Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Marginal note:Reporting  — U.S. reportable accounts

• 266 (1) Every reporting Canadian financial institution shall file with the Minister, before May 2 of each calendar year, an information return in prescribed form relating to each U.S. reportable account maintained by the institution at any time during the immediately preceding calendar year and after June 29, 2014.

• Marginal note:Reporting  — nonparticipating financial institutions

  (2) Every reporting Canadian financial institution shall file with the Minister, before May 2 of each calendar year, an information return in prescribed form relating to payments, to a nonparticipating financial institution that is the holder of a financial account maintained by the reporting Canadian financial institution, during the immediately preceding calendar year if the immediately preceding year is 2015 or 2016.

• Marginal note:Filing of return

  (3) An information return required under subsection (1) or (2) shall be filed by way of electronic filing.

Marginal note:Record keeping

• 267 (1) Every reporting Canadian financial institution shall keep, at the institution’s place of business or at such other place as may be designated by the Minister, records that the institution obtains or creates for the purpose of complying with this Part, including self-certifications and records of documentary evidence.

• Marginal note:Form of records

  (2) Every reporting Canadian financial institution required by this Part to keep records that does so electronically shall retain them in an electronically readable format for the retention period referred to in subsection (3).

• Marginal note:Retention of records

  (3) Every reporting Canadian financial institution that is required to keep, obtain, or create records under this Part shall retain those records for a period of at least six years following

  • (a) in the case of a self-certification, the last day on which a related financial account is open; and

  • (b) in any other case, the end of the last calendar year in respect of which the record is relevant.

Marginal note:Anti-avoidance

268 If a person enters into an arrangement or engages in a practice, the primary purpose of which can reasonably be considered to be to avoid an obligation under this Part, the person is subject to the obligation as if the person had not entered into the arrangement or engaged in the practice.

Marginal note:Deemed-compliant FFI

269 If a Canadian financial institution makes a reasonable determination that it is to be treated as a deemed-compliant FFI under Annex II to the agreement, this Part applies to the institution, with such modifications as the circumstances require, to the extent that the agreement imposes due diligence and reporting obligations on the institution.

PART XIXCommon Reporting Standard

Marginal note:Definitions

• 270 (1) The following definitions apply in this Part.

  account holder

  account holder means

  • (a) the person listed or identified as the holder of a financial account by the financial institution that maintains the account, other than a person (other than a financial institution) holding a financial account for the benefit of, or on behalf of, another person as agent, custodian, nominee, signatory, investment advisor or intermediary; and

  • (b) in the case of a cash value insurance contract or an annuity contract,

    • (i) any person entitled to access the cash value or change the beneficiary,

    • (ii) if no person can access the cash value or change the beneficiary,

      • (A) any person named as the owner in the contract, and

      • (B) any person with a vested entitlement to payment under the terms of the contract, and

    • (iii) upon maturity of the cash value insurance contract or annuity contract, each person entitled to receive a payment under the contract. (titulaire de compte)

  active NFE

  active NFE means, at any time, a non-financial entity that meets any of the following criteria:

  • (a) less than 50% of the NFE’s gross income for the preceding fiscal period is passive income and less than 50% of the assets held by the NFE during the preceding fiscal period are assets that produce or are held for the production of passive income;

  • (b) either

    • (i) interests in the NFE are regularly traded on an established securities market, or

    • (ii) the NFE is a related entity of an entity interests in which are regularly traded on an established securities market;

  • (c) the NFE is

    • (i) a governmental entity,

    • (ii) an international organization,

    • (iii) a central bank, or

    • (iv) an entity wholly owned by one or more entities described in subparagraphs (i) to (iii);

  • (d) both

    • (i) all or substantially all of the activities of the NFE consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more of its subsidiaries that engage in trades or businesses other than the business of a financial institution, and

    • (ii) the NFE does not function as (and is not represented or promoted to the public as) an investment fund, including

      • (A) a private equity fund,

      • (B) a venture capital fund,

      • (C) a leveraged buyout fund, and

      • (D) an investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes;

  • (e) the NFE

    • (i) is not yet operating a business,

    • (ii) has no prior operating history,

    • (iii) is investing capital into assets with the intent to operate a business other than that of a financial institution, and

    • (iv) was initially organized no more than 24 months prior to that time;

  • (f) the NFE has not been a financial institution in any of the past five years and is in the process of liquidating its assets or is reorganizing with the intent to continue or recommence operations in a business other than that of a financial institution;

