Compliance
Foreign Reporting and the Common Reporting Standard Changes Coming January 1, 2027
New amendments to Part XIX of the Income Tax Act will change how financial institutions in Canada report foreign financial assets beginning 2027—digital nomads, non-residents, and internationals must understand the impact.
By NomadicTax Research Team • 5-8 min read • August 28, 2026
## What’s changing with Common Reporting Standard & foreign assets
In **May 2026**, the Government of Canada passed a **Notice of Ways and Means Motion (NWMM)** to amend **Part XIX of the Income Tax Act**. These amendments clarify reporting obligations for **financial institutions** concerning foreign financial accounts and assets, including those held by non-residents or individuals with dual residences. They are scheduled to **come into force on January 1, 2027**. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/enhanced-financial-account-information-reporting/reporting-sharing-financial-account-information-other-jurisdictions/guidance-on-common-reporting-standard-part-income-tax-act.html?utm_source=openai))
### Key revisions include:
- Clarification around **preexisting cash-value insurance and annuity contracts** as of **June 30, 2017**, which are exempt if they cannot be sold to non-residents due to legal/regulatory restrictions. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/enhanced-financial-account-information-reporting/reporting-sharing-financial-account-information-other-jurisdictions/guidance-on-common-reporting-standard-part-income-tax-act.html?utm_source=openai))
- Enhanced **due diligence procedures** triggered when insurance companies become aware of assignments of ownership, including identity verification and identification of new holders. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/enhanced-financial-account-information-reporting/reporting-sharing-financial-account-information-other-jurisdictions/guidance-on-common-reporting-standard-part-income-tax-act.html?utm_source=openai))
- Introduction of further guidance throughout for how to interpret account types, residency status, and source of funds under the updated rules. Institutions will update procedures in line with these changes. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/enhanced-financial-account-information-reporting/reporting-sharing-financial-account-information-other-jurisdictions/guidance-on-common-reporting-standard-part-income-tax-act.html?utm_source=openai))
## Who is affected?
- **Non-resident financial institutions** and **Canadian institutions** holding assets for persons with foreign residency ties.
- **Digital nomads** or those splitting time between countries may have foreign accounts and need to ensure full disclosure to avoid penalties.
- Anyone who holds insurance or annuity contracts with foreign or cross-border elements must check if they fall under the “preexisting contract” provision.
## Compliance tips for people & institutions
- If you have foreign bank accounts, investments, or cash-value insurance/ annuities, check whether they are reportable post-2027. Start gathering account and ownership documentation now.
- Financial institutions should update procedures for customer onboarding, residence verification, and assignment due diligence based on the guidance published. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/enhanced-financial-account-information-reporting/reporting-sharing-financial-account-information-other-jurisdictions/guidance-on-common-reporting-standard-part-income-tax-act.html?utm_source=openai))
- Keep records going back to 2017 for relevant contracts to verify whether they fall under exemptions or special categories.
## Examples
- **Digital nomad “Alex”** lives 8 months in Canada and 4 elsewhere. Alex has a foreign annuity that allows selling to non-residents. That means starting 2027, that annuity may need to be reviewed and reported under Part XIX.
- **Foreign-domiciled insurance contract** issued in 2016 that cannot be sold to non-residents. That is a preexisting contract on **June 30, 2017**, and may be exempt if restrictive laws apply. But proof may be required after 2027.
## Actionable next steps
| Time | Action |
|---|---|
| Immediately | If you hold or deal with cross-border financial contracts, collect documentation showing dates, ownership, contracts terms as of June 30, 2017. |
| Before end 2026 | Financial institutions should update KYC, due diligence, and assignment policies. Individuals should communicate with financial advisors to ensure reporting is accurate. |
| Starting Jan 1, 2027 | Apply new rules when filing or disclosing holdings; prepare for reporting obligations or possible penalties for non-disclosure. |
**Takeaway**: These changes underscore that foreign financial accountability is increasing. Digital nomads or cross-border individuals should ensure early compliance rather than scrambling when rules take effect. NomadicTax Research Team recommends documenting everything now, consulting with cross-border tax experts, and monitoring updates from CRA and Finance Canada.