Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m J U N E 2 0 1 7 39 tarting July 1, the Canada Rev- enue Agency will be receiving information on residents' off- shore accounts of any amount. As financial institutions worldwide march toward global transparency, Canada has signed on to the Common Reporting Standard Multilateral Competent Authority Agreement, or CRS MCAA. With more than 100 coun- tries on board, the CRS is a disclosure mechanism between countries around the world, fostering an exchange of informa- tion on accounts held in foreign jurisdic- tions — and making it easier to discern which accounts are not being disclosed in the account holders' home countries. The CRA will in turn remit informa- tion on non-residents' accounts held in Canada to the tax authority of the home country pertaining to the account holder if such home country is also a signatory to the CRS. The list includes countries such as Colombia, India, Brazil, Estonia, the Cay- man Islands, Switzerland, Norway and New Zealand, and there is no lower limit for account balances — accounts of any size will be reported. "Now the CRA doesn't have to wait for a hacker or for people to come in with a briefcase full of papers," says Sunita Doobay, a cross-border U.S. and Canadian tax partner at Tax Chambers LLP in Toron- to, referring to the Panama Papers leaked documents on offshore entities in 2015. "It can just sit back and exchange information with the world." Doobay calls the CRS "comprehensive" and says that, in her opinion, it will encour- age the CRA to look closer at the taxpayer. Barry Horne, partner and co-chairman of the cross-border group at McInnes Coo- per LLP in Halifax, says he's not surprised Canada signed on, noting the trend toward greater transparency started after the eco- nomic crash in 2008. The world is becom- ing more open, he says. In response to the factors behind the global recession, the Organization for Economic Cooperation and Development developed a project to combat some of them. The Base Erosion and Profit Shifting project started in 2012 and is supported by the G20. "We need greater disclosure so people can't hide," he says. "So people know the facts and administrators know the facts; this is why we came up with the CRS and the ability for countries to automati- cally exchange information. A country no longer has to ask — they're going to get it automatically." The CRS will impact Canadians who have funds outside of Canada but have failed to disclose this to the CRA. With a large part of Canadian society made up of immigrants, especially recent immigrants who still have connections to their home country, many might still have financial accounts there as some of these countries offer a more attractive deposit interest rate at the local financial institu- tions. L E G A L R E P O RT \ TA X PETE RYAN Full disclosure Offshore accounts will soon be much easier to track for Canadian authorities as a new treaty comes into effect By Mallory Hendry S

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