  • (g) the NFE primarily engages in financing and hedging transactions with, or for, related entities that are not financial institutions, and does not provide financing or hedging services to any entity that is not a related entity, provided that the group of those related entities is primarily engaged in a business other than that of a financial institution; and

  • (h) the NFE meets all of the following requirements:

    • (i) it

      • (A) is established and operated in its jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic or educational purposes, or

      • (B) is established and operated in its jurisdiction of residence and it is a professional organization, business league, chamber of commerce, labour organization, agricultural or horticultural organization, civic league or an organization operated exclusively for the promotion of social welfare,

    • (ii) it is exempt from income tax in its jurisdiction of residence,

    • (iii) it has no shareholders or members who have a proprietary or beneficial interest in its income or assets,

    • (iv) the applicable laws of the NFE’s jurisdiction of residence or the NFE’s formation documents do not permit any income or assets of the NFE to be distributed to, or applied for the benefit of, a private person or non-charitable entity other than pursuant to the conduct of the NFE’s charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property which the NFE has purchased, and

    • (v) the applicable laws of the NFE’s jurisdiction of residence or the NFE’s formation documents require that, upon the NFE’s liquidation or dissolution, all of its assets be distributed to a governmental entity or other non-profit organization, or escheat to the government of the NFE’s jurisdiction of residence or any political subdivision thereof. (ENF active)

  annuity contract

  annuity contract means a contract under which the issuer agrees to make payments for a period of time determined in whole or in part by reference to the life expectancy of one or more individuals and includes a contract

  • (a) that is considered to be an annuity contract in accordance with the law, regulation or practice of the jurisdiction in which the contract was issued; and

  • (b) under which the issuer agrees to make payments for a term of years. (contrat de rente)

  anti-money laundering and know your customer procedures

  anti-money laundering and know your customer procedures or AML/KYC procedures means the record keeping, verification of identity, reporting of suspicious transactions and registration requirements required of a reporting financial institution under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. (procédures de connaissance de la clientèle et de lutte contre le blanchiment d’argent ou procédures AML/KYC)

  broad participation retirement fund

  broad participation retirement fund means a fund that is established to provide retirement, disability or death benefits to beneficiaries that are current or former employees (or persons designated by those employees) of one or more employers in consideration for services rendered, if the fund

  • (a) does not have a single beneficiary with a right to more than 5% of the fund’s assets;

  • (b) is subject to government regulation and provides information reporting to the Minister; and

  • (c) satisfies at least one of the following requirements:

    • (i) the fund is generally exempt from tax on investment income, or taxation of investment income is deferred or taxed at a reduced rate, due to its status as a retirement or pension plan,

    • (ii) the fund receives at least 50% of its total contributions (other than transfers of assets from broad participation retirement funds, narrow participation retirement funds or from retirement and pension accounts described in paragraph (a) of the definition excluded account) from the sponsoring employers,

    • (iii) distributions or withdrawals from the fund are

      • (A) allowed only upon the occurrence of specified events related to retirement, disability or death (except rollover distributions to broad participation retirement funds, narrow participation retirement funds and pension funds of a governmental entity, international organization or central bank or retirement and pension accounts described in paragraph (a) of the definition excluded account), or

      • (B) subject to penalties if they are made before such specified events, and

    • (iv) contributions (other than permitted make-up contributions) by an employee to the fund

      • (A) are limited by reference to the employee’s remuneration, or

      • (B) must not exceed 50,000 USD annually, applying the rules set forth in subsection 277(3). (fonds de retraite à large participation)

  Canadian financial institution

  Canadian financial institution means a financial institution that is

  • (a) either

    • (i) resident in Canada, but excluding any branch of the financial institution that is located outside Canada, or

    • (ii) a branch of a financial institution that is not resident in Canada, if the branch is located in Canada; and

  • (b) a listed financial institution as defined in subsection 263(1). (institution financière canadienne)

  cash value

  cash value, in respect of a contract held by a policyholder, means the greater of the amount that the policyholder is entitled to receive upon surrender or termination of the contract (determined without reduction for any surrender charge or policy loan) and the amount the policyholder can borrow under or with regard to the contract, but does not include an amount payable under an insurance contract

  • (a) solely by reason of the death of an individual insured under a life insurance contract;

  • (b) as a personal injury or sickness benefit, or other benefit, providing indemnification of an economic loss incurred upon the occurrence of an event insured against;

