On April 15, 2016, the federal Department of Finance released draft legislative proposals to amend the Income Tax Act (“ITA”) and Income Tax Regulations (“Regulations”). The draft proposals are designed to “implement the [Organisation for Economic Co-operation and Development’s (“OECD”)] Common Reporting Standard (CRS), which will ensure tax fairness and improve Canada’s ability to detect and address tax evasion.”
The draft proposals were accompanied by explanatory notes, which clarify that the changes to the ITA and Regulations to implement the CRS, namely the addition of Part XIX to the ITA, will introduce “rules that require financial institutions to report certain information to the Canada Revenue Agency and to follow due diligence procedures as set out in” Part XIX and will come into force July 1, 2017. The public has until July 15, 2016 to provide the Department of Finance with feedback on the proposed amendments to the ITA and Regulations.
Stay tuned for our analysis of the draft legislation and its potential impact on registered charities and non-profit organizations in the June 2016 Charity & NFP Law Update.