100873877

The Canada Revenue Agency announced that it is focusing on electronic funds transfers (EFT) in its campaign to crack down on international tax evasion.

Effective this month, banks, credit unions, crown corporations that accept deposits, financial service cooperatives and other financial intermediaries have to report to the CRA any incoming and outgoing EFTs of $10,000 or more.

The CRA said these reports will allow it to better identify “higher risk taxpayers and file” and in turn identify people involved in what the CRA calls “international aggressive tax avoidance” and attempts to hide income and assets abroad.

An EFT is defined as an electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems. In recent years this method of moving funds have been linked to tax evasion and money laundering activities and even operations that fund terrorist groups.

The new reporting requirement are the same as those for reports currently provided to the Financial Transaction and Reports Analysis Centre of Canada (FINTRAC). Financial intermediaries will have to submit one report to both FINTRAC and CRA at the same time.

ETF’s must be filed no later than five working days after the day the transferred occurred.

FINTRACT was established with the passage of the Proceeds of Crime (Money Laundering) and Terrorism Financing Act. The act imposes reporting and recording requirements on firms including, insurance companies, money service businesses, casinos and independent agents and brokers.

Back in 2013, FINTRACT came under fire from the Office of the Privacy Commissioner of Canada (OPC) for collecting more personal information on Canadians than is necessary. Then Privacy Commissioner Jennifer Stoddart made a statement saying that FINTRACT made “limited progress” in addressing earlier recommendations by a previous OPC audit that FINTRACT ensure the personal information it collects in kept at an “absolute minimum.”

The information reported must include: the transmission of instructions for a transfer of funds through any electronic, magnetic or optical device, telephone or computer made at the request of the client.

Information collected under the measure will be safeguarded by the CRA. The agency said the data will only be used for the purposes for which it is collected and swill be subject to strict security protocols and stored in a segregated database.



Related Download
Improving the State of Affairs With Analytics Sponsor: SAS
Improving the State of Affairs With Analytics
Download this case study-rich white paper to learn why data management and analytics are so crucial in the public sector, and how to put it to work in your organization.
Register Now