  • (c) as a refund of a previously paid premium (less any cost of insurance charges whether or not actually imposed) under an insurance contract (other than an investment-linked life insurance or annuity contract) due to the cancellation or termination of the contract, a decrease in risk exposure during the effective period of the contract or arising from the correction of a posting or similar error with regard to the premium for the contract;

  • (d) as a policyholder dividend (other than a termination dividend) if the dividend relates to an insurance contract under which the only benefits payable are described in paragraph (b); or

  • (e) as a return of an advance premium or premium deposit for an insurance contract for which the premium is payable at least annually, if the amount of the advance premium or premium deposit does not exceed the next annual premium that will be payable under the contract. (valeur de rachat)

  cash value insurance contract

  cash value insurance contract means an insurance contract (other than an indemnity reinsurance contract between two insurance companies) that has a cash value. (contrat d’assurance avec valeur de rachat)

  central bank

  central bank means an institution that is, by law or government sanction, the principal authority, other than the government of the jurisdiction itself, issuing instruments intended to circulate as currency and may include an instrumentality that is separate from the government of the jurisdiction, whether or not owned in whole or in part by the jurisdiction. (banque centrale)

  controlling persons

  controlling persons, in respect of an entity, means the natural persons who exercise control over the entity (interpreted in a manner consistent with the Financial Action Task Force Recommendations — International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation, adopted in February 2012 and as amended from time to time) and includes

  • (a) in the case of a trust,

    • (i) its settlors,

    • (ii) its trustees,

    • (iii) its protectors (if any),

    • (iv) its beneficiaries (for this purpose, a discretionary beneficiary of a trust will only be considered a beneficiary of the trust in a calendar year if a distribution has been paid or made payable to the discretionary beneficiary in the calendar year), and

    • (v) any other natural persons exercising ultimate effective control over the trust; and

  • (b) in the case of a legal arrangement other than a trust, persons in equivalent or similar positions to those described in paragraph (a). (personnes détenant le contrôle)

  custodial account

  custodial account means an account (other than an insurance contract or annuity contract) that holds one or more financial assets for the benefit of another person. (compte de dépositaire)

  custodial institution

  custodial institution means an entity, if the entity’s gross income attributable to the holding of financial assets for the account of others and related financial services equals or exceeds 20% of the entity’s gross income during the shorter of

  • (a) the three-year period that ends at the end of the entity’s last fiscal period, and

  • (b) the period during which the entity has been in existence. (établissement de garde de valeurs)

  depository account

  depository account includes

  • (a) any commercial, chequing, savings, time or thrift account, or an account that is evidenced by a certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness or other similar instrument maintained by a financial institution in the ordinary course of a banking or similar business; and

  • (b) an amount held by an insurance company under a guaranteed investment contract or similar agreement to pay or credit interest on the contract. (compte de dépôt)

  depository institution

  depository institution means any entity that accepts deposits in the ordinary course of a banking or similar business. (établissement de dépôt)

  documentary evidence

  documentary evidence includes

  • (a) a certificate of residence issued by an authorized government body (such as a government or agency thereof, or a municipality) of the jurisdiction in which the payee claims to be a resident;

  • (b) with respect to an individual (other than a trust), any valid identification issued by an authorized government body that includes the individual’s name and is typically used for identification purposes;

  • (c) with respect to an entity, any official documentation issued by an authorized government body that includes the name of the entity and either the address of its principal office in the jurisdiction in which it claims to be resident or the jurisdiction in which the entity was incorporated or organized; and

  • (d) any audited financial statement, third-party credit report, bankruptcy filing or securities regulator’s report. (preuve documentaire)

  entity

  entity means a person (other than a natural person) or a legal arrangement, such as a corporation, partnership, trust or foundation. (entité)

  equity or debt interest

  equity or debt interest includes, in the case of a partnership that is a financial institution, either a capital or profits interest in the partnership. (titre de participation ou d’intérêt)

  established securities market

  established securities market means an exchange that

  • (a) is officially recognized and supervised by a governmental authority in which the market is located; and

  • (b) has an annual value of shares traded on the exchange (or a predecessor exchange) exceeding one billion USD during each of the three calendar years immediately preceding the calendar year in which the determination is being made. For this purpose, if an exchange has more than one tier of market level on which stock may be separately listed or traded, each of those tiers must be treated as a separate exchange. (marché boursier réglementé)

  excluded account

  excluded account means

  • (a) a retirement or pension account that satisfies the following requirements:

