TORONTO, Nov. 19, 2013 /CNW/ - A new white paper by the Chartered
Professional Accountants of Canada (CPA Canada) clarifies confusion in
the public debate about tax evasion, tax avoidance and corporate income
tax and its effect on business.
"Attitudes and expectations are changing, both in Canada and
internationally, so it is important they be addressed," says Kevin
Dancey, FCPA, FCA president and CEO, CPA Canada. "Not only does the
white paper provide greater clarity relating to the issues but it also
provides recommendations to help Canada's corporate tax system work as
efficiently as possible."
CPA Canada believes enhanced relationships based on more transparency,
cooperation and trust among tax authorities, businesses and tax
advisors should help strengthen the country's tax system. "We recommend
that the federal government consult with the affected parties on the
potential benefits that enhanced relationships and increased
transparency may offer," says Dancey.
The white paper acknowledges that tax planning, both at home and abroad,
is not always black and white. The domestic and international tax
systems are highly complex and there is considerable confusion in the
public domain over what tax evasion actually means and what is
acceptable tax planning.
"Illegal tax evasion is harmful to economies and must be prevented,"
explains Gabe Hayos, FCPA, FCA, vice-president, taxation, CPA
Canada. "However, legal tax planning by businesses should be accepted
as a means of reducing costs. Corporations should be expected to make
legal use of low tax rates or other tax incentives that countries offer
to compete for foreign investment."
The white paper acknowledges that grey areas can emerge. A company's tax
planning may be technically legal but a revenue authority could view
the action as going against the object and spirit of the law. These
situations often require the involvement of the tax courts and policy
makers to help resolve the dispute. Both the taxpayer and revenue
authority would benefit from avoiding such disputes which can be long
The Organisation for Economic Co-operation and Development is working on
the G20's behalf to develop global solutions to stop tax evasion,
increase tax transparency and information sharing, and modernize
international tax laws. "Canada and its corporate taxpayers need to be
part of the process to ensure that our competitive position is
maintained and recommended solutions are addressed from a Canadian
perspective," says Hayos.
The white paper also outlines several steps that Canada can take now to
improve its tax system. These include:
Keeping corporate income tax rates low
Tightening the focus of specific anti-avoidance rules
Rethinking the corporate income/consumption tax mix
Using tax policy to help Canadian businesses compete
Pursuing more international Tax Information Exchange Agreements.
CPA Canada will share its white paper with representatives from
government, key tax stakeholders and other national and international
associations and organizations.
For more information about CPA Canada's white paper Corporate tax evasion, avoidance and competition: Analyzing the issues
and proposing solutions visit www.cpacanada.ca/taxevasion.
About CPA Canada
CPA Canada is the national organization established to support
unification of the Canadian accounting profession under the Chartered
Professional Accountant (CPA) designation. It was created by the
Canadian Institute of Chartered Accountants (CICA) and The Society of
Management Accountants of Canada (CMA Canada) to provide services to
all CPA, CA, CMA and CGA accounting bodies that have unified or are
committed to unification. As part of the unification effort, CPA Canada
and the Certified General Accountants Association of Canada
(CGA-Canada) are working toward integrating their operations.
Unification will enhance the influence, relevance and contribution of
the Canadian accounting profession both at home and internationally.
SOURCE: CPA Canada
For further information:
or to arrange an interview, contact:
Tobin Lambie, principal, media