Question Period Note: TAX EVASION AND AVOIDANCE – OVERVIEW

Can the Minister tell us more about Canada Revenue Agency’s efforts to combat tax evasion and avoidance?ster tell us more about Canada Revenue Agency’s efforts to combat
tax evasion and avoidance?

• Tax evasion and aggressive tax avoidance are complex matters of global concern.

• The Canada Revenue Agency (Agency) is leveraging better data and new approaches for better results.

• The Agency is making progress in its efforts to combat tax evasion and avoidance in the following ways:

Country-by-country reporting
• Country-by country reporting by multinational enterprises and individuals are now received automatically every year.

High Net Worth Taxpayers

• The CRA’s audit function devotes significant attention to multinational enterprises and high net worth individuals; more than a third of its audit resources are responsible for scrutinizing high income earners.
• The CRA has identified $4.5B more non-compliance in fiscal 2018 2019 than in 2013-2014, with more than half resulting from large business and aggressive tax planning audits.

Criminal Investigations

• One third of the CRA’s current inventory of criminal investigations have an offshore element. As these over 50 cases mature, the Agency expects that the convictions will increasingly reflect this focused approach.

International cooperation

• International cooperation is key to these efforts, and the CRA plays key leadership roles with the OECD’s Forum on Tax Administration and JITSIC.

The Canada Revenue Agency (CRA) has increased its focus on aggressive non-compliance through increased audit coverage, better data, and new approaches to identifying and targeting compliance efforts.

The majority of Canadian taxpayers are compliant and pay their fair share of taxes, and expect others to do the same. Meanwhile, a minority of taxpayers make small, unintentional errors in their tax returns, which the CRA addresses through education and services. However, a small segment of the population knowingly challenges and tests the limits of the Canadian tax system.

The CRA has increased collaboration with international partners and has a leadership role in a number of initiatives of the Organization for Economic Co-operation and Development (OECD) Forum on Tax Administration (FTA). The CRA is working with G7 and G20 and the OECD’s Joint International Taskforce on Shared Intelligence and Collaboration, to exchange information that will help tackle tax avoidance and harmful tax practices. In addition, the CRA’s Commissioner is currently vice chair of the OECD FTA and sponsors the Large Business and International Programme.

The communication and transparency of CRA’s compliance work has also improved; Tax Gap reports were released, the number of media responses and interviews increased, and pre-judgment releases of information related to criminal tax evasion cases were initiated.

Canada, Australia, China, France, Germany, Korea, Japan, the United Kingdom, and the United States are members of a joint task force to increase collaboration and coordinate information about abusive tax transactions. This Joint International Tax Shelter Information and Collaboration (JITSIC) constitutes a very important tool for the CRA in its domestic and international work in addressing abusive tax avoidance schemes. JITSIC's key function is to gather and share information concerning a specific taxpayer or set of taxpayers.

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