Canada, Switzerland to share financial account information

Feds move forward to address tax evasion through the automatic exchange of tax information

By: James Langton
February 5, 2016 December 19, 2017
10:20

The Canadian government announced on Friday it has signed a pledge with Switzerland that will see the two countries automatically share financial account information by 2018.

The joint declaration with Switzerland will see the countries engage in the “automatic exchange of financial account information,” according to standards developed by the Organization for Economic Co-operation and Development (OECD).

“The introduction of the Common Reporting Standard is an important global development, which will help countries improve the integrity of their tax systems. Canada intends to implement the standard, consistent with our commitment to the G20 and similar commitments by more than 90 other jurisdictions. Ensuring payment of taxes owed is a basic principle of tax fairness and fiscal responsibility,” says Finance Minister Bill Morneau, in a statement.

The arrangement will “improve Canada’s ability to detect and address cases of tax evasion, ensure tax compliance and protect the integrity of Canada’s tax system,” the Department of Finance says in a release.

The Canadian government indicates that it intends to implement the arrangement starting on July 1, 2017; and that information sharing would begin in 2018. Draft legislative proposals will be released “in the near future,” the Finance Dept. says.

The G20 agreed to the automatic exchange of information between tax authorities as a new global standard back in 2013. In November 2015, the group reaffirmed their commitment to adopting these arrangements by 2017 or 2018.

The information sharing arrangements will require financial institutions to identify accounts held by non-residents, and to report certain information about these accounts to domestic tax authorities. Domestic authorities will then share information with the tax authorities of other jurisdictions.

Once implemented, Canadian financial institutions “will be expected to have procedures in place to identify accounts held by non-residents and to report the required information to the Canada Revenue Agency (CRA),” the Finance Dept. says. The CRA will then share this information with Swiss tax authorities.