of a governmental entity,
international organization or central bank, or a qualified credit card
issuer;
(d) an exempt collective investment
vehicle;
(e) a trust if a trustee of the trust is a reporting
financial institution and reports all information required to be reported under
this Part with respect to all reportable accounts of the trust; or
(f) a prescribed entity.
participating
jurisdiction
juridiction partenaire
participating
jurisdiction means
(a) Canada; and
(b) each jurisdiction identified as a participating
jurisdiction by the Minister on the Internet website of the Canada Revenue
Agency or by any other means that the Minister considers
appropriate.
participating
jurisdiction financial institution
institution financière d’une
jurisdiction partenaire
participating
jurisdiction financial institution
means
(a) a financial institution that is resident in a
participating jurisdiction, but excludes a branch of that financial institution
that is located outside a participating jurisdiction; and
(b) a branch of a financial institution that is not
resident in a participating jurisdiction, if that branch is located in a
participating jurisdiction.
passive
NFE
ENF passive
passive
NFE means
(a) a non-financial entity that is not an active NFE;
and
(b) an entity that is
(i) described in paragraph (b) of the definition investment entity, and
(ii) not a participating jurisdiction financial
institution.
pension
fund of a governmental entity, international organization or central
bank
fonds de pension
désigné
pension
fund of a governmental entity, international organization or central
bank means a fund that is established
by a governmental entity, international organization or central bank to provide
retirement, disability or death benefits to beneficiaries or participants
(a) that are current or former employees (or persons
designated by those employees), or
(b) that are not current or former employees, if the
benefits provided to them are in consideration of personal services performed
for the governmental entity, international organization or central
bank.
preexisting
account
compte préexistant
preexisting
account means
(a) a financial account maintained by a reporting
financial institution on June 30, 2017, and
(b) a financial account of an account holder (other than
a financial account described in paragraph (a)) maintained by a reporting
financial institution if
(i) the account holder also holds with the reporting
financial institution (or with a related entity within Canada) a financial
account that is a preexisting account under paragraph (a),
(ii) the reporting financial institution (and, as
applicable, the related entity within Canada) treats both of the aforementioned
financial accounts, and any other financial accounts of the account holder that
are preexisting accounts under this paragraph, as a single financial account for
the purposes of satisfying the standards and knowledge requirements set forth
under this Part, and for the purposes of determining the balance or value of any
of the financial accounts, when applying any of the account
thresholds,
(iii) with respect to a financial account that is subject
to AML/KYC procedures, the reporting financial institution is permitted to
satisfy those AML/KYC procedures for the financial account by relying upon the
AML/KYC procedures performed for the preexisting account described in paragraph
(a), and
(iv) the opening of the financial account does not
require the provision of new, additional or amended customer information by the
account holder other than for purposes of this Part.
preexisting
entity account
compte d’entité
préexistant
preexisting
entity account means a preexisting
account held by one or more entities.
preexisting
individual account
compte de particulier
préexistant
preexisting
individual account means a preexisting
account held by one or more individuals (other than trusts).
qualified
credit card issuer
émetteur de carte de crédit
déterminé
qualified
credit card issuer means a financial
institution that satisfies the following requirements:
(a) the financial institution is a financial institution
solely because it is an issuer of credit cards that accepts deposits only when a
customer makes a payment in excess of a balance due with respect to the card and
the overpayment is not immediately returned to the customer; and
(b) the financial institution has policies and
procedures either to prevent a customer from making an overpayment in excess of
50,000 USD or to ensure that any customer overpayment in excess of 50,000 USD is
refunded to the customer within 60 days, in each case applying the rules set
forth in subsection 277(3) for account aggregation, and for the purposes of this
paragraph, a customer overpayment does not refer to credit balances to the
extent of disputed charges but does include credit balances resulting from
merchandise returns.
