Section 274 — Income Tax Act: Due diligence – new individual accounts

Upon opening a new individual account, the reporting financial institution must obtain a self-certification (which may be a part of the account opening documentation) that allows the reporting financial institution to determine the account holder’s residence for tax purposes; and confirm the reasonableness of the self-certification taking into account information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected in accordance with the AML/KYC procedures. If the self-certification for a new individual account establishes that the account holder is resident for tax purposes in a reportable jurisdiction, then the reporting financial institution must treat the account as a reportable account; and the self-certification must also include the account holder’s TIN with respect to the reportable jurisdiction (subject to subsection 271(4)) and the account holder’s date of birth. If there is a change in circumstances with respect to a new individual account that causes the reporting financial institution to know, or have reason to know, that the original self-certification is incorrect or unreliable, then the reporting financial institution cannot rely on the original self-certification; and must obtain a valid self-certification that establishes the residence for tax purposes of the account holder.