Report On Recent Developments – Feb 2014

Canada and U.S. reach agreement on FATCA

Canada and the U.S. have recently signed an intergovernmental agreement (“IGA”) regarding the Foreign Account Tax Compliance Act (“FATCA”). The U.S. enacted FATCA to require non-U.S. financial institutions to report accounts held by U.S. persons (U.S residents and U.S. citizens, including dual citizens or residents of other countries) to the Internal Revenue Service (“IRS”).

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REVENU QUÉBEC REACHES CONCLUSION IN JOINT VENTURE/PRÊTE-NOM AUDIT PROJECT

In 2013, Revenu Québec (“RQ”) initiated an audit project to examine prête-nom companies’ entitlement to claim tax credits in respect of GST/QST.

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WHISTLE-BLOWER UPDATE

The 2013 federal budget included the introduction of a formal whistle-blowing initiative for international transactions that avoid Canadian tax, called the Offshore Tax Informant Program (OTIP). A whistle- blower will be compensated for information leading to assessments of tax in excess of $100,000. The CRA has established a “snitch line” where individuals can call to provide the CRA with information to see if it qualifies for the OTIP.

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