INTERNATIONAL TAX RULES — MASSIVE CHANGES
The international tax law has been subject to massive upheaval in the past few years.
For example, foreign bank secrecy has disappeared. Over 100 countries now exchange financial information with each other, so if you (with a Canadian address) have a significant bank account in, say, France, the French government will send details of that account to the CRA, and of course the CRA does the same for French residents with accounts in Canadian financial institutions. This is done using something called the "Common Reporting Standard”, coordinated by the OECD.
Another major change just took place in Canada. The government signed and ratified the “Multilateral Convention to Implement Tax Treaty Related Measures”. This convention, known as the “MLI” (multilateral instrument), effectively amends most of Canada’s tax treaties to limit how they can be used for “inappropriate” tax planning. It operates to amend the tax treaty between each pair of countries that signs on; so far 94 countries have signed, though the MLI is not yet in force in all of them (each country has to ratify the agreement by passing legislation, and then must notify the OECD that it has done so and how it wants the MLI to apply). For Canada, 24 of its treaties have changes that took effect January 1, 2020. Most of these changes implement various anti-avoidance rules, in ways that can operate differently for each treaty depending on that treaty’s terms.
If you are involved in any transactions or investments that make use of tax treaties, you should find out whether the MLI affects you. (Canada’s tax treaty with the United States is not affected, as the U.S. decided that its treaties already contain the necessary anti-avoidance provisions.)