Compliance

New Compliance Requirements for Financial Institutions under Part XIX CRS (Common Reporting Standard)

Starting January 1, 2027, Canada’s revised CRS rules (Part XIX of the Income Tax Act) bring enhanced reporting requirements for financial institutions. Learn what they must do to comply and how individuals are affected.

By NomadicTax Research Team • 5-8 min read • July 16, 2026

## What is CRS and Part XIX? The Common Reporting Standard (CRS) is an international tax transparency measure. Canada implemented it via **Part XIX of the Income Tax Act**, which mandates that financial institutions collect and share financial account information for tax purposes. ([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)) ## What changes are coming into effect from January 1, 2027? - Amendments published in the Notice of Ways and Means Motion (NWMM) in May 2026 will **come into force on January 1, 2027**, modifying due diligence and reporting obligations under Part XIX. ([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)) - Institutions must report whether an account holder has provided a valid self-certification, and whether accounts are joint accounts (and other details about joint 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)) - Enhanced obligations to collect Taxpayer Identification Numbers (TIN) and dates of birth for new and preexisting accounts under defined timelines. ([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 and what actions are required? ### For financial institutions - Update account opening and ongoing due-diligence procedures to ensure residence status, self-certifications, and account holder identity are documented. - For **preexisting reportable accounts**, use “reasonable efforts” to obtain TINs and birth dates by end of following second calendar year after identification. ([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)) - Adjust internal systems to report joint account information, both holder count and whether valid self-certifications exist. - Be ready to file **Part XIX Information Returns** before **May 2 following the calendar year** with all required elements. Penalties apply for late or incomplete filings. ([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)) ### For account holders and entities - Be prepared to receive requests from financial institutions to provide **self-certification**, TIN, and date of birth. - Especially non-residents or entities with foreign connections must understand what “residence for tax purposes” means under Part XIX. - If you are a joint account holder, be aware the financial institution will need certain attestations or documents for each holder. ## Example scenarios - An individual opens a new savings account in 2027: the bank requires self-certification of residence status and a valid TIN. Without it, delays or withholding penalties may result. - A trust or partnership identified as resident in Canada will fall under reporting obligations; documentation of controlling persons and tax residence is required. ## Consequences of non-compliance - Financial institutions: risk of penalties under subsections 162(7.01), 162(7.02), or $100 per missing data element under subsection 162(5) for incomplete returns. ([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)) - Account holders: delays, possible withholding or limited access to financial services, or requests for documentation with risk of being reported under other jurisdictions. ## Take-home advice - For financial institutions: begin updating forms, customer intake flows, and staff training now. - For business owners or individuals with international assets or multiple jurisdictions: consult with tax advisors about residency, entity classification, and implications under CRS. - Ensure foreign-source financial accounts are properly reported: avoid penalties, legal issues. Staying compliant with Part XIX is no longer optional: come **January 1, 2027**, these amended rules are law. Plan ahead.