related
entity
entité liée
related
entity, in respect of an entity, means
an entity if either entity controls the other entity or the two entities are
controlled by the same entity or individual (and in the case of two entities
that are investment entities described under paragraph (b) of the definition
investment entity, the two entities
are under common management and such management fulfils the due diligence
obligations of the investment entities). For this purpose, control includes
direct or indirect ownership of
(a) in the case of a corporation, shares of the capital
stock of a corporation that
(i) give their holders 50% or more of the votes that
could be cast at the annual meeting of the shareholders of the corporation,
and
(ii) have a fair market value of 50% or more of the fair
market value of all the issued and outstanding shares of the capital stock of
the corporation;
(b) in the case of a partnership, an interest as a
member of the partnership that entitles the member to 50% or more
of
(i) the income or loss of the partnership,
or
(ii) the assets (net of liabilities) of the partnership
if it were to cease to exist; and
(c) in the case of a trust, an interest as a beneficiary
under the trust with a fair market value that is not less than 50% of the fair
market value of all interests as a beneficiary under the trust.
reportable
account
compte déclarable
reportable
account means an account
that
(a) is held by
(i) one or more reportable persons, or
(ii) by a passive NFE, if one or more controlling persons
of the passive NFE is a reportable person; and
(b) has been identified as meeting the conditions in
paragraph (a) pursuant to the due diligence procedures described in sections 272
to 277.
reportable
jurisdiction
juridiction soumise à
déclaration
reportable
jurisdiction means a jurisdiction other
than Canada and the United States of America.
reportable
jurisdiction person
personne d’une juridiction soumise
à déclaration
reportable
jurisdiction person means a natural
person or entity that is resident in a reportable jurisdiction under the tax
laws of that jurisdiction, or an estate of an individual who was a resident of a
reportable jurisdiction under the tax laws of that jurisdiction immediately
before death. For this purpose, an entity that has no residence for tax purposes
is deemed to be resident in the jurisdiction in which its place of effective
management is situated.
reportable
person
personne devant faire l’objet d’une
déclaration
reportable
person means a reportable jurisdiction
person other than
(a) a corporation the stock of which is regularly traded
on one or more established securities markets;
(b) any corporation that is a related entity of a
corporation described in paragraph (a);
(c) a governmental entity;
(d) an international organization;
(e) a central bank; or
(f) a financial institution.
reporting
financial institution
institution financière
déclarante
reporting
financial institution means a Canadian
financial institution that is not a non-reporting financial institution.
specified
insurance company
compagnie d’assurance
particulière
specified
insurance company means any entity that
is an insurance company (or the holding company of an insurance company) that
issues, or is obligated to make payments with respect to, cash value insurance
contracts or annuity contracts.
TIN
NIF
TIN means
(a) the number used by the Minister to identify an
individual or entity, including
(i) a social insurance number,
(ii) a business number, and
(iii) an account number issued to a trust;
and
(b) in respect of a jurisdiction other than Canada, a
taxpayer identification number used in that jurisdiction to identify an
individual or entity (or a functional equivalent in the absence of a taxpayer
identification number).
USD
USD
USD means dollars of the United States of
America.
Interpretation
(2) This Part relates to the implementation of the
Common Reporting Standard set out in the Standard for Automatic Exchange of
Financial Account Information in Tax Matters approved by the Council of the
Organisation for Economic Co-Operation and Development and, unless the context
otherwise requires, the provisions in this Part are to be interpreted
consistently with the Common Reporting Standard, as amended from time to
time.
Interpretation — investment
entity
(3) For the purposes of the definition investment entity in subsection (1), an entity
considered to be primarily carrying on as a business one or more of the
activities described in paragraph (a) of that definition, or an entity’s gross
income is primarily attributable to investing, reinvesting, or trading in
financial assets for the purposes of paragraph (b) of that definition, if the
entity’s gross income attributable to the relevant activities equals or exceeds
50% of the entity’s gross income during the shorter of
(a) the three-year period that ends at the end of the
entity’s last fiscal period; and
(b) the period during which the entity has been in
existence.
Equity or debt interest – deeming
rule
(4) In the case of a trust that is a financial
institution,
(a) an equity interest is deemed to be held by any
person treated as a settlor or beneficiary of all or a portion of the trust, or
any other natural person exercising ultimate effective control over the trust,
and
(b) a reportable person is treated as a beneficiary of a
trust if the reportable person has the right to receive directly or indirectly
(such as through a nominee) a mandatory distribution from the trust or may
receive, directly or indirectly, a discretionary distribution from the
trust.
