Source: Thorsteinssons LLP via International Law Office, 30 June 2017
“In BP Canada Energy Company v Minister of National Revenue (2017 FCA 61), the Federal Court of Appeal imposed important restrictions on the use of Section 231.1(1) audit powers by the Canada Revenue Agency (CRA).
In a statement issued on May 31 2017, the CRA announced that it would not seek leave to appeal that decision to the Supreme Court of Canada.
The statement concludes: “more can be done to find those who aggressively avoid or evade tax” and the close to C$1 billion investment that the government has made “enhances the CRA’s continued efforts to crack down on tax evasion and combat tax avoidance”.
This focus of the CRA was reinforced by a news release, entitled “Minister Lebouthillier Updates Canadians the Government’s Progress to Crack Down on Tax Cheats”, which was issued the following day (June 1 2017). In the news release, the minister stated:
“[T]oo many corporations and wealthy individuals are trying to find ways to not pay what they owe. This is why the Government of Canada has committed important resources to crack down on tax cheats, both at home and abroad.”
The news release concluded with another affirmation of the firm intention to “detect, audit, and combat illegal tax evasion and aggressive tax avoidance”.
Taxpayers should understand that, now more than ever, the sharp focus of the CRA is to:
- gather information from the taxpayer;
- gather information from domestic and international sources; and
- find those who aggressively avoid or evade tax.