    • (i) the account is

      • (A) subject to regulation as a personal retirement account, or

      • (B) part of a registered or regulated retirement or pension plan for the provision of retirement or pension benefits (including disability or death benefits),

    • (ii) the account is tax-favoured in that

      • (A) contributions to the account that would otherwise be subject to tax are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or

      • (B) taxation of investment income within the account is deferred or investment income within the account is taxed at a reduced rate,

    • (iii) information reporting to the Minister is required with respect to the account,

    • (iv) withdrawals are

      • (A) conditioned on reaching a specified retirement age, disability or death, or

      • (B) subject to penalties if made before the events specified in clause (A), and

    • (v) after applying the rules in subsection 277(3) to all similar accounts, annual contributions to the account are limited to 50,000 USD or less or there is a maximum lifetime contribution limit to the account of 1,000,000 USD or less (and an account that otherwise satisfies this requirement will not fail to satisfy this requirement solely because the account may receive assets or funds transferred from one or more accounts that meet the requirements of this paragraph or paragraph (b) or from one or more broad participation retirement funds, narrow participation retirement funds or pension funds of a governmental entity, international organization or central bank);

  • (b) an account that satisfies the following requirements:

    • (i) the account is

      • (A) both

        • (I) subject to regulation as an investment vehicle for purposes other than for retirement, and

        • (II) regularly traded on an established securities market, or

      • (B) subject to regulation as a savings vehicle for purposes other than for retirement,

    • (ii) the account is tax-favoured in that

      • (A) contributions to the account that would otherwise be subject to tax are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or

      • (B) taxation of investment income within the account is deferred or investment income within the account is taxed at a reduced rate,

    • (iii) withdrawals are

      • (A) conditioned on meeting specific criteria related to the purpose of the investment or savings account (including the provision of educational or medical benefits), or

      • (B) subject to penalties if made before the criteria in clause (A) are met, and

    • (iv) annual contributions are, after applying the rules in subsection 277(3) to all similar accounts, limited to 50,000 USD or less (and an account that otherwise satisfies this requirement will not fail to satisfy this requirement solely because the account may receive assets or funds transferred from one or more accounts that meet the requirements of paragraph (a) or this paragraph or from one or more broad participation retirement funds, narrow participation retirement funds or pension funds of a governmental entity, international organization or central bank);

  • (c) a life insurance contract with a coverage period that ends before the insured individual attains age 90, if the contract satisfies the following requirements:

    • (i) periodic premiums, which do not decrease over time, are payable at least annually until the earlier of

      • (A) the end of the period in which the contract is in existence, and

      • (B) the date that the insured attains age 90,

    • (ii) the contract has no contract value that any person can access (by withdrawal, loan or otherwise) without terminating the contract,

    • (iii) the amount (other than a death benefit) payable upon cancellation or termination of the contract must not exceed the amount determined by the formula

      A − (B + C)

      where

      A

      is the aggregate premiums paid for the contract,

      B

      is the total of all mortality, morbidity and expense charges (whether or not actually imposed) for the period or periods of the contract’s existence, and

      C

      is the total of all amounts paid prior to the cancellation or termination of the contract, and

    • (iv) the contract has not been acquired by a transferee for value;

  • (d) an account held solely by an estate of a deceased individual, if the documentation for the account includes a copy of the will or death certificate of the individual;

  • (e) an account established in connection with any of the following:

    • (i) a court order or judgement,

    • (ii) a sale, exchange or lease of property, if the account satisfies the following requirements:

      • (A) the account is funded

        • (I) solely with a down payment, earnest money, deposit in an amount appropriate to secure an obligation directly related to the transaction or a similar payment, or

        • (II) with a financial asset that is deposited in the account in connection with the sale, exchange or lease of the property,

      • (B) the account is established and used solely to secure the obligation of

        • (I) the purchaser to pay the purchase price for the property,

        • (II) the seller to pay any contingent liability, or

        • (III) the lessor or lessee to pay for any damages relating to the leased property as agreed under the lease,

      • (C) the assets of the account, including the income earned on the account, will be paid or otherwise distributed for the benefit of the purchaser, seller, lessor or lessee (including to satisfy such person’s obligation) when the property is sold, exchanged or surrendered or the lease terminates,

      • (D) the account is not a margin or similar account established in connection with a sale or exchange of a financial asset, and

      • (E) the account is not associated with an account described in paragraph (f),

    • (iii) an obligation of a financial institution servicing a loan secured by real or immovable property to set aside a portion of a payment solely to facilitate the payment of taxes or insurance related to the property at a later time, or

    • (iv) an obligation of a financial institution solely to facilitate the payment of taxes at a later time;

  • (f) a depository account that satisfies the following requirements:

    • (i) the account exists solely because a customer makes a payment in excess of a balance due with respect to a credit card or other revolving credit facility and the overpayment is not immediately returned to the customer, and

    • (ii) after June 2017, policies and procedures are in effect relating to overpayments (for this purpose, a customer overpayment does not include credit balances to the extent of disputed charges but does include credit balances resulting from merchandise returns) to either

      • (A) prevent a customer from making an overpayment in excess of 50,000 USD, or

      • (B) ensure that any customer overpayment in excess of 50,000 USD is refunded to the customer within 60 days; and

  • (g) a prescribed account. (compte exclu)

  exempt collective investment vehicle

  exempt collective investment vehicle means an investment entity that is regulated as a collective investment vehicle, provided that all of the interests in the collective investment vehicle are held by or through individuals or entities (other than a passive NFE with a controlling person who is a reportable person) that are not reportable persons. (mécanisme de placement collectif dispensé)

  financial account

  financial account means an account maintained by a financial institution, and

  • (a) includes

    • (i) a depository account,

    • (ii) a custodial account,

    • (iii) in the case of an investment entity, any equity or debt interest in the financial institution, except that it does not include any equity or debt interest in an entity that is an investment entity solely because it,

      • (A) renders investment advice to, and acts on behalf of, a customer for the purpose of investing, managing or administering financial assets deposited in the name of the customer with a financial institution other than such entity, or

      • (B) manages portfolios for, and acts on behalf of, a customer for the purpose of investing, managing, or administering financial assets deposited in the name of the customer with a financial institution other than such entity,

    • (iv) any equity or debt interest in the financial institution if one of the purposes of establishing the class of interests was to avoid reporting in accordance with section 271, except that it does not include any equity or debt interest in an entity that is an investment entity solely because it meets the conditions described in clauses (iii)(A) or (B),

    • (v) any cash value insurance contract and any annuity contract issued or maintained by a financial institution, other than a non-investment-linked, non-transferable immediate life annuity that is issued to an individual and monetizes a pension or disability benefit provided under an account that is an excluded account, and

    • (vi) an account that is a client name account maintained by a person or entity that is authorized under provincial legislation to engage in the business of dealing in securities or any other financial instruments, or to provide portfolio management or investment advising services; and

  • (b) despite paragraph (a), does not include an excluded account. (compte financier)

  financial asset

  financial asset

  • (a) includes

    • (i) a security, such as

      • (A) a share of the capital stock of a corporation,

      • (B) an income or capital interest in a widely held or publicly traded trust, or

      • (C) a note, bond, debenture or other evidence of indebtedness,

    • (ii) a partnership interest,

    • (iii) a commodity,

    • (iv) a swap (such as interest rate swaps, currency swaps, basis swaps, interest rate caps, interest rate floors, commodity swaps, equity swaps, equity index swaps and similar agreements),

    • (v) an insurance contract or annuity contract, and

    • (vi) any interest (including a futures or forward contract or option) in a security, partnership interest, commodity, swap, insurance contract or annuity contract; and

  • (b) does not include a non-debt, direct interest in real or immovable property. (actif financier)

  financial institution

  financial institution means an entity, other than a passive NFE, that is a custodial institution, a depository institution, an investment entity or a specified insurance company. (institution financière)

  governmental entity

  governmental entity means the government of a jurisdiction, any political subdivision of a jurisdiction (which, for greater certainty, includes a state, province, county or municipality), a public body performing a function of government in a jurisdiction or any agency or instrumentality of a jurisdiction wholly owned by one or more of the foregoing, unless it is not an integral part or a controlled entity of a jurisdiction (or a political subdivision of a jurisdiction) and for these purposes

  • (a) an integral part of a jurisdiction means any person, organization, agency, bureau, fund, instrumentality or other body, however designated, that constitutes a governing authority of a jurisdiction and where the net earnings of the governing authority are credited to its own account or to other accounts of the jurisdiction, with no portion inuring to the benefit of any private person, except that an integral part does not include any individual who is a sovereign, official or administrator acting in a private or personal capacity;

  • (b) a controlled entity means an entity that is separate in form from the jurisdiction or that otherwise constitutes a separate juridical entity, provided that

    • (i) the entity is wholly owned and controlled by one or more governmental entities directly or indirectly through one or more controlled entities,

    • (ii) the entity’s net earnings are credited to its own account or to the accounts of one or more governmental entities, with no portion of its income inuring to the benefit of any private person, and

    • (iii) the entity’s assets vest in one or more governmental entities upon liquidation and dissolution; and

  • (c) for the purposes of paragraphs (a) and (b),

    • (i) income is deemed not to inure to the benefit of private persons if such persons are the intended beneficiaries of a governmental program and the program activities are performed for the general public with respect to the common welfare or relate to the administration of government, and

    • (ii) income is deemed to inure to the benefit of private persons if the income is derived from the use of a governmental entity to conduct a commercial business that provides financial services to private persons. (entité gouvernementale)

  group annuity contract

  group annuity contract means an annuity contract under which the obligees are individuals who are associated through an employer, trade association, labour union or other association or group. (contrat de rente de groupe)

  group cash value insurance contract

  group cash value insurance contract means a cash value insurance contract that

  • (a) provides coverage on individuals who are associated through an employer, trade association, labour union or other association or group; and

  • (b) charges a premium for each member of the group (or member of a class within the group) that is determined without regard to the individual health characteristics other than age, gender and smoking habits of the member (or class of members) of the group. (contrat d’assurance de groupe avec valeur de rachat)

  high value account

  high value account means a preexisting individual account with an aggregate balance or value that exceeds 1 million USD on June 30, 2017 or on December 31 of any subsequent year. (compe de valeur élevée)

  insurance contract

  insurance contract means a contract (other than an annuity contract) under which the issuer agrees to pay an amount upon the occurrence of a specified contingency involving mortality, morbidity, accident, liability or property risk. (contrat d’assurance)

  international organization

  international organization means any intergovernmental organization (or wholly owned agency or instrumentality thereof), including a supranational organization

  • (a) that is comprised primarily of governments;

  • (b) that has in effect a headquarters or substantially similar agreement with a jurisdiction; and

  • (c) the income of which does not inure to the benefit of private persons. (organisation internationale)

  investment entity

  investment entity means any entity (other than an entity that is an active NFE because of any of paragraphs (d) to (g) of that definition)

  • (a) that primarily carries on as a business one or more of the following activities or operations for or on behalf of a customer:

    • (i) trading in money market instruments (such as cheques, bills, certificates of deposit and derivatives), foreign exchange, transferable securities or commodity futures, exchange, interest rate and index instruments,

    • (ii) individual and collective portfolio management, or

    • (iii) otherwise investing, administering or managing financial assets or money on behalf of other persons; or

  • (b) the gross income of which is primarily attributable to investing, reinvesting or trading in financial assets, if the entity is managed by another entity that is a depository institution, a custodial institution, a specified insurance company or an investment entity described in paragraph (a). (entité d’investissement)

  lower value account

  lower value account means a preexisting individual account with an aggregate balance or value as of June 30, 2017 that does not exceed 1 million USD. (compte de faible valeur)

  narrow participation retirement fund

  narrow participation retirement fund means a fund that is established to provide retirement, disability or death benefits to beneficiaries who are current or former employees (or persons designated by those employees) of one or more employers in consideration for services rendered, if

  • (a) the fund has fewer than 50 participants;

  • (b) the fund is sponsored by one or more employers that are not investment entities or passive NFEs;

  • (c) the employee and employer contributions to the fund (other than transfers of assets from retirement and pension accounts described in paragraph (a) of the definition excluded account) are limited by reference to the employee’s remuneration;

  • (d) participants that are not resident in Canada are not entitled to more than 20% of the fund’s assets; and

  • (e) the fund is subject to government regulation and provides information reporting to the Minister. (fonds de retraite à participation étroite)

  natural person

  natural person means an individual other than a trust. (personne physique)

  new account

  new account means a financial account maintained by a reporting financial institution opened after June 2017. (nouveau compte)

  new entity account

  new entity account means a new account held by one or more entities. (nouveau compte d’entité)

  new individual account

  new individual account means a new account held by one or more individuals (other than trusts). (nouveau compte de particulier)

  non-financial entity

  non-financial entity or NFE means an entity if

  • (a) in the case of an entity that is resident in Canada, it is not a Canadian financial institution; and

  • (b) in the case of a non-resident entity, it is not a financial institution. (entité non financière ou ENF)

  non-reporting financial institution

  non-reporting financial institution means a Canadian financial institution that is

  • (a) the Bank of Canada;

  • (b) a governmental entity or international organization, other than with respect to a payment that is derived from an obligation held in connection with a commercial financial activity of a type engaged in by a specified insurance company, custodial institution or depository institution;

  • (c) a broad participation retirement fund, a narrow participation retirement fund, a pension fund of a governmental entity, international organization or central bank, or a qualified credit card issuer;

  • (d) an exempt collective investment vehicle;

  • (e) a trust if a trustee of the trust is a reporting financial institution and reports all information required to be reported under this Part with respect to all reportable accounts of the trust; or

  • (f) a prescribed entity. (institution financière non déclarante)

  participating jurisdiction

  participating jurisdiction means

  • (a) Canada; and

  • (b) each jurisdiction identified as a participating jurisdiction by the Minister on the Internet website of the Canada Revenue Agency or by any other means that the Minister considers appropriate. (juridiction partenaire)

  participating jurisdiction financial institution

  participating jurisdiction financial institution means

  • (a) a financial institution that is resident in a participating jurisdiction, but excludes a branch of that financial institution that is located outside a participating jurisdiction; and

  • (b) a branch of a financial institution that is not resident in a participating jurisdiction, if that branch is located in a participating jurisdiction. (institution financière d’une jurisdiction partenaire)

  passive NFE

  passive NFE means

  • (a) a non-financial entity that is not an active NFE; and

  • (b) an entity that is

    • (i) described in paragraph (b) of the definition investment entity, and

    • (ii) not a participating jurisdiction financial institution. (ENF passive)

  pension fund of a governmental entity, international organization or central bank

  pension fund of a governmental entity, international organization or central bank means a fund that is established by a governmental entity, international organization or central bank to provide retirement, disability or death benefits to beneficiaries or participants

  • (a) that are current or former employees (or persons designated by those employees); or

  • (b) that are not current or former employees, if the benefits provided to them are in consideration of personal services performed for the governmental entity, international organization or central bank. (fonds de pension désigné)

  preexisting account

  preexisting account means

  • (a) a financial account maintained by a reporting financial institution on June 30, 2017; and

  • (b) a financial account of an account holder (other than a financial account described in paragraph (a)) maintained by a reporting financial institution if

    • (i) the account holder also holds with the reporting financial institution (or with a related entity within Canada) a financial account that is a preexisting account under paragraph (a),

    • (ii) the reporting financial institution (and, as applicable, the related entity within Canada) treats both of the aforementioned financial accounts, and any other financial accounts of the account holder that are preexisting accounts under this paragraph, as a single financial account for the purposes of

      • (A) satisfying the standards and knowledge requirements set forth under this Part, and

      • (B) determining the balance or value of any of the financial accounts, when applying any of the account thresholds,

    • (iii) with respect to a financial account that is subject to AML/KYC procedures, the reporting financial institution is permitted to satisfy those AML/KYC procedures for the financial account by relying upon the AML/KYC procedures performed for the preexisting account described in paragraph (a), and

    • (iv) the opening of the financial account does not require the provision of new, additional or amended customer information by the account holder other than for purposes of this Part. (compte préexistant)

  preexisting entity account

  preexisting entity account means a preexisting account held by one or more entities. (compte d’entité préexistant)

  preexisting individual account

  preexisting individual account means a preexisting account held by one or more individuals (other than trusts). (compte de particulier préexistant)

  qualified credit card issuer

  qualified credit card issuer means a financial institution that satisfies the following requirements:

  • (a) the financial institution is a financial institution solely because it is an issuer of credit cards that accepts deposits only when a customer makes a payment in excess of a balance due with respect to the card and the overpayment is not immediately returned to the customer; and

  • (b) the financial institution has policies and procedures either to prevent a customer from making an overpayment in excess of 50,000 USD or to ensure that any customer overpayment in excess of 50,000 USD is refunded to the customer within 60 days, in each case applying the rules set forth in subsection 277(3) for account aggregation, and, for the purposes of this paragraph, a customer overpayment does not refer to credit balances to the extent of disputed charges but does include credit balances resulting from merchandise returns. (émetteur de carte de crédit déterminé)

  related entity

  related entity, in respect of an entity, means an entity if either entity controls the other entity or the two entities are controlled by the same entity or individual (and in the case of two entities that are investment entities described under paragraph (b) of the definition investment entity, the two entities are under common management and such management fulfils the due diligence obligations of the investment entities). For this purpose, control includes direct or indirect ownership of

  • (a) in the case of a corporation, shares of the capital stock of a corporation that

    • (i) give their holders more than 50% of the votes that could be cast at the annual meeting of the shareholders of the corporation, and

    • (ii) have a fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the capital stock of the corporation;

  • (b) in the case of a partnership, an interest as a member of the partnership that entitles the member to more than 50% of

    • (i) the income or loss of the partnership, or

    • (ii) the assets (net of liabilities) of the partnership if it were to cease to exist; and

  • (c) in the case of a trust, an interest as a beneficiary under the trust with a fair market value that is greater than 50% of the fair market value of all interests as a beneficiary under the trust. (entité liée)

  reportable account

  reportable account means an account that

  • (a) is held by

    • (i) one or more reportable persons, or

    • (ii) by a passive NFE, if one or more controlling persons of the passive NFE is a reportable person; and

  • (b) has been identified as meeting the conditions in paragraph (a) in accordance with the due diligence procedures described in sections 272 to 277. (compte déclarable)

  reportable jurisdiction

  reportable jurisdiction means a jurisdiction other than Canada and the United States of America. (juridiction soumise à déclaration)

  reportable jurisdiction person

  reportable jurisdiction person means a natural person or entity that is resident in a reportable jurisdiction under the tax laws of that jurisdiction, or an estate of an individual who was a resident of a reportable jurisdiction under the tax laws of that jurisdiction immediately before death. For this purpose, an entity that has no residence for tax purposes is deemed to be resident in the jurisdiction in which its place of effective management is situated. (personne d’une juridiction soumise à déclaration)

  reportable person

  reportable person means a reportable jurisdiction person other than

  • (a) a corporation the stock of which is regularly traded on one or more established securities markets;

  • (b) any corporation that is a related entity of a corporation described in paragraph (a);

  • (c) a governmental entity;

  • (d) an international organization;

  • (e) a central bank; or

  • (f) a financial institution. (personne devant faire l’objet d’une déclaration)

  reporting financial institution

  reporting financial institution means a Canadian financial institution that is not a non-reporting financial institution. (institution financière déclarante)

  specified insurance company

  specified insurance company means any entity that is an insurance company (or the holding company of an insurance company) that issues, or is obligated to make payments with respect to, cash value insurance contracts or annuity contracts. (compagnie d’assurance particulière)

  TIN

  TIN means

  • (a) the number used by the Minister to identify an individual or entity, including

    • (i) a social insurance number,

    • (ii) a business number, and

    • (iii) an account number issued to a trust; and

  • (b) in respect of a jurisdiction other than Canada, a taxpayer identification number used in that jurisdiction to identify an individual or entity (or a functional equivalent in the absence of a taxpayer identification number). (NIF)

  USD

  USD means dollars of the United States of America. (USD)

• Marginal note:Interpretation

  (2) This Part relates to the implementation of the Common Reporting Standard set out in the Standard for Automatic Exchange of Financial Account Information in Tax Matters approved by the Council of the Organisation for Economic Co-operation and Development and, unless the context otherwise requires, the provisions in this Part are to be interpreted consistently with the Common Reporting Standard, as amended from time to time.

• Marginal note:Interpretation — investment entity

  (3) For the purposes of the definition investment entity in subsection (1), an entity is considered to be primarily carrying on as a business one or more of the activities described in paragraph (a) of that definition, or an entity’s gross income is primarily attributable to investing, reinvesting or trading in financial assets for the purposes of paragraph (b) of that definition, if the entity’s gross income attributable to the relevant activities equals or exceeds 50% of the entity’s gross income during the shorter of

  • (a) the three-year period that ends at the end of the entity’s last fiscal period, and

  • (b) the period during which the entity has been in existence.

• Marginal note:Equity or debt interest – deeming rule

  (4) In the case of a trust that is a financial institution,

  • (a) an equity interest is deemed to be held by any person treated as a settlor or beneficiary of all or a portion of the trust or any other natural person exercising ultimate effective control over the trust, and

  • (b) a reportable person is treated as a beneficiary of a trust if the reportable person has the right to receive directly or indirectly (such as through a nominee) a mandatory distribution from the trust or may receive, directly or indirectly, a discretionary distribution from the trust.