General reporting
requirements
271 (1) Subject to subsections (3) and (4), each reporting
financial institution must report the following information to the Minister with
respect to each of its reportable accounts:
(a) the name, address, jurisdiction of residence, TIN
and date of birth (in the case of an individual) of each reportable person that
is an account holder of the account;
(b) in the case of any entity that is an account holder
of the account and that, after applying the due diligence procedures in sections
275 to 277, is identified as having one or more controlling persons that is a
reportable person,
(i) the name, address, jurisdiction of residence and TIN
of the entity, and
(ii) the name, address, jurisdiction of residence, TIN
and date of birth of each of those controlling person;
(c) the account number (or functional equivalent in the
absence of an account number) of the account;
(d) the name and identifying number (if any) of the
reporting financial institution;
(e) the account balance or value (including, in the case
of a cash value insurance contract or annuity contract, the cash value or
surrender value)
(i) at the end of the relevant calendar year or other
appropriate reporting period, or
(ii) if the account was closed during the relevant
calendar year or period, on closure of the account;
(f) in the case of any custodial account,
(i) the total gross amount of interest, the total gross
amount of dividends and the total gross amount of other income generated with
respect to the assets held in the account, in each case paid or credited to the
account (or with respect to the account) during the calendar year or other
appropriate reporting period, and
(ii) the total gross proceeds from the sale or redemption
of financial assets paid or credited to the account during the calendar year or
other appropriate reporting period with respect to which the reporting financial
institution acted as a custodian, broker, nominee or otherwise as an agent for
the account holder;
(g) in the case of any depository account, the total
gross amount of interest paid or credited to the account during the calendar
year or other appropriate reporting period; and
(h) in the case of any account not described in
paragraphs (f) or (g), the total gross amount paid or credited to the account
holder with respect to the account during the calendar year or other appropriate
reporting period with respect to which the reporting financial institution is
the obligor or debtor, including the aggregate amount of any redemption payments
made to the account holder during the calendar year or other appropriate
reporting period.
(2) The information reported must identify the currency
in which each amount is denominated.
(3) With respect to each reportable account that is a
preexisting account,
(a) notwithstanding paragraphs (1)(a) and (b), the TIN
or date of birth are not required to be reported if the TIN or date of birth (as
appropriate)
(i) are not in the records of the reporting financial
institution, and
(ii) are not otherwise required to be collected by the
reporting financial institution under the Act; and
(b) a reporting financial institution is required to use
reasonable efforts to obtain the TIN and date of birth with respect to a
preexisting account by the end of the second calendar year following the year in
which the preexisting account is identified as a reportable
account.
(4) Notwithstanding paragraphs (1)(a) and (b), a TIN of
a reportable person is not required to be reported if the relevant reportable
jurisdiction does not issue TINs.
General due diligence
rules
272 (1) An account is treated as a reportable account
beginning as of the date it is identified as a reportable account under the due
diligence procedures in sections 272 through 277.
(2) The balance or value of an account is determined on
the last day of the calendar year or other appropriate reporting
period.
(3) For the purpose of determining whether the balance
or value of an account exceeds a particular threshold on the last day of a
calendar year, the balance or value must be determined on the last day of the
last reporting period that ends on or before the end of the calendar
year.
(4) A reporting financial institution may use service
providers to fulfil its reporting and due diligence obligations imposed, but
these obligations shall remain the responsibility of the reporting financial
institution.
(5) A reporting financial institution may apply the due
diligence procedures for new accounts to preexisting accounts (with the other
rules for preexisting accounts continuing to apply).
(6) Every reporting financial institution shall
establish, maintain and document the due diligence procedures set out in
sections 272 through 277.
Due diligence for preexisting
individual accounts
273 (1) A preexisting individual account that is a cash
value insurance contract or an annuity contract is not required to be reviewed,
identified or reported, provided the reporting financial institution is
effectively prevented by law from selling those contracts to residents of a
reportable jurisdiction.
