Vern Krishna: U.S. steps up tax enforcement beyond its borders

Vern Krishna is tax counsel with Borden Ladner Gervais LLP and executive director of the Tax Research Centre at the University of Ottawa (Common Law).

Financial Post | Business

As of July 1, the United States will tighten the tax noose around the necks of Canadian citizens living in Canada and anyone else whom it considers to be “U.S. persons” for tax purposes. The Canada Revenue Agency will assist the U.S. by kicking away the stool on which they stand. All of this intrusion into our sovereignty is in the name of curtailing so-called “aggressive tax avoidance.”

Tax avoidance is as old as taxes. Our courts tell us that tax minimization is quite legitimate, but governments say that “aggressive” tax avoidance is not, and they are stepping up efforts to collect information from international sources, financial institutions, whistle blowers, and even criminals who have stolen information. Canada now has in force 18 Tax Information Exchange Agreements (TIEAs) with other jurisdictions. It has signed four other TIEAs that are not yet in force, and is negotiating a further eight with…

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