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Canada, Switzerland Sign AEOI Agreement

by Mike Godfrey,, Washington

10 February 2016

Canada and Switzerland have signed a joint declaration on the introduction of an automatic exchange of financial account information (AEOI) regime from 2018.

The declaration was signed in Ottawa by Canada's Revenue Minister Diane Lebouthillier and Swiss Ambassador Beat Nobs. The two countries intend to begin collecting data in 2017, in accordance with the Common Reporting Standard (CRS) developed by the Organisation for Economic Cooperation and Development (OECD). The first exchanges of information are expected to take place in 2018.

The Canadian Finance Department explained that the CRS will require financial institutions to implement due diligence procedures to identify accounts held by non-residents and report certain information relating to these accounts to domestic tax authorities. Tax authorities will then exchange information relating to financial accounts in their jurisdictions held by residents of the other jurisdiction. The CRS will not require reporting on accounts held by residents with foreign citizenship.

Canadian Finance Minister Bill Morneau said: "The introduction of the Common Reporting Standard is an important global development, which will help countries improve the integrity of their tax systems. Canada intends to implement the standard, consistent with our commitment to the G20 and similar commitments by more than 90 other jurisdictions. Ensuring payment of taxes owed is a basic principle of tax fairness and fiscal responsibility."

Lebouthillier added: "I am pleased that the CRS has widespread support and that a large number of committed jurisdictions have signed the Multilateral Competent Authority Agreement [on the Automatic Exchange of Financial Account Information] (MCAA). I am also pleased that the Joint Declaration has brought Canada and Switzerland a step closer to being able to rely on the MCAA to assist tax administration in both countries."

Switzerland has signed similar declarations with the European Union, Australia, Jersey, Guernsey, the Isle of Man, Iceland, Norway, and Japan. The Swiss Federal Council has authorized the Federal Department of Finance to initiate a consultation on the AEOI with Canada, after which the corresponding federal decrees will be submitted to Parliament for approval.

TAGS: Isle of Man | compliance | tax | tax compliance | Iceland | tax avoidance | Australia | Guernsey | Jersey | Norway | ministry of finance | tax authority | Canada | Switzerland | G20 | European Union (EU) | Japan | Europe | BEPS

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