On January 9, 2014, the Government of Canada announced draft
legislative proposals (Proposals) that would require financial
institutions, money services businesses and casinos subject to the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(PC Act) to report to the Canada Revenue Agency (CRA) international
electronic funds transfers (EFTs) of C$10,000 or more sent or
received at the request of a client. The proposed new reporting
obligations are aimed at combatting international tax evasion and
are in addition to the reporting requirements under the PC Act.
If enacted into legislation, the Proposals will require these
businesses and institutions which are already subject to the PC
Act, to file with the Minister of National Revenue information
returns in respect of international EFTs of C$10,000 or more,
in addition to the EFT reports these regulated entities
are already required to submit to the Financial Transactions and
Reports Analysis Centre of Canada (FINTRAC) under the authority of
the PC Act.
While regulated entities are required to report EFTs to FINTRAC,
the CRA's ability to access these reports is limited by the
information-sharing provisions of the PC Act.
CRA'S PROPOSED NEW POWERS
The Proposals contemplate amendments to the Excise Tax
Act, the Excise Act, 2001 and the Air Travellers
Security Charge Act to enable the CRA to use reported
international EFT information for the administration of all or
certain parts of these Acts.
The requirement to file information reports in respect of
international EFTs under the Proposals mirrors the EFT reporting
obligations under the PC Act. However, we would expect that the CRA
reporting for international EFTs will be required to be submitted
through a new reporting platform, which may require additional
operational changes and can result in additional expenses for these
The implementation of the Proposals will also require that new
regulations be introduced setting out the details of the proposed
legislative changes. No draft regulations have so far been released
for public consultation. It is anticipated that the Proposals will
become effective on January 1, 2015.
The closing date for comments is February 10, 2014. Comments on
the proposals can be submitted to the Department of Finance at
IEFT-TI@fin.gc.ca or to the address below. Regulated entities that
are concerned with these additional and duplicative reporting
requirements should consider providing comments.
Tax Policy Branch
Department of Finance
140 O'Connor Street
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