With the upcoming implementation of the Organisation for Economic Co-operation and Development (OECD) Common Reporting Standard (CRS) by the Canadian Department of Finance, there are several considerations and key deadlines that may be relevant to your organization. Please note that the following does not constitute tax, legal, or compliance advice, and clients are encouraged to consult with their legal, compliance and tax advisors for specific guidance. In follow-up to our June 2016 paper, “Upcoming Regulatory Changes – 871(m) and the Common Reporting Standard,” this communication provides updated information on the CRS. By way of background, the CRS is intended to be a global standard for the exchange of financial account information, including disclosure of income earned by non-resident individuals and organizations. The purpose of the CRS is to address tax evasion, improve international tax compliance, encourage international tax cooperation, and help governments protect the integrity of their tax systems.
The Government of Canada intends to implement the CRS beginning on July 1, 2017 with the first inter-jurisdictional exchange of information with other tax jurisdictions taking place in 2018. Canada’s Department of Finance notes that as of July 1, 2017, Canadian financial institutions (FIs) will be required to have new account opening procedures in place to identify accounts held by non-residents and will be required to report certain information to the Canada Revenue Agency (CRA).
Update to the Legislative Landscape
The CRA has posted its final guidance on the CRS, as well as self-certification forms on its website. With respect to the final guidance on the CRS, some relevant areas for Canadian financial institutions to pay particular attention to include: Retirement Compensation Arrangements (RCAs), new accounts and closed accounts, Business Number (BN) vs Global Intermediary Identification Number (GIIN), sponsoring entity versus agent, the filing due date, and Foreign Tax Identification Number (TIN).
CIBC Mellon’s CRS Status
As a Canadian financial institution, CIBC Mellon will be required to take action to implement the provisions of the CRS which are applicable to it, as set out by the CRA. CIBC Mellon will be complying with CRS standards and relevant regulatory requirements. It is the responsibility of CIBC Mellon, as a Canadian FI, to complete diligence requirements on each of its account holders for whom it provides custody services, and to identify any reportable accounts to the CRA on an annual basis.
CIBC Mellon does not have a regulatory responsibility to comply with CRS regulations with respect to unitholders of financial institutions for whom CIBC Mellon provides recordkeeping services, in its role as an agent. CIBC Mellon, however, will offer a recordkeeping reporting service offering, similar to its current offering for Foreign Account Tax Compliance Act (FATCA) related purposes, including the collection of new account opening information, and annual reporting to the CRA.
This article is provided for general information purposes only and CIBC Mellon and its affiliates make no representations or warranties as to its accuracy or completeness, nor do any of them take any responsibility for third parties to which reference may be made. This article should not be regarded as legal, accounting, investment, financial or other professional advice nor is it intended for such use.
About CIBC Mellon
CIBC Mellon is a Canadian company exclusively focused on the investment servicing needs of Canadian institutional investors and international institutional investors into Canada. Founded in 1996, CIBC Mellon is 50-50 jointly owned by The Bank of New York Mellon (BNY Mellon) and Canadian Imperial Bank of Commerce (CIBC). CIBC Mellon's investment servicing solutions for institutions and corporations are provided in close collaboration with our parent companies, and include custody, multicurrency accounting, fund administration, recordkeeping, pension services, exchange-traded fund services, securities lending services, foreign exchange processing and settlement, and treasury services.
As at June 30, 2022, CIBC Mellon had more than C$2.3 trillion of assets under administration on behalf of banks, pension funds, investment funds, corporations, governments, insurance companies, foreign insurance trusts, foundations and global financial institutions whose clients invest in Canada. CIBC Mellon is part of the BNY Mellon network, which as at June 30, 2022 had US$43.0 trillion in assets under custody and/or administration. CIBC Mellon is a licensed user of the CIBC trade-mark and certain BNY Mellon trade-marks, is the corporate brand of CIBC Mellon Global Securities Services Company and CIBC Mellon Trust Company, and may be used as a generic term to refer to either or both companies.
For more information – including CIBC Mellon's latest knowledge leadership on issues relevant to institutional investors active in Canada – visit www.cibcmellon.com or follow us on Twitter @CIBCMellon.