Call Us: By: Christian Janisse May 28, Share This Post. Categories: Canada. By: Legal Focus. July 9, By: Caitlin Zeran. July 7, The CRA is ramping up transfer pricing audits and scrutinizing Canadian taxpayers who buy or sell goods or services with another entity within the same multinational group to determine if these transactions are priced properly.
Over the last decade the media has spotlighted the use and misuse of international treaties to reduce or avoid taxes. The international tax community has been working to close loopholes and tighten up treaty language to reduce aggressive tax avoidance and evasion. The CRA is increasing its scrutinization of cross-border transactions involving the application of treaties that result in distorted and questionable tax positions. It is increasing its audits of large businesses identified as having a high risk of non-compliance and others operating in industries considered high risk, such as the real estate development industry.
Recently, there has been an uptick in the CRA auditing the use by officers and employees of corporate assets, such as private jets and yachts. If business is being conducted on these assets, the taxpayer needs to gather contemporaneous documents and maintain accurate log books to support their filing positions. This applies to lawyers, staff, clients, service providers and other visitors. Tax Law Bulletin. The auditor explains what is expected during the audit. The taxpayer should also communicate to the auditor what is expected.
The taxpayer may indicate that the auditor must deal with a specific person so that the entire organization does not end up working for the auditor. Fieldwork: The on-site audit is the fieldwork stage. The fieldwork can take place over a few days or over a lengthy period of time. Follow-up questions: It is common for the CRA auditor to contact the taxpayer after the fieldwork stage of the audit.
Sometimes additional documents are requested.
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