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Canada Receives Recommends For Tax Compliance Action

by Mike Godfrey,, Washington

31 October 2016

Canada's Standing Committee on Finance has published its report on the Canada Revenue Agency's (CRA's) efforts to tackle tax avoidance and tax evasion.

The Committee held hearings in May and June, covering tax avoidance and evasion, the CRA's tax compliance activities, enforcement and prosecution processes, and a number of international initiatives to address these issues.

The Committee's 14 recommendations were as follows:

  • That the Revenue Minister conduct a comprehensive review of the advance tax ruling process, identifying ways in which efficiency and timeliness can be improved, costs reduced, and effectiveness increased;
  • That the Revenue Minister require tax advisors operating in Canada to register all of their tax products with the CRA;
  • That the CRA review its Voluntary Disclosures Program and the guidelines that are used to determine whether to pursue litigation or to seek a settlement with individuals or organizations that have engaged in tax avoidance or evasion;
  • That the Revenue Minister strengthen protections for individuals under the Informant Leads Program and Offshore Tax Informant Program;
  • That the Revenue Minister report to the Committee on the progress of audits conducted in relation to the "Panama Papers" by June 1, 2017;
  • That the CRA enhance its technical, human resource and other capabilities in respect of domestic and international aggressive tax planning;
  • That the Revenue Minister ensure the CRA calculates the federal tax gap on an ongoing basis;
  • That the federal Government accelerate its review of the Income Tax Act and implement initiatives aimed at simplifying the income tax system;
  • That the federal Government take steps to improve coordination between the CRA and the Department of Justice;
  • That the Revenue Minister establish a regular reporting program for the CRA that would facilitate the public availability of statistical information about anti-avoidance and anti-evasion enforcement efforts;
  • That the federal government review Canada's double tax and tax information exchange agreements to ensure that they do not facilitate non-compliance;
  • That the Revenue Minister address offshore non-compliance through greater collaboration with other jurisdictions;
  • That the CRA take a leading role in ensuring the global implementation of the recommendations made as part of the OECD's BEPs project; and
  • That the Revenue Minister review the CRA's code of conduct for current employees and employees who are leaving the Agency.

Committee Chair Wayne Easter said: "I know that I speak on behalf of all House Finance Committee members in expressing our hope that the 14 recommendations contained in the Committee's report on the Canada Revenue Agency, tax avoidance, and tax evasion will lead to timely federal actions. Certainly, everyone should pay their fair shar in taxes in our report will hopefully ensure that this is the case. As well, it's important that Canada continue to contribute to global efforts, and work with international partners, in ensuring that all taxpayers fully meet their tax obligations.

TAGS: individuals | compliance | Offshore | tax | business | tax compliance | tax avoidance | government committee | employees | audit | enforcement | tax authority | offshore | agreements | tax planning | transfer pricing | Canada | Panama | Tax | Tax Evasion

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