December 23, 2016
Canada Revenue Agency’s Voluntary Disclosures Program has come under scrutiny in a report by the Offshore Compliance Advisory Committee. According to a Bloomberg article, the committee’s proposal to remove CRA’s program from transfer pricing cases has been met with criticism from tax experts, including partner John Tobin, who was sought by Bloomberg for comment on this development. Below is an excerpt of the article.
The Offshore Compliance Advisory Committee’s one-line reference to transfer pricing, based on a desire to maintain the overall purpose and objectives of voluntary disclosure, doesn’t justify ending the program’s use in transfer pricing cases, said John Tobin, a tax partner in the Toronto office of Torys LLP.
Even accepting the committee’s thesis that taxpayers with a high degree of culpability shouldn’t receive incentives doesn’t justify that, Tobin told Bloomberg BNA in an e-mail. “Transfer pricing is no different a matter of compliance than any other reporting of income,” he said. “Merely because multinationals may make use of the program does not seem justification to wholly exclude it.”
Like other measures being adopted in response to the Organization for Economic Cooperation and Development’s recommendations to combat tax base erosion and profit shifting, the limits proposed on voluntary disclosure seem excessive, he said.
Read the full article here.