On July 29, 2016, the Department of Finance Canada released for
public comment a package of draft legislative proposals and
explanatory notes relating to a number of measures
announced in the 2016 federal budget, which included, amongst other
proposals, the introduction of a Common Reporting Standard penalty
and relating consequential amendments to the Income
Tax Act (the ITA).
Specifically, the proposed amendments will incorporate new
section 281 into the ITA and will require that a "reportable
person" must provide its taxpayer identification number, or
"TIN" (the number used by the Minister of National
Revenue to identify an individual or entity), to any person
required to make an information return under the Common Reporting
Standard (CRS) to be implemented in Canada as of July 1, 2017. This
section also empowers the Minister of National Revenue to assess a
$500 penalty against any reportable person for each
failure to provide its TIN upon request.
For CRS purposes, the term "reportable person"
generally refers to a natural person or entity that is resident in
a reportable jurisdiction (excluding Canada and the United States)
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, other
than: (i) a corporation the stock of which is regularly traded on
one or more established securities markets; (ii) any corporation
that is a related entity of a corporation described in clause (i);
(iii) a governmental entity; (iv) an international organization;
(v) a central bank; or (vi) a financial institution. See
definitional subsection ITA 270 (1).
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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