Personal Finance

New chequing account and tax residency form ?

  • Last Updated:
  • May 31st, 2019 1:27 pm
Banned
Apr 5, 2019
112 posts
94 upvotes

New chequing account and tax residency form ?

So went to open a new chequing account for my daughter. (Not savings and 0 interest will be applicable)

It was all good until she was asked to sign a tax form.- Declaration of Tax Residence for Entities – Part XVIII and Part XIX of the Income Tax Act.

I politely declined not proceed with the application until I get confirmation about our obligation to sign it . (my past experience I had signed none.)

My question is -
Is it a legal requirement and mandatory ? (My personal rule - If its not required then I will not provide)

I am thinking along the lines of SIN requirement which is not mandatory but the banks are keen on data mining.
11 replies
Deal Addict
Sep 19, 2009
2280 posts
991 upvotes
Toronto
Is it a legal requirement.

https://www.canada.ca/content/dam/cra-a ... 19-18e.pdf
• If you are an entity and you are planning to open a financial account or if you already have a financial account with a Canadian financial institution, it may ask you to fill out this or a similar form. For more information on how to fill out this form, see the General information section at the end of the form. You will also find in that section the definitions of terms we use on the form
• Canadian financial institutions are required under Part XVIII and Part XIX of the Income Tax Act to collect the information you provide on this form to determine if they have to report your financial account to the Canada Revenue Agency (CRA). The CRA may share that information with the government of a foreign jurisdiction that a person identified on this form is a resident of for tax purposes. In the case of the United States, the CRA may also share the information with that country’s government if the person is a U.S. citizen. You can ask your financial institution if it reported your financial account to the CRA and what information it gave
Deal Addict
May 12, 2014
3487 posts
3895 upvotes
Montreal
Due to the new laws, you are required to fill this out. This is because if there are indicia of links to another country (eg born in the USA) your account information will be sent to that other country and you'll possibly be taxed there too.
Jr. Member
Mar 22, 2019
109 posts
55 upvotes
Yes, it's legal & mandatory. I was asked to sign this form when I opened a new chequing account & when I made changes to my existing account.
Deal Addict
User avatar
Jan 15, 2017
2365 posts
1755 upvotes
The government isn't just making sure the $100 the account earned in interest gets taxed. They are more interested in the potential for you to put large sums of $$$ in the account, possibly related to money laundering.
Deal Addict
Jan 30, 2012
1836 posts
1399 upvotes
TORONTO
Wraith2China wrote: It was all good until she was asked to sign a tax form.- Declaration of Tax Residence for Entities – Part XVIII and Part XIX of the Income Tax Act.
That doesn't make sense. The form says:
For this form, an entity includes a corporation, a partnership, a trust, an association, a fund, a joint venture, an organization, a syndicate, or a foundation
I strongly suspect your daughter is a human being and not "a corporation, a partnership, a trust, an association, a fund, a joint venture, an organization, a syndicate, or a foundation"

I suspect something else is going on... maybe it was a different form, or are you opening an account for your daughter's company?
Deal Addict
User avatar
Jan 15, 2017
2365 posts
1755 upvotes
M8Rxmjsik wrote: That doesn't make sense. The form says:



I strongly suspect your daughter is a human being and not "a corporation, a partnership, a trust, an association, a fund, a joint venture, an organization, a syndicate, or a foundation"

I suspect something else is going on... maybe it was a different form, or are you opening an account for your daughter's company?
There is a similar form for individuals. Maybe the bank just gave them the wrong form.
Banned
Apr 5, 2019
112 posts
94 upvotes
MMJmeow wrote: Yes, it's legal & mandatory. I was asked to sign this form when I opened a new chequing account & when I made changes to my existing account.
I dont mind signing any form as required by the law but I have bad experiences where there had been breach of trust.
Basically I used to sign docs giving benefit of doubt and keeping up the good faith, when I dealt with banks. I used to feel uncomfortable reading all the terms and condition infront of an employee. Instead I used to have a quick glance and skim throgh them quickly before I sign.

But over the years I had issues where new financial accounts were opened, account switch were made, upgrades to premium subscription etc were made bank employees without my prior knowledge when I signed forms. Once signed, implied consent comes into action when employees failed to make disclosure that they are planning to do so at it least in case of new financial accounts without the knowledge of applicant. This is serious as the applicant is not aware of the new account and the bank employee tha use it for any purpose, But if things had gone sour then I would have got a notice about the account that I would have been never aware of which has a lot of implications other than just money where bank employees switched me to premium fee tier of the same account without consent.

Hence, every time I do business, if they can accomodate the following request before I proceed or else I just move to do business with somebody else:-
1) I ask them to provide me a single paper copy ,
2)If they mind that I will read them thoroughly which will take some time.
3) Finally,ask them to give a photcopy of the original that I signed. (Not 2 copies of original each as I cant read both to verify)

I know that I am being anal, but behind the smile and that lovey dovey CSR, humans cannot be trusted. Plus based on my bad experiences, I have my excuse to be better safe than sorry.
Last edited by Wraith2China on May 30th, 2019 7:27 pm, edited 3 times in total.
Banned
Apr 5, 2019
112 posts
94 upvotes
taxrage wrote: There is a similar form for individuals. Maybe the bank just gave them the wrong form.
Yes I called & they confirmed that it was meant for individuals but they gave the wrong form.

But we went to another bank but she was not asked any form to sign from CRA so I dont know whats up with thois form as when its mandatory but some banks ask about it whereas as some dont.
Jr. Member
Mar 22, 2019
109 posts
55 upvotes
Wraith2China wrote:

"1) I ask them to provide me a single paper copy ,
2)If they mind that I will read them thoroughly which will take some time.
3) Finally,ask them to give a photcopy of the original that I signed. (Not 2 copies of original each as I cant read both to verify)"
Yes, they read out what's on the form to me and gave ample time for me to read it thoroughly myself before I signed, then gave me a copy of my signed form on my request.

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