Lower value accounts
(2) The following review procedures apply with respect
to lower value accounts that are preexisting individual accounts:
(a) if the reporting financial institution has in its
records the address of the individual account holder’s current residence (in
this section, their “current residence address”) based on documentary evidence,
the reporting financial institution may treat the individual account holder as
being a resident for tax purposes of the jurisdiction in which the address is
located for purposes of determining whether the individual account holder is a
reportable person;
(b) if the reporting financial institution does not rely
on a current residence address for the individual account holder based on
documentary evidence as described in paragraph (a), the reporting financial
institution must review electronically searchable data maintained by the
reporting financial institution for any of the following indicia and apply
paragraphs (c) through (f):
(i) identification of the account holder as a resident
of a reportable jurisdiction,
(ii) current mailing or residence address (including post
office box) in a reportable jurisdiction,
(iii) one or more telephone numbers in a reportable
jurisdiction and no telephone number in the jurisdiction of the reporting
financial institution,
(iv) standing instructions (other than with respect to a
depository account) to transfer funds to an account maintained in a reportable
jurisdiction,
(v) currently effective power of attorney or signatory
authority granted to a person with an address in a reportable jurisdiction,
and
(vi) a hold mail instruction or in-care-of address in a
reportable jurisdiction if the reporting financial institution does not have any
other address on file for the account holder;
(c) if none of the indicia listed in paragraph (b) are
discovered in the electronic search, then no further review is required until
the earlier of
(i) a change in circumstances that results in one or
more of the indicia referred to in paragraph (b) being associated with the
account, or
(ii) the account becoming a high value
account;
(d) if any of the indicia listed in subparagraphs (b)(i)
to (v) are discovered in the electronic search or if there is a change in
circumstances that results in one or more of the indicia in paragraph (b) being
associated with the account, then the reporting financial institution must treat
the account holder as a resident for tax purposes of each reportable
jurisdiction for which an indicium is identified, unless one of the exceptions
in paragraph (f) applies with respect to that account;
(e) if a hold mail instruction or in-care-of address in
a reportable jurisdiction is discovered in the electronic search and no other
address and none of the other indicia listed in subparagraphs (b)(i) to (v) are
identified for the account holder, then
(i) the reporting financial institution must do one (if
the relevant information is obtained) or both (in the order most appropriate to
the circumstances) of the following:
(A) apply the paper record search described in paragraph
(3)(b), and
(B) seek to obtain from the account holder a
self-certification or documentary evidence to establish the residence for tax
purposes of the account holder, and
(ii) if the paper record search referred to in clause
(i)(A) fails to establish an indicium and the attempt to obtain the
self-certification or documentary evidence referred to in clause (i)(B) is not
successful, then the reporting financial institution must report the account as
an undocumented account;
(f) notwithstanding the discovery of indicia under
paragraph (b), a reporting financial institution is not required to treat an
account holder as a resident of a reportable jurisdiction if
(i) both
(A) the account holder information contains
(I) a current mailing or residence address in the
reportable jurisdiction,
(II) one or more telephone numbers in the reportable
jurisdiction (and no telephone number in the jurisdiction of the reporting
financial institution), or
(III) standing instructions (with respect to financial
accounts other than depository accounts) to transfer funds to an account
maintained in a reportable jurisdiction, and
(B) the reporting financial institution obtains, or has
previously reviewed and currently maintains a record of,
(I) a self-certification from the account holder of the
jurisdictions of residence of the account holder that does not include the
reportable jurisdiction, and
(II) documentary evidence establishing the account
holder’s non-reportable status in relation to that jurisdiction, or
(ii) both
(A) the account holder information contains a currently
effective power of attorney or signatory authority granted to a person with an
address in the reportable jurisdiction, and
(B) the reporting financial institution obtains, or has
previously reviewed and currently maintains a record of,
(I) a self-certification from the account holder of the
jurisdictions of residence of the account holder that does not include the
reportable jurisdiction, or
(II) documentary evidence establishing the account
holder’s non-reportable status in relation to that jurisdiction.
