Guidance on the Common Reporting Standard, Part XIX of the Income Tax Act, 19 December 2025

Obligation to comply independent of FATCA

6.1 Reporting financial institutions must comply with verification and due diligence procedures under Part XIX in connection with the accounts they maintain. This is the case regardless of whether the financial institution is subject to other regulatory requirements, such as having to complete due diligence related to AML/KYC and Part XVIII. The required procedures under Part XIX are, in many respects, determined by whether a particular account is:

• an individual or an entity account;
• a preexisting or a new account; or
• a lower value or a high value preexisting individual account.

Overview of collection and search obligations

6.2 Due diligence is required to identify reportable accounts. Financial institutions are required to take certain actions, such as collecting information and/or reviewing information in their possession to determine whether to treat an account as a reportable account. These requirements result in a financial institution having to:

• search for certain indicia linked to an account holder (see paragraph 7.24 for a list of indicia); and/or
• request that account holders self-certify their residence status.

Responsibility of the account holder to determine residence

6.5 A financial institution can be asked to clarify the rules for determining the residence status of a reportable person. Depending on the situation, these rules can be complex, and financial institutions are not expected to provide information on all aspects of tax residency. If an account holder asks for such a clarification, a financial institution can refer the account holder to seek professional tax advice or to review information available at the CRA and the OECD. It is the responsibility of account holders to determine where they are resident for tax purposes.

FI can rely on accessible documentation collected and maintained by an agent, e.g., fund advisor

6.8 A financial institution can rely on documentation collected by an agent (including an insurance advisor, a banking consultant, a fund advisor for mutual funds, pooled funds, hedge funds, or a private equity group) of the financial institution. The agent can retain the documentation as part of an information system maintained for one or more financial institutions provided that, under the system, any financial institution on behalf of which the agent retains documentation can easily access the data regarding the nature of the documentation, the information contained in the documentation (including a copy of the documentation itself) and its validity, and must allow such financial institution to easily transmit data, either directly into an electronic system or by providing such information to the agent, regarding any facts of which it becomes aware that can affect the reliability of the documentation. Where the agent retains the documentation as part of an information system maintained on behalf of multiple financial institutions, an account will only be a new account to the extent that it is a new account to the agent as the status of a financial account as a new account is determined by reference to whether it is new to the agent (for example, a fund manager), and not by whether it is new to the financial institution (for example, a fund managed by the fund manager).

6.9 … The agent must have a system in effect to ensure that any information it receives regarding facts that affect the reliability of the documentation or the status assigned to the customer are provided to all financial institutions for which the agent retains the documentation. …

Application to fund managers

6.10 …Under the [above] provisions … an investment fund can rely on documentation collected by a fund manager as agent for the fund. Further, a fund manager can retain the documentation as part of an information system maintained for multiple reporting financial institutions as long as all the reporting financial institutions for which the fund manager retains the documentation can easily access the data and information related to the documentation, update the data for facts that can affect the reliability of the documentation and establish how and when data has been transmitted to the fund manager. This allows a fund manager to undertake the due diligence procedures for the customer and use this information for all financial accounts maintained for the customer by the funds that the fund manager manages. …

No requirement to use the CRA self-certification forms

6.22 Combined self-certification forms have also been developed by the CRA to assist financial institutions that are required to comply with both Part XVIII and Part XIX:

• RC518, Declaration of Tax Residence for Individuals – Part XVIII and Part XIX of the Income Tax Act
• RC519, Declaration of Tax Residence for Entities – Part XVIII and Part XIX of the Income Tax Act

6.23 While these forms are not prescribed (i.e., they are not required to be used), financial institutions are encouraged to use them. Financial institutions that develop their own forms must ensure that their forms appropriately capture all the proper attestations and information required by Part XIX and Part XVIII.

Reliance on self-certification

6.31 ... The financial institution can accept the self-certification as long as information in the account opening instruction or other information that is otherwise readily at hand does not discredit its validity or is not being misused to undermine the CRS due diligence.

