Canada To Simplify Tax Court Rules

by Mike Godfrey, Tax-News.com, Washington

14 November 2011

The Canadian government has launched a consultation on proposals designed to improve the caseload management of the Tax Court of Canada.

The plans were unveiled by Jim Flaherty, the Minister of Finance, and Rob Nicholson, the Minister of Justice and Attorney General of Canada.

The proposals would update the monetary limits for access to the informal appeal procedure and are designed to provide taxpayers with greater access to a simplified and cost-effective judicial process and enabling a better balance in the Tax Court of Canada’s caseload.

Under the proposals, a taxpayer could elect to proceed by way of Informal Procedure (a simplified procedure designed to expedite tax cases) where the aggregate of all amounts in issue in an income tax appeal is equal to or less than CAD25,000 (USD24,460) (or where a loss does not exceed CAD50,000).

Also, under a new monetary limit for sales tax appeals, an appeal involving an amount in dispute in excess of CAD50,000 would be required to proceed by way of the General Procedure.

The proposals would also allow the Tax Court of Canada to dispose of issues raised in an appeal of an assessment separately, so that some issues can be resolved independently from others and to allow the Minister of National Revenue to give effect to the decision of the Court in respect of those discrete issues.

Additionally, the Tax Court of Canada would be permitted to hear a question affecting a group of two or more taxpayers that arises out of substantially similar transactions, and provide that the resulting judicial determination is binding across the group.

The closing date for submissions to the Department of Finance is December 16, 2011. Draft legislation to give effect to these proposals may also be released during the consultation period.

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