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China and Canada will exchange tax and financial information for the first time this fall, a move that will give Canadian authorities a window into the activities of some foreign-property owners who evade Canadian taxes in real estate markets such as Vancouver.

The exchange will also give Chinese authorities an ability to track down economic fugitives in Canada.

“It’s valuable for Canada because it gives [the country] more access to more personal financial information than ever before from China,” said Richard Kurland, a Vancouver immigration lawyer who described the development as “huge.”

In the past, China has been dragging its feet to open its accounts on people’s financial information to Canada and other countries, Mr. Kurland said. The information would include bank account information, such as transactions and balances.

The exchange is part of a move by more than 100 jurisdictions in the world that have committed to implementing the Common Reporting Standard, a global agreement for the automatic exchange of tax and financial-account information. The agreements are aimed at combatting tax avoidance and evasion.

Under the standard, all participating countries will require financial institutions to identify financial accounts held by customers who are non-residents for tax purposes and to report these accounts to the customers’ home tax authorities on an annual basis.

Already, Canada has such an arrangement with 61 other countries. China will be among the new partners, starting in September.

China will get the same information in return about its citizens living in Canada, noted University of British Columbia geography professor David Ley, who is also an expert in immigration and housing markets.

“The Chinese are certainly keen to quite vigorously pursue criminal cases, cases where there are claims that people have left China having committed fraud or some other crimes. I think anything that provides a greater prospective of detection will be an interest to China.”

But this could put some residents who run afoul of Chinese law at risk.

“It’s quite possible that people who have difficulties with the Chinese government could be more exposed,” Prof. Ley said.

Carol Dai, accountant and investment immigration tax planning expert in Toronto, said Chinese residents for tax purposes will be more cautious when transferring money overseas and won’t dare to deposit a large amount of money in foreign banks.

She noted some of her clients who are from China are now facing a “dilemma.”

“[They] don’t want to be a Canadian tax resident and pay taxes here, neither do they want their tax information to be exchanged to China.”

Ontario-based accountant Wei Hua has a number of high-net-worth clients who are Canadian residents, but have assets or income overseas.

He noted he has seen an increase in the willingness of these clients to claim their overseas assets and income voluntarily to the Canada Revenue Agency.

“If they fail to claim their overseas assets and incomes, then they are going to face various penalties,” Mr. Hua said.

Prof. Ley said the exchange will be a benefit to Canada.

A Globe and Mail investigation had found that many wealthy foreign families buying Vancouver real estate pay little or no income or capital-gains tax.

The investigation found that these foreign investors declared low incomes despite buying millions of dollars’ worth of property in the names of their spouses and children here, and that they use residency rules to avoid paying capital-gains taxes.

CRA rules say a non-resident who buys and sells Canadian property must pay capital gains and other taxes on earnings from those investments. If the investor has a primary residence and family living in Canada, the investor must file resident tax returns and report all income.

“If Canada is able to share tax records with other countries for Canadian taxpayers, it can access income-generating activities in those countries by Canadian taxpayers that need to be included in Canadian tax returns. In the past, the CRA has had difficulty in accessing this information in China,” Prof. Ley said.

He said the tax-information exchange could result in a cooling of the Vancouver real estate market.

Mr. Kurland agreed. He said that in the short run, before the exchange takes effect, people who failed to properly disclose their transactions will be worried about being discovered and will be motivated to sell their properties.

“If they’re in the position to just sell and take their money away, even if the transactions subsequently are discovered, no one can do anything about it because the person and cash have left town,” Mr. Kurland said. “[The sellers] would rather take a slight loss than risk losing everything. And so that should drag down prices.”

CRA stated in an e-mail to The Globe that there is no legal limit to how far back it can go in cases where a taxpayer intentionally failed to report income or failed to file a return.

The normal reassessment period for most taxpayers is three years, it said, but that can be extended to six years in certain cases, notably where international transactions are involved.

David Chodikoff, a Toronto tax lawyer, wasn’t convinced that the financial-information sharing will lead to better compliance.

“It’s hard to predict what’s going to happen because of how the information will be reviewed, how the information will be used and whether or not there’s a real effort to pursue once that information is obtained, we don’t know yet.”

He was equally skeptical that the agreement will halt foreign investment in the housing market.

B.C.’s Finance Ministry said in an e-mail that the new standard will help enforcement around its tax on vacant properties and its increased foreign-buyers tax.

“We are hopeful that this information-sharing arrangement between China and the federal government will support our auditing activities in B.C., particularly around the new speculation tax and the foreign-buyers tax.”