Joint Committee provides its submissions on the proposed VDP revisions

The Joint Committee has provided its submissions to CRA respecting the proposed narrowing of the voluntary disclosure program, including:

  • Proposals, such as that large corporations, or those with inappropriate transfer prices, no longer qualify for full VDP relief, may amount to an impermissible fettering of the Minister’s s. 220(3.1) discretion. In any event, errors by large corporations typically are attributable to the number and complexity of the tax-reporting issues faced by them, so that their exclusion would violate fundamental principles of fairness – as does the blanket denial of relief to taxpayers respecting transfer pricing errors.
  • Respecting the proposed 2-tier system, the references to large dollar amounts, multiple years of noncompliance and a sophisticated taxpayer should be removed as these factors do not of themselves indicate culpable conduct.
  • Elimination of the No-Name disclosure method would create greater uncertainty, thereby reducing the numbers of disclosures.

The Committee also queries carryforwards to the proposed Circular of debatable aspects of the current Circular:

  • The “beyond the taxpayer’s control” criterion for accepting a second disclosure should not apply to unrelated issues.
  • Eliminating the requirement - that the disclosed information be at least one year past due - would eliminate the inequity of a taxpayer who delays addressing an error being treated more favourably than one who corrects it more quickly –and abuses would be addressed by declining repeated disclosures respecting the same avoidable issue.

Neal Armstrong. Summary of 8 August 2017 Joint Committee Submission to Finance respecting the Voluntary Disclosure Program under s. 220(3.1).