Enhanced review procedure – high
value accounts
(3) The following enhanced review procedures apply with
respect to high value accounts that are preexisting individual
accounts:
(a) the reporting financial institution must review
electronically searchable data maintained by the reporting financial institution
for any of the indicia described in paragraph (2)(b);
(b) subject to paragraph (c), the reporting financial
institution must review for any of the indicia described in paragraph
(2)(b)
(i) the current customer master file, and
(ii) the following documents associated with the account,
and obtained by the reporting financial institution within the last five years,
to the extent that they are not contained in the current customer master
file:
(A) the most recent documentary evidence collected with
respect to the account,
(B) the most recent account opening contract or
documentation,
(C) the most recent documentation obtained by the
reporting financial institution pursuant to AML/KYC procedures or for other
regulatory purposes,
(D) any power of attorney or signature authority forms
currently in effect, and
(E) any standing instructions (other than with respect
to a depository account) to transfer funds currently in effect;
(c) a reporting financial institution is not required to
perform the paper record search described in paragraph (b) to the extent that
the reporting financial institution’s electronically searchable information
includes the following:
(i) the account holder’s residence status,
(ii) the account holder’s residence address and mailing
address currently on file with the reporting financial institution,
(iii) the account holder’s telephone number currently on
file, if any, with the reporting financial institution,
(iv) in the case of financial accounts other than
depository accounts, whether there are standing instructions to transfer funds
in the account to another account (including an account at another branch of the
reporting financial institution or another financial institution),
(v) whether there is a current in-care-of address or
hold mail instruction for the account holder, and
(vi) whether there is any power of attorney or signatory
authority for the account;
(d) in addition to the electronic and paper record
searches described in paragraphs (a) to (c), the reporting financial institution
must treat as a reportable account any high value account assigned to a
relationship manager (including any financial accounts aggregated with that high
value account under section 277) if the relationship manager has actual
knowledge that the account holder is a reportable person;
(e) with respect to the enhanced review of high value
accounts described in paragraphs (a) to (d),
(i) if none of the indicia listed in paragraph (2)(b)
are discovered in the enhanced review and the account is not identified as being
held by a reportable person in paragraph (d), then further action is not
required until there is a change in circumstances that results in one or more
indicia being associated with the account,
(ii) if any of the indicia listed in subparagraphs
(2)(b)(i) through (v) are discovered in the enhanced review, or if there is a
subsequent change in circumstances that results in one or more indicia being
associated with the account, then the reporting financial institution must treat
the account as a reportable account with respect to each reportable jurisdiction
for which an indicium is identified unless one of the exceptions in paragraph
2(f) applies with respect to that account,
(iii) if a hold mail instruction or in care of address is
discovered in the enhanced review and no other address or other indicia listed
in (2)(b)(i) through (v) are identified for the account holder, then the
reporting financial institution must
(A) obtain from the account holder a self-certification
or documentary evidence to establish the residence for tax purposes of the
account holder, and
(B) if the reporting financial institution cannot obtain
a self-certification or documentary evidence, report the account as an
undocumented account;
(f) if a preexisting individual account is not a high
value account on June 30, 2017, but becomes a high value account as of the last
day of a subsequent calendar year,
(i) the reporting financial institution must complete
the enhanced review procedures described in this subsection with respect to the
account within the calendar year following the year in which the account becomes
a high value account, and
(ii) if the account is identified as a reportable account
based on the review in subparagraph (i), the reporting financial institution
must report the required information about the account with respect to the year
in which it is identified as a reportable account (and subsequent years on an
annual basis, unless the account holder ceases to be a reportable
person);
(g) if a reporting financial institution applies the
enhanced review procedures described in this subsection to a high value account
in a year, then the reporting financial institution is not required to re-apply
those procedures – other than the relationship manager inquiry described in
paragraph (d) – to the same high value account in any subsequent year unless the
account is undocumented, in which case the reporting financial institution must
re-apply them annually until the account ceases to be undocumented;
(h) if there is a change of circumstances with respect
to a high value account that results in one or more indicia described in
paragraph (2)(b) being associated with the account, then the reporting financial
institution must treat the account as a reportable account with respect to each
reportable jurisdiction for which an indicium is identified unless one of the
exceptions in paragraph (2)(f) applies with respect to that
account;
(i) a reporting financial institution must implement
procedures to ensure that a relationship manager identifies any change in
circumstances of an account.
