Canada is in continued negotiation with foreign countries to enter into or amend Tax Information Exchange Agreements and Tax Treaties with exchange-of-information provisions to permit, and in some cases require, the sharing of information between Canada and foreign jurisdictions for purposes of verifying tax compliance.
In this connection, the Canada-United States Enhanced Tax Information Exchange Agreement was brought into law in Canada as of June 27, 2014 and, among other things, requires the U.S. to provide the Canada Revenue Agency (CRA) with information on Canadian residents who hold accounts at U.S. financial institutions.
In November 2014, Canada and the other G-20 countries endorsed a new common reporting standard for automatic information exchange developed by the OECD. Under the new standard, participating foreign tax authorities will provide information to the CRA relating to financial accounts in their jurisdictions held by Canadian residents, and the CRA will provide corresponding information to such foreign tax authorities on accounts in Canada held by residents of their jurisdictions. The new standard will require financial institutions in participating countries to implement due diligence procedures (to the extent that they are not already in place) to identify accounts held by non-residents and report certain information relating to these accounts to the applicable tax authority.
Following through on its international commitments, Budget 2015 indicated that the Canadian government intends to implement the common reporting standard starting on July 1, 2017, allowing a first exchange of information in 2018. The Budget indicated that draft legislative proposals will be released for comment in the coming months.