27 October 1989 Income Tax Severed Letter ACC8525 - IFA Stockholm Conference

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

19(1)                         E.E. Campbell
                              (613)957-2067

October 27, 1989

19(1)

Re: IFA Stockholm Conference

We have your letter of October 5, 1989 with the enclosed material relating to the above conference.

As noted in the conversation between yourself and Mr. Campbell, in reviewing the material we did not approach it from the basis of a critique. We might very well take issue on some points raised by you in the interpretation of the conventions and the relevant provisions. However, you are clearly entitled to take the position outlined. As discussed with yourself and Mr. Potechin there is little law on the points raised herein.

We expressed some concern over certain points in the main paper, because we believed they were not accurate. You indicated that you appreciated the concerns raised. Specifically, they were the following.

1.       On page 3 the simultaneous audit program should be
         clarified.  The United States would appear to be the
         only partner in such an activity, although industry
         studies may very well be discussed with others.

2.       On page 4, at the bottom of the page it was indicated
         that automatic exchanges are handled at the district
         level.  This is not so as these exchanges are made from
         Ottawa.  The NR4s are brought together and the
         appropriate ones selected form the mass for transmission
         under the tax convