2019-0824511C6 2019 CTF - Q11 - Common Reporting Standards

Principal Issues: How is CRA using CRS information?

Position: General comments provided.

Author: Mathieu, Francois
Section: 270-281

2019 CTF Annual Conference

CRA Round Table

Question 11: Common Reporting Standards (“CRS”)

How is the CRA using the CRS information obtained that is now in its possession? What methodology is being used? How is technology being deployed? What insights are you gathering in terms of patterns, outliers, etc. in the taxpayer population? How is the information being shared amongst your peer group?

CRA Response

The CRA is using better data and better approaches to deliver better results.

Information sharing and international cooperation are key to fighting aggressive tax avoidance. Canada is continuing to build strong relationships with its international partners to implement better tools and better approaches in combatting aggressive tax avoidance. The CRS is one of those tools. Under the CRS, Canada currently has activated exchange relationships with 90 jurisdictions for incoming CRS data and 64 for outgoing CRS data. The CRA expects the number of activated exchange relationships for CRS to increase in the coming years.

The CRS provides the CRA with information on Canadians’ overseas financial accounts. This financial account information helps the CRA identify offshore financial accounts held by Canadian tax residents and assess them for potential non-compliance with Canadian tax laws. The information shared is analyzed to identify taxpayers who are avoiding their Canadian tax obligations.

More specifically, CRS information is being incorporated into CRA systems and made available to those involved in the spectrum of compliance and collections efforts. Operationally, CRS information complements existing CRA risk assessment processes and contributes to compliance treatments based on risk. The CRA’s strategy for the use of incoming CRS data includes:

1.    Data validation, cleansing and matching of incoming CRS data to Canadian taxpayer accounts.

2.    Analysis and risk assessment of taxpayer data.

3.    Sharing of CRS data with appropriate compliance programs to determine compliance treatments such as compliance projects, educational campaigns, targeted audits, etc. depending on the level of risk.

The CRA is also exploring ways to leverage CRS data in order to improve taxpayer service and encourage voluntary compliance. The CRA continues to work with international partners through various working groups at the OECD, including the Forum on Tax Administration, in order to identify best practices for the effective use of CRS data.

François Mathieu
2019-082451
December 3, 2019

Response prepared by Maureen O’Leary, Specialized Audit Support Division

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