One of the important roles of tax advisors is to be continually aware of the forces at play that may impact tax changes for clients. Over the last number of months, there have been no shortage of forces that will ultimately impact many clients.
As an example, governments around the world appear to be serious about catching persons who engage in tax evasion or inappropriate tax avoidance. Yesterday, the OECD released a significant document which outlines proposals to establish automatic exchange of information for tax purposes as the new international standard for tax cooperation in an attempt to catch tax evasion or inappropriate tax avoidance. The obvious question is, what is inappropriate tax avoidance? That is a tough question to answer and a topic for another day.
Canada’s 2013 Federal Budget is another document confirming the intention to increase measures to “crack down” on tax evasion. As a follow up to the Budget, the Department of Finance announced on August 12, 2013 that it was inviting comments on possible measures to prevent treaty shopping. Treaty shopping (essentially the use of jurisdictions based on the benefits of their tax treaties) has been used over the years in certain tax avoidance planning.
In Tax Tip 13-06 we discussed how governments are already collaborating to assist with tax debt collection.
The proposed changes to the use of graduated tax rates by testamentary trusts and long term estates (Tax Tip 13-11) are also significant, as are recent informal but problematic changes to Canada's voluntary disclosures program. Tax Tip 13-09 describes the expanded foreign reporting requirements recently released in Canada.
The above examples provide just a taste of some of the more significant forces that are impacting change in the tax world (domestically and internationally).
Your TSG representatives aggressively stay on top of and monitor such developments and would be pleased to discuss how such forces might impact you.
TAX TIP OF THE WEEK is provided as a free service to clients and friends of the Tax Specialist Group member firms. The Tax Specialist Group is a national affiliation of firms who specialize in providing tax consulting services to other professionals, businesses and high net worth individuals on Canadian and international tax matters and tax disputes.