#CyberFLASH: How new global tax rules could erode your financial privacy

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If you have a bank account somewhere overseas, that information will make its way back to the Canada Revenue Agency (CRA) in a couple of years.

In 2018, international tax authorities will begin automatically sharing financial information under the terms of the OECD’s common reporting standard (CRS).

The objective is to curb international tax evasion, but the cost is an erosion of personal privacy.

“CRS is an indication of how small the world has become and how difficult it is to keep your private information private,” says Roy Berg, director of U.S. tax law with Moodys Gartner Tax Law LLP in Calgary.

The OECD approved the new global standard in July 2014. By October of that year, more than 50 countries, including Canada, signed a commitment to implement it. To date, more than 60 countries have signed on. Canada has promised to adopt the standard starting July 1, 2017 with the first exchange of financial account information scheduled for September 2018.

Under the new standard, foreign tax authorities will provide information to the CRA about financial accounts in their jurisdictions held by Canadian residents. The CRA will reciprocate by providing the same information about accounts in Canada held by residents of foreign jurisdictions. To make this happen, financial institutions in the countries that have adopted the new standard will be required to report non-residents’ bank account information back to the taxpayer’s home jurisdiction.

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