Those of us who have recently had the occasion to open an account with a
financial institution are well-acquainted with the stack of paperwork and
identity and other information now required. All part of the larger global
agenda they say to combat tax evasion.
Such is also the stated purpose of the Common Reporting Standard (CRS) – to
fight tax evasion by creating a common information standard for the
automatic exchange of tax and financial information, which was developed by
the Organization for Economic Co-operation and Development (OECD) in 2014.
Prior to CRS’s implementation, information was exchanged not automatically
and systematically between governments, but instead by treaty on an ad hoc basis by request from one country to another.
All European Union (EU) countries, and in total 109 countries have now
signed on to CRS, with the glaring exception of the U.S. Canada is a “late
adopter,” and along with many other countries will start reporting in 2018,
while EU and many Caribbean countries as well as the U.K are “early
adopters” and will start reporting this month.
Information that must be reported includes names of individuals, addresses,
tax identification numbers, names of banks and account numbers, account
balances, interest and dividends received, and proceeds from sale of
financial assets in respect of individual and certain entities. Banks,
insurance companies, custodians, brokers, fund managers, and others must
The rules with respect to how CRS applies to trustees and trusts are
complex, in particular with regard to discretionary trusts. Helpful
guidance has been provided to practitioners by the Society of Trust and
Estate Practitioners (STEP) in
“Guidance Note: CRS and Trusts,” March 8, 2017 available on the
Of concern as we veer on the brink of this great deluge of information
among governments worldwide is, of course, confidentiality. How confident
can we be that information provided to government will remain confidential,
in particular in those countries where the rule of law is weak or may not
even exist, which have high levels of corruption, or where taxpayer’s
rights are held in low regard and not protected? And what about
cybersecurity and the technological challenge of protecting sensitive
As we move forward with CRS, and as the world with this step truly does
become even more global, it is indeed a brave new world. And perhaps a
wake-up call from complacency on personal privacy issues. The ramifications
of the vast amount of sensitive financial information soon to flow are
daunting and even unfathomable.
Peace, order, and good government are the Canadian motto, which we extol,
and with confidence we can say we do live by in relative terms to other
And with that thought, a good long weekend to all of our readers and time
to relax and reflect on our good fortune on this special birthday.
Happy Canada Day!
Margaret O’Sullivan is the principal of the Toronto-based trusts and estates law firm
O’Sullivan Estate Lawyers. She practices exclusively in the areas of estate planning, estate
litigation, advising executors, trustees and beneficiaries, and
administration of trusts and estates. This article originally appeared
O’Sullivan Estate Lawyers blog. Reprinted with permission.
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