Canada — Regulatory framework (FATCA, CRS & QI)

Last updated: 24 Nov 2025

Canada — Regulatory framework

Overview of the key legal sources, competent authorities and technical standards in Canada for FATCA (Model 1 IGA), the Common Reporting Standard (CRS) and the U.S. Qualified Intermediary (QI) regime – including interfaces and practice notes for banks and other financial institutions.

Key takeaways

  • FATCA is implemented in Canada through a Model 1 IGA: reporting to the Canada Revenue Agency (CRA), which exchanges data with the IRS.
  • CRS is implemented via Part XIX of the Income Tax Act: Canadian reporting financial institutions file with CRA, which exchanges with partner jurisdictions.
  • QI remains a U.S. regime (IRS), but relies on Canadian AML/KYC rules as approved KYC under the Canada-specific QI Attachment.

Who is in scope?

  • Banks, credit unions and trust & loan companies
  • Investment dealers, custodians, asset managers and investment funds
  • Life insurers with cash value or annuity products
  • Other entities classified as reporting financial institutions under FATCA/CRS

1) Legal sources (selected)

AreaSourceContent / focus
FATCA (treaty level) Canada–U.S. Enhanced Tax Information Exchange Agreement (Model 1 IGA) incl. Annex I/II Definitions, due diligence and reporting requirements; exemptions and deemed-compliant entities/products (Annex II), e.g. certain registered plans (TFSA, RDSP, RESP). Basis for automatic exchange of U.S. reportable accounts.
FATCA (domestic) Canada–United States Enhanced Tax Information Exchange Agreement Implementation Act (S.C. 2014, c. 20, s. 99);
Income Tax Act (ITA), Part XVIII – Enhanced International Information Reporting 		Domestic implementation of the IGA: reporting obligations of Canadian financial institutions, role of the CRA, timelines, penalties and confidentiality framework for information exchanged with the U.S.
CRS OECD Common Reporting Standard;
ITA, Part XIX – Common Reporting Standard;
CRA Guidance on the Common Reporting Standard 		Automatic exchange of financial account information with CRS partner jurisdictions; due-diligence rules for identifying non-resident account holders and controlling persons; annual Part XIX information returns to the CRA.
QI IRS QI Agreement;
Attachment for Canada to the QI Agreement (approved KYC rules) 		U.S. withholding tax and documentation framework for U.S.-source income; recognition of Canadian AML/KYC rules as acceptable documentary standards under the Canadian QI Attachment.
AML / KYC Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and Regulations;
FINTRAC guidance; selected OSFI guidelines 		Customer identification, ongoing monitoring and record-keeping obligations that underpin FATCA/CRS due diligence and QI reason-to-know assessments and documentation quality.
Data protection & confidentiality Personal Information Protection and Electronic Documents Act (PIPEDA);
ITA confidentiality provisions; CRA privacy impact assessments for Parts XVIII/XIX 		Legal basis and safeguards for collection, use and disclosure of tax and account information; limits on reuse, taxpayer notification, access and retention, including for information exchanged with foreign tax authorities.

2) Responsibilities and competent authorities

  • Canada Revenue Agency (CRA) – central authority for FATCA (Part XVIII) and CRS (Part XIX): registration and guidance for Canadian financial institutions, receipt and validation of XML returns, and automatic exchange of information with the IRS and CRS partner jurisdictions.
  • Department of Finance Canada – policy lead and sponsor of the Implementation Act and legislative amendments to the Income Tax Act relating to cross-border information exchange.
  • Office of the Superintendent of Financial Institutions (OSFI) – prudential supervision of federally regulated financial institutions; expectations on governance and controls that also affect FATCA/CRS/QI compliance frameworks.
  • FINTRAC – AML/ATF supervisor for reporting entities under the PCMLTFA; its client identification rules and guidance form the backbone of approved KYC for QI and support FATCA/CRS due diligence processes.
  • IRS (United States) – primary authority for the QI regime and FATCA registration/oversight of Canadian financial institutions: GIIN registration, QI/WP/WT agreements, periodic certifications and reviews.

3) Interfaces: FATCA ↔ CRS ↔ QI

  • Consistent data across regimes. US TINs, GIINs, residency indicators and entity classifications should align across FATCA (Part XVIII), CRS (Part XIX) and QI documentation to avoid mismatches between CRA and IRS data sets.
  • Registered plans and exemptions. Annex II to the IGA lists Canadian exempt products and entities (e.g. many registered plans and certain small local financial institutions) for FATCA purposes. Their treatment under CRS may differ and must be analysed separately.
  • Leveraging AML/KYC. Canadian AML/KYC rules under the PCMLTFA are recognised as approved KYC for QI. Institutions can rely on a single risk-based KYC framework, supplemented by FATCA/CRS-specific indicia checks and self-certifications.
  • Withholding vs. reporting. FATCA and QI both touch U.S. withholding tax, but from different angles: FATCA mainly drives reporting and potential withholding on non-participating entities, while QI governs documentation, treaty benefits and liability allocation along the chain of intermediaries.

4) Technical and operational standards (high level)

  • File format. FATCA and CRS reports are filed to CRA in prescribed XML formats based on OECD/IRS schemas and CRA-specific technical specifications, via secure electronic transmission channels.
  • Versioning & change management. Institutions should monitor updates to schemas, validation rules and CRA guidance, and maintain robust testing and deployment processes before changes go live in production.
  • Corrections and amendments. Procedures are required for filing corrected and amended returns (e.g. to fix US TINs, residency indicators or account balances) and for handling rejected files or records.
  • Governance & documentation. Clear policies, role descriptions, control testing and audit trails are essential to support CRA reviews, IRS QI periodic reviews and internal audit expectations.
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Note: This page provides a practice-oriented overview. The binding sources are the most recent official texts and guidance (Canada–U.S. IGA and Implementation Act, Income Tax Act Parts XVIII/XIX, CRA guidance, OECD CRS materials, the IRS QI Agreement and Canadian QI Attachment, as well as PCMLTFA/FINTRAC and OSFI publications).