Canada and Switzerland Agree to Jointly Fight Tax Evasion

On February 5, the Finance Minister announced that Canada and Switzerland have signed a Joint Declaration which will see the two countries exchange financial account information automatically. With this agreement, CRA expects to curb tax evasion by Canadian residents who earn income in Switzerland but do not report it on their Canadian tax returns.

This exchange of information is in accordance with the Common Reporting Standard (CRS) developed by the Organisation for Economic Co-operation and Development.  G-20 leaders endorsed the CRS in September 2013.  To date over 90 jurisdictions have agreed to implement this exchange of information.  It is Canada’s intention to implement the CRS stating July 1, 2017.  This will allow the first exchange of information in 2018.

As of July 1, 2017, Canadian financial institutions must have procedures in place to identify accounts held by non-residents and to report the required information to CRA.  Draft legislation to implement the CRS has yet to be released but is expected shortly.

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