Timing of review
(4) Each preexisting individual account must be reviewed
in accordance with subsection (2) or (3) before
(a) 2019, if the account is a high value account;
or
(b) 2020, if the account is a lower value
account.
Reportable preexisting individual
accounts
(5) Any preexisting individual account that has been
identified as a reportable account under this section must be treated as a
reportable account in all subsequent years, unless the account holder ceases to
be a reportable person.
Due diligence – new individual
accounts
274 (1) Upon opening a new individual account, the reporting
financial institution must obtain a self-certification (which may be a part of
the account opening documentation) that allows the reporting financial
institution to
(a) determine the account holder’s residence for tax
purposes; and
(b) confirm the reasonableness of the self-certification
taking into account information obtained by the reporting financial institution
in connection with the opening of the account, including any documentation
collected pursuant to the AML/KYC procedures.
(2) If the self-certification for a new individual
account establishes that the account holder is resident for tax purposes in a
reportable jurisdiction, then
(a) the reporting financial institution must treat the
account as a reportable account; and
(b) the self-certification must also include the account
holder’s TIN with respect to the reportable jurisdiction (subject to subsection
271(4)) and date of birth.
(3) If there is a change in circumstances with respect
to a new individual account that causes the reporting financial institution to
know, or have reason to know, that the original self-certification is incorrect
or unreliable, then the reporting financial institution
(a) cannot rely on the original self-certification;
and
(b) must obtain a valid self-certification that
establishes the residence for tax purposes of the account holder.
Due diligence – preexisting entity
accounts
275 (1) Unless the reporting financial institution elects
otherwise — either with respect to all preexisting entity accounts or,
separately, with respect to any clearly identified group of those accounts — a
preexisting entity account with an aggregate account balance or value that does
not exceed 250,000 USD on June 30, 2017 is not required to be reviewed,
identified or reported as a reportable account until the aggregate account
balance or value exceeds 250,000 USD on the last day of any subsequent calendar
year.
(2) The review procedures set forth in subsection (4)
apply to a preexisting entity account if it has an aggregate account balance or
value that exceeds 250,000 USD on
(a) June 30, 2017; or
(b) the last day of any subsequent calendar
year.
(3) With respect to preexisting entity accounts
described in subsection (2), the only accounts that shall be treated as
reportable accounts are accounts that are held by
(a) one or more entities that are reportable persons;
or
(b) passive NFEs with one or more controlling persons
who are reportable persons.
(4) If this subsection applies to a preexisting entity
account, a reporting financial institution must apply the following review
procedures to determine whether the account is held by one or more reportable
persons or by passive NFEs with one or more controlling persons who are
reportable persons:
(a) review information maintained for regulatory or
customer relationship purposes (including information collected pursuant to
AML/KYC procedures) to determine whether the information indicates that the
account holder is resident in a reportable jurisdiction, and if so, the
reporting financial institution must treat the account as a reportable account
unless it
(i) obtains a self-certification from the account holder
to establish that the account holder is not a reportable person, or
(ii) reasonably determines, based on information in its
possession or that is publicly available, that the account holder is not a
reportable person; and
(b) with respect to an account holder of a preexisting
account (including an entity that is a reportable person), the reporting
financial institution must determine whether the account holder is a passive NFE
with one or more controlling persons who are reportable persons, and for the
purposes of
(i) determining whether the account holder is a passive
NFE, the reporting financial institution must obtain a self-certification from
the account holder to establish its status, unless it has information in its
possession or information is publicly available, based on which it can
reasonably determine that the account holder is
(A) an active NFE, or
(B) a financial institution other than an entity
described in paragraph (b) of the definition investment
entity that is not a participating jurisdiction financial
institution,
(ii) determining the controlling persons of an account
holder, a reporting financial institution may rely on information collected and
maintained pursuant to AML/KYC procedures, and
(iii) determining whether a controlling person of a
passive NFE is a reportable person, a reporting financial institution may rely
on
(A) information collected and maintained pursuant to
AML/KYC procedures in the case of a preexisting entity account held by one or
more NFEs with an aggregate account balance or value that does not exceed 1
million USD, or
(B) a self-certification from the account holder or the
controlling person indicating the jurisdiction in which the controlling person
is resident for tax purposes.
