The federal government is continuing to increase auditing resources for the Canada Revenue Agency's (CRA) international compliance programs, says Canada’s Minister of National Revenue Gail Shea.
The 2013 federal budget continues to build on the government’s efforts and will provide the CRA with an unprecedented ability to crack down on international tax evasion and aggressive international tax avoidance, she says.
Since 2006, the number of audit positions in the CRA's international audit program has increased by nearly 40 per cent. The number of audit positions in the CRA's aggressive tax planning program has nearly doubled.
The mandate of the international audit program is to ensure compliance with tax provisions and treaties administered by the CRA that relate to international cross-border transactions between related parties. It fulfills this mandate through the use of education, intelligence-gathering, audits, and other actions. The role of the aggressive tax planning program is to examine transactions suspected of circumventing the law or its intent and to deter abusive transactions. The program has a focus on the abusive use of tax havens and international transactions.
The following measures were also announced in the federal budget to crack down on international tax evasion and aggressive international tax avoidance:
• Launching a new stop international tax evasion program that will allow the CRA to pay individuals with knowledge of major international tax non-compliance a percentage of federal tax collected as a result of the information provided.
• Requiring financial institutions and others who currently report information on international electronic funds transfers greater than $10,000 to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to also report those transactions to the CRA.
• Streamlining the judicial process that provides the CRA authorization to obtain information from third parties, such as banks. This measure will facilitate faster access to information on unnamed individuals for the purposes of civil actions.
• Introducing additional requirements for Canadian taxpayers with foreign income or properties to report more detailed information, and extending the amount of time the CRA has to reassess those who have not properly reported this income.