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

Marginal note:Special due diligence rules

• 277 (1) A reporting financial institution may not rely on a self-certification or documentary evidence if the reporting financial institution knows or has reason to know that the self-certification or documentary evidence is incorrect or unreliable.

• Marginal note:Exception — individual beneficiary receiving death benefit

  (2) A reporting financial institution may presume that an individual beneficiary (other than the owner) of a cash value insurance contract or an annuity contract receiving a death benefit is not a reportable person and may treat the financial account as other than a reportable account unless it has actual knowledge, or reason to know, that the beneficiary is a reportable person.

• Marginal note:Aggregation rules

  (3) For the purposes of

  • (a) determining the aggregate balance or value of financial accounts held by an individual or entity,

    • (i) a reporting financial institution is required to aggregate all financial accounts maintained by the reporting financial institution, or by a related entity, but only to the extent that the reporting financial institution’s computerized systems

      • (A) link the financial accounts by reference to a data element such as a client number or TIN, and

      • (B) allow account balances or values to be aggregated, and

    • (ii) each holder of a jointly held financial account shall be attributed the entire balance or value of the jointly held financial account; and

  • (b) determining the aggregate balance or value of financial accounts held by an individual in order to determine whether a financial account is a high value account, a reporting financial institution is also required — in the case of any financial accounts that a relationship manager knows, or has reason to know, are directly or indirectly owned, controlled or established (other than in a fiduciary capacity) by the same individual — to aggregate all such accounts.

• Marginal note:Dealer accounts

  (4) Subsection (5)

  • (a) applies to a reporting financial institution in respect of a client name account maintained by the institution if

    • (i) property recorded in the account is also recorded in a financial account (in this subsection and subsection (5) referred to as the related account) maintained by a financial institution (in this subsection and subsection (5) referred to as the dealer) that is authorized under provincial legislation

      • (A) to engage in the business of dealing in securities or any other financial instrument, or

      • (B) to provide portfolio management or investment advising services, and

    • (ii) the dealer has advised the institution whether the related account is a reportable account; and

  • (b) does not apply, despite paragraph (a), if it can reasonably be concluded by the institution that the dealer has failed to comply with its obligations under this Part.

• Marginal note:Dealer accounts

  (5) If this subsection applies to a reporting financial institution in respect of a client name account,

  • (a) sections 272 to 276 do not apply to the institution in respect of the account; and

  • (b) the institution shall rely on the determination of the dealer in respect of the related account in determining whether the account is a reportable account.

• Marginal note:Group insurance and annuities

  (6) A reporting financial institution may treat a financial account that is a member’s interest in a group cash value insurance contract or group annuity contract as a financial account that is not a reportable account until the day on which an amount becomes payable to the employee, certificate holder or beneficiary, if the financial account meets the following requirements:

  • (a) the group cash value insurance contract or group annuity contract is issued to an employer and covers 25 or more employees or certificate holders;

  • (b) the employees or certificate holders are entitled to

    • (i) receive any contract value related to their interest, and

    • (ii) name beneficiaries for the benefit payable upon the employee’s or certificate holder’s death; and

  • (c) the aggregate amount payable to any employee or certificate holder or beneficiary does not exceed 1 million USD.

Marginal note:Reporting

• 278 (1) Every reporting financial institution shall file with the Minister, before May 2 of each calendar year, an information return in prescribed form relating to each reportable account maintained by the institution at any time during the immediately preceding calendar year and after June 30, 2017.

• Marginal note:Electronic filing

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

Marginal note:Record keeping

• 279 (1) Every reporting 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 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 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

280 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:Production of TIN

• 281 (1) Every reportable person shall provide their TIN at the request of a reporting financial institution that is required under this Part to make an information return requiring the TIN.

• Marginal note:Confidentiality of TIN

  (2) A person required to make an information return referred to in subsection (1) shall not knowingly use, communicate or allow to be communicated, otherwise than as required or authorized under this Act or a regulation, the TIN without the written consent of the reportable person.

• Marginal note:Penalty for failure to provide TIN

  (3) Every reportable person who fails to provide on request their TIN to a reporting financial institution that is required under this Part to make an information return requiring the TIN is liable to a penalty of $500 for each such failure, unless

  • (a) an application for the assignment of the TIN is made to the relevant reportable jurisdiction not later than 90 days after the request was made and the TIN is provided to the reporting financial institution that requested it within 15 days after the reportable person received it; or

  • (b) the reportable person is not eligible to obtain a TIN from the relevant reportable jurisdiction (including because the relevant reportable jurisdiction does not issue TINs).

• Marginal note:Assessment

  (4) The Minister may at any time assess any amount payable under subsection (3) by any person and, if the Minister sends a notice of assessment to the person, sections 150 to 163, subsections 164(1) and (1.4) to (7), sections 165 to 167 and Division J of Part I apply with such modifications as the circumstances require.