As reported in the Globe and Mail earlier today, China and Canada will begin exchanging tax and financial information for the first time this September. The collaboration will provide Canadian authorities a clearer picture into the activities of some foreign-property owners who evade Canadian taxes in real estate markets such as Vancouver.
The exchange of tax information is part of a move by more than 100 jurisdictions in the world that have committed to implementing the Common Reporting Standard, a global agreement for the automatic exchange of tax and financial-account information. The agreements are aimed at combatting tax avoidance and evasion.
Under the agreement, all participating countries will require financial institutions to identify financial accounts held by customers who are non-residents for tax purposes and to report these accounts to the customers’ home tax authorities on an annual basis.
Canada already has an agreement in place with 61 other countries, however China will be joining the party later this fall.
The treaty will also give Chinese authorities the ability to track down economic fugitives in Canada.