CIV (but not a REIT) is generally considered an investment entity

3.21 An entity is generally considered an investment entity if it functions or holds itself out as a collective investment vehicle, mutual fund, exchange traded fund, private equity fund, hedge fund, venture capital fund, leverage buy-out fund or any similar investment vehicle established with an investment strategy of investing, reinvesting, or trading financial assets.

3.22 An entity that primarily conducts as a business investing, administering, or managing non-debt, direct interests in real or immovable property on behalf of other persons, such as a type of real estate investment trust, will not be an investment entity.

Residence of partnership

3.32 A Canadian financial institution can take the form of a partnership. A partnership will be considered as a Canadian resident partnership if:

• All the partners, including all end members, are resident in Canada;
• The place of effective management and control of a partnership's business is situated in Canada; or
• The partnership was formed under the laws of a province or territory.

Residence of trust

3.33 A Canadian financial institution can also take the form of a trust. A trust is considered resident in Canada for tax purposes if the effective management and control of the trust's business takes place in Canada. Generally, for reporting purposes, a trust will be viewed as resident in Canada if the majority of its trustees are resident in Canada, provided that evidentiary support demonstrates the exercise of decision-making powers and responsibilities over the trust by the trustees. However, the trust must be a listed financial institution as described in paragraph 3.35 in order to have reporting obligation in Canada under Part XIX.

Para. (k) applies even if promotion directed at a small group of potential investors

3.37 Paragraph k) of the definition of listed financial institution ensures that that term includes professionally-managed trusts and other entities that are promoted or represented to the public. Such entities typically seek to raise capital from, or become known as potential investments for, unrelated or external investors. At the same time, certain investment vehicles cannot be promoted to the public if they do not seek external capital (for example, a personal trust used as a means for an individual or a family to hold investable assets). An investment vehicle is considered to be promoted or represented to the public even if marketing or other communication efforts are directed at a limited or a small group of potential investors.

Relevance of active/ passive NFE distinction

4.3 There are two types of NFEs: active and passive. The distinction is important since a reporting financial institution is required to apply a higher standard of due diligence to financial accounts held by a passive NFE. The financial institution is required to determine whether the passive NFE is controlled by one or more reportable persons.

Scope of passive income

4.8 Passive income is not defined in Part XIX. The term is required to be interpreted consistently with the OECD Commentaries on the CRS. As such, the term "passive income" will generally include income from the mere holding of property, such as:

• dividends;
• interest;
• income equivalent to interest;
• rents and royalties, other than rents and royalties derived in the active conduct of a business conducted, at least in part, by employees of the NFE;
• annuities;
• the excess of gains over losses from the sale or exchange of financial assets that gives rise to the passive income described previously;
• the excess of gains over losses from transactions (including futures, forwards, options, commodity futures or exchanges, and similar transactions) in any financial assets;
• the excess of foreign currency gains over foreign currency losses;
• net income from swaps; and
• amounts received under cash value insurance contracts.

4.9 Passive income will not include, in the case of a NFE that regularly acts as a dealer in financial assets, any income from any transaction entered into in the ordinary course of such dealer's business as such a dealer.

4.10 Income received on assets used as capital in an insurance business is treated as active rather than passive income.

Administrative approach to avoiding duplicate reporting

10.13 Administratively, when subsections 277(4) and (5) apply, the CRA allows the following:

• The financial institution may report the account it maintains based on information provided from the dealer, and it must inform the dealer in writing that the financial institution will do the reporting. This alternative relieves the dealer from the reporting obligation; or
• The dealer may do both the due diligence and reporting obligations for the client name account, provided the dealer also advises the financial institution in writing that, in addition to communicating the status of the accounts, it (the dealer) will do the reporting. In such cases, information return filed by the dealer for such client name accounts must identify the fund as the reporting financial institution.

This approach avoids duplicate reporting (if any) in respect of the financial asset.

When only the financial institution reports the account, it must advise the dealer in writing that it will assume the reporting obligations for the account. In that case, the Part XIX information return should be filed using the Business Number of the financial institution.

When the dealer does both the due diligence and the reporting, it must advise the financial institution in writing, which accounts are reportable, and that it will be responsible for the reporting as well. In situations where no accounts are determined to be reportable, the dealer must also communicate to the financial institution that no accounts are reportable for the calendar year.