Principal Issues: (1) Can the CRA provide examples of “indirect” distributions as referred to in paragraph 9.54 of the CRA’s Guidance on the Common Reporting Standard? (2) Would the CRA consider any contributor to the trust as a “settlor” for purposes of Part XIX of the Act?
Position: (1) The response to OECD CRS-FAQ - SECTION VIII: DEFINITIONS - C. FINANCIAL ACCOUNT Question 11 provides examples of what constitute indirect distributions by a trust. (2) For Canadian law purposes the concept of settlor generally refers to the person who set up the trust by contributing property to the trust. On that basis, the question of whether a specific contributor is the settlor of a particular trust for the purposes of the definition of “controlling persons” in subsection 270(1) is generally a question of law to be determined in light of the relevant facts and circumstances.
Reasons: Subsection 270(2) provides that the provisions of Part XIX of the ITA relate to the implementation of the Common Reporting Standard set out in the Standard for Automatic Exchange of Financial Account Information in Tax Matters approved by the Council of the OECD and, unless the context otherwise requires, these provisions are to be interpreted consistently with the Common Reporting Standard, as amended from time to time.