Timing of review
(5) Each preexisting entity account must be reviewed in
accordance with subsection (4) before
(a) 2020, if the account has an aggregate account
balance or value that exceeds 250,000 USD on June 30, 2017; or
(b) the end of the calendar year following the year in
which the aggregate account balance or value exceeds 250,000 USD on December 31,
if paragraph (a) does not apply.
Change of
circumstances
(6) If there is a change of circumstances with respect
to a preexisting entity account that causes the reporting financial institution
to know, or have reason to know, that the self-certification or other
documentation associated with the account is incorrect or unreliable, the
reporting financial institution must re-determine the status of the account in
accordance with subsection (4).
Due diligence for new entity
accounts
276 (1) For new entity accounts, a reporting financial
institution must apply the following review procedures to determine whether the
account is held by one or more reportable persons or by passive NFEs with one or
more controlling persons who are reportable persons:
(a) the reporting financial institution
must
(i) obtain a self-certification (which may be part of
the account opening documentation) that allows the reporting financial
institution to determine the account holder’s residence for tax purposes and
confirm the reasonableness of the self-certification based on the information
obtained by the reporting financial institution in connection with the opening
of the account, including any documentation collected pursuant to AML/KYC
procedures, and
(ii) if the self-certification referred to in
subparagraph (i) indicates that the account holder is resident in a reportable
jurisdiction, treat the account as a reportable account unless it reasonably
determines, based on information in its possession or information that is
publicly available, that the account holder is not a reportable person with
respect to the reportable jurisdiction; and
(b) with respect to an account holder of a new entity
account (including an entity that is a reportable person), the reporting
financial institution must determine whether the account holder is a passive NFE
with one or more controlling persons who are reportable persons and if so, treat
the account as a reportable account, and for the purposes of
(i) determining whether the account holder is a passive
NFE, the reporting financial institution must obtain a self-certification from
the account holder to establish its status, unless it has information in its
possession or information is publicly available, based on which it can
reasonably determine that the account holder is
(A) an active NFE, or
(B) a financial institution other than an entity
that
(I) is an investment entity because of paragraph (b) of that
definition, and
(II) is not a participating jurisdiction financial
institution,
(ii) determining the controlling persons of an account
holder, a reporting financial institution may rely on information collected and
maintained pursuant to AML/KYC procedures, and
(iii) determining whether a controlling person of a
passive NFE is a reportable person, a reporting financial institution may rely
on a self-certification from the account holder or the controlling
person.
Special due diligence
rules
277 (1) A reporting financial institution may not rely on a
self-certification or documentary evidence if the reporting financial
institution knows or has reason to know that the self-certification or
documentary evidence is incorrect or unreliable.
(2) A reporting financial institution may presume that
an individual beneficiary (other than the owner) of a cash value insurance
contract or an annuity contract receiving a death benefit is not a reportable
person and may treat the financial account as other than a reportable account
unless it has actual knowledge, or reason to know, that the beneficiary is a
reportable person.
(3) For the purposes of
(a) determining the aggregate balance or value of
financial accounts held by an individual or entity,
(i) a reporting financial institution is required to
aggregate all financial accounts maintained by the reporting financial
institution, or by a related entity, but only to the extent that the reporting
financial institution’s computerized systems
(A) link the financial accounts by reference to a data
element such as a client number or TIN, and
(B) allow account balances or values to be aggregated,
and
(ii) each holder of a jointly held financial account
shall be attributed the entire balance or value of the jointly held financial
account; and
(b) determining the aggregate balance or value of
financial accounts held by an individual in order to determine whether a
financial account is a high value account, a reporting financial institution is
also required — in the case of any financial accounts that a relationship
manager knows, or has reason to know, are directly or indirectly owned,
controlled or established (other than in a fiduciary capacity) by the same
individual — to aggregate all such accounts.
