The Common Reporting Standard (CRS) is an agreement amongst participating jurisdictions of the Organization for Economic Co-operation and Development (OECD) to share relevant, financial information in an effort to eliminate tax evasion and tax fraud.
The purpose of CRS is to set a new, international standard for the automatic exchange of financial account information between jurisdictions to reduce global tax evasion and improve tax compliance.
CRS requires all Canadian financial institutions to report on financial accounts held by individuals who hold tax residency status in jurisdictions outside of Canada and the United States, and by entities (or certain entities controlled by reportable clients) to the Canada Revenue Agency (CRA). Similarly, financial institutions around the world will report the tax residency status of their clients to their own country’s governing tax body, so these agencies can share information with each other.
CRS was developed in response to a G20 request and approved by the Organization for Economic Co-Operation and Development (OECD) on July 15, 2014. Canada, along with over 100 other countries, has agreed to comply with CRS, and incorporated CRS into our Income Tax Act on December 15, 2016.
July 1, 2017 was the start date, pledged by the Department of Finance, for all Canadian financial institutions to have procedures in place that identify, and report accounts held by non-residents to the Canada Revenue Agency (CRA).
Starting July 1, 2017, VCIB is required to ask customers to self-certify their tax residency during the account opening process, and when making changes to personal information.
In compliance with federal regulations, VCIB will disclose this information to CRA so it can be shared with relevant countries. VCIB will not directly report information to foreign tax authorities.
If an account is reportable, VCIB is required by law to report the following information to the CRA:
- identifying information for the account holder (name and address)
- taxpayer identification numbers
- date of birth
- country (or countries) of tax residence
- account number
- account balance or value at end of the calendar year
Canadian financial institutions are not required to notify their account holders automatically when reporting to the CRA in connection with the Common Reporting Standard. However, VCIB will, upon request, inform account holders whether their personal information has been reported.
For more information on CRS, please visit Canada Revenue Agency’s enhanced financial account information reporting page.
Prepaid Reloadable Visa cards are classified like a bank account.
At the time of account opening, a question was posed regarding tax residency. Our records show that your response to the question indicated tax residency outside of Canada.
If you do not respond, VCIB may be required to report certain information associated with your account to CRA. Should CRA follow up, you may be at risk of a $500 fine.
Canada Post (CPC) is the retailer for the cards, but VCIB is the financial institution responsible for the issuance and maintenance.
Our cardholder agreements disclose VCIB’s need to gather additional information if needed:
Please see the section on Privacy:
We may request your Social Insurance Number (SIN) or other tax identification information for tax residency self-certification and revenue reporting purposes and may disclose such information to the Canada Revenue Agency pursuant to applicable laws.
The requirement is for all purchasers of VCIB Prepaid Reloadable Visa cards to self-declare their tax residency, which differs from citizenship. Canadian tax residents will still need to complete the form, as will those who earn income and pay taxes in a country outside of Canada, as will those who hold tax residency in more than 1 jurisdiction.
Yes, VCIB is collecting the SIN based on CRA requirements on the RC518 Declaration of Tax Residence for Individuals form.
Providing your SIN as part of the fully completed self-declaration form gives VCIB confirmation of your tax residency. If you complete the form declaring that you are solely a Canadian tax resident, VCIB does not have an obligation to report your information to CRA.
If you are reluctant to provide your SIN and provide an incomplete form, there is a possibility of follow up clarification and fines (assessed by the CRA) to the cardholder for failure to report.
Yes, the account can be closed at any time at the request of the cardholder – however, depending on the circumstance, the self-certification form may still need to be completed.