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Do you know the world is officially a global village?

on Tue, 08/01/2017 - 10:23

Effective July 1, 2017, Common Reporting Standard (CRS) was implemented in Canada under Part XIX of the Canadian Income Tax Act. CRS was developed by the Organization for Economic Co-operation and Development (OECD), with support of Canada and other G20 countries to combat global tax evasion and improve tax compliance. In another words, it is going to be harder and harder to try to avoid paying tax, no matter where you go in the world (except if you live in the third world countries).

What does that really means and what was changed?
All financial institutions are now required to collect and review customers’ information to determine its reporting requirement to Canada Revenue Agency (CRA). CRA may, in turn, share the information with participating countries.

How is CRS different from the Foreign Account Tax Compliance Act (FATCA)?
CRS is an extension of FATCA that requires financial institutions to report information to CRA about certain accounts held by persons who are resident for tax purposes in a country other than Canada and the United States. Although the concept is similar, the application can be different. CRS does not replace FATCA.

How does it affect everyone?
Financial institutions have new forms to reflect their need to collect new information regarding customers' tax residency and the entity’s classification. This requirement applies to all life insurance policies with cash value, non-registered annuity contracts (including segregated funds contract) and investment contracts based on different circustances. Clients who "feel uncomfortable" disclose their financial details will feel they are being invaded, and there is no way around it - maybe the only way is to keep your money under your pillow...

We have to understand these are regulations we all follow when the governments are trying to track down certain people not doing the right thing in the world, and that's probbaly the scarifies we all have to deal with...

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