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Committee Reports On Canadian Anti-Avoidance Initiatives

Wednesday, May 8, 2013

A committee of Canadian lawmakers has released a study of tax evasion and the use of so-called tax havens that it says can form a basis for new measures to tackle such activities.

The House of Commons Standing Committee on Finance resumed its study of tax evasion and international tax planning last year, examining the use of offshore accounts, the efforts made by the Canada Revenue Agency (CRA) to recover unpaid tax, and the Government's strategy for combatting tax evasion. It held 14 meetings for the study, and heard from 26 organizations and 10 individuals.

The Committee's report contains the following 11 recommendations:

  • That the federal Government continues to pursue tax information exchange agreements with appropriate countries.
  • That the federal Government provides the Revenue Minister with more authority to obtain business identification information.
  • That the federal Government follows up on the Budget 2013 proposal to establish a whistle-blower program that enables the CRA to reward individuals for information on non-compliance.
  • That the federal Government requires all entities obliged to report under money laundering legislation to obtain information about the beneficial ownership of customers that are corporations, trusts, or other entities.
  • That the federal Government continues to support the G20 finance ministers and central bank governors in their efforts to develop measures to address base erosion and profit shifting.
  • That the federal Government continues to encourage all jurisdictions to sign the multilateral Convention on Mutual Administrative Assistance in Tax Matters and to support the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
  • That the federal Government ensures the clear messaging of ongoing efforts to ensure fairness and transparency in the tax system.
  • That the federal Government continues to examine proposals to improve the caseload management of the Tax Court of Canada.
  • That the CRA commits to applying the General Anti-Avoidance Rule to aggressive international tax planning.
  • That the federal Government creates an efficient system for identifying and closing tax loopholes.
  • That the CRA extends the time period during which the names of those convicted of either tax evasion or a failure to file are listed on its website, from six months to one year.

Committee chair James Rajotte commented: "This report has given the Committee an opportunity to learn about aggressive tax planning and tax evasion in both the domestic and international contexts. I am pleased that our Committee's study of tax evasion and the use of tax havens, and the subsequent report and its recommendations, can form the basis for new measures to prevent aggressive tax planning and tax evasion."