Dealer accounts
(4) Subsection (5)
(a) applies to a reporting financial institution in
respect of a client name account maintained by the institution if
(i) property recorded in the account is also recorded in
a financial account (in this subsection and subsection (5) referred to as the
“related account”) maintained by a financial institution (in this subsection and
subsection (5) referred to as the “dealer”) that is authorized under provincial
legislation to engage in the business of dealing in securities or any other
financial instrument, or to provide portfolio management or investment advising
services, and
(ii) the dealer has advised the institution whether the
related account is a reportable account; and
(b) does not apply, despite paragraph (a), if it can
reasonably be concluded by the institution that the dealer has failed to comply
with its obligations under this Part.
Dealer accounts
(5) If this subsection applies to a reporting financial
institution in respect of a client name account,
(a) sections 272 to 276 do not apply to the institution
in respect of the account; and
(b) the institution shall rely on the determination of
the dealer in respect of the related account in determining whether the account
is a reportable account.
Group insurance and
annuities
(6) A reporting financial institution may treat a
financial account that is a member’s interest in a group cash value insurance
contract or group annuity contract as a financial account that is not a
reportable account until the day on which an amount becomes payable to the
employee, certificate holder or beneficiary, if the financial account meets the
following requirements:
(a) the group cash value insurance contract or group
annuity contract is issued to an employer and covers 25 or more employees or
certificate holders;
(b) the employees or certificate holders are entitled
to
(i) receive any contract value related to their
interest, and
(ii) to name beneficiaries for the benefit payable upon
the employee or certificate holder’s death; and
(c) the aggregate amount payable to any employee or
certificate holder or beneficiary does not exceed 1 million USD.
Reporting
278 (1) Every reporting financial institution shall file
with the Minister, before May 2 of each calendar year, an information return in
prescribed form relating to each reportable account maintained by the
institution at any time during the immediately preceding calendar year and after
June 30, 2017.
(2) The information return required under subsection (1)
shall be filed by way of electronic filing.
Record keeping
279 (1) Every reporting financial institution shall keep, at
the institution’s place of business or at such other place as may be designated
by the Minister, records that the institution obtains or creates for the purpose
of complying with this Part, including self-certifications and records of
documentary evidence.
Form of records
(2) Every reporting financial institution required by
this Part to keep records that does so electronically shall retain them in an
electronically readable format for the retention period referred to in
subsection (3).
Retention of records
(3) Every reporting financial institution that is
required to keep, obtain or create records under this Part shall retain those
records for a period of at least six years following
(a) in the case of a self-certification, the last day on
which a related financial account is open; and
(b) in any other case, the end of the last calendar year
in respect of which the record is relevant.
Anti-avoidance
280 If a person enters into an arrangement or engages in
a practice, the primary purpose of which can reasonably be considered to be to
avoid an obligation under this Part, the person is subject to the obligation as
if the person had not entered into the arrangement or engaged in the
practice.
(2) Subsection
(1) comes into force on July 1, 2017.
2. (1) The
Income Tax Regulations are amended by adding the following after section
9004:
Prescribed non-reporting financial
institution
9005 For the purposes of the definition non-reporting financial institution in subsection
270(1) of the Act, the following entities are prescribed:
(a) a labour-sponsored venture capital corporation as
prescribed in section 6701;
(b) a registered retirement savings plan;
(c) a registered retirement income fund;
(d) a pooled registered pension plan;
(e) a deferred profit sharing plan;
(f) a registered disability savings plan;
(g) a registered education savings plan;
(h) a registered pension plan; and
(i) a central cooperative credit society, as defined in
section 2 of the Cooperative Credit
Association Act and whose accounts are maintained for member financial
institutions.
Prescribed excluded
accounts
9006 For the purposes of the definition excluded account in subsection 270(1) of the Act,
the following accounts are prescribed:
(a) a registered retirement savings plan;
(b) a registered retirement income fund;
(c) a pooled registered pension plans;
(d) a registered pension plan;
(e) a registered disability savings plan;
(f) a registered education savings plan;
(g) a deferred profit sharing plan;
(h) a net income stabilization account, including a NISA
Fund No. 2;
(i) an eligible funeral arrangement; and
(j) a dormant account.
(2) Subsection
(1) comes into force on July 1, 2017.
Report a problem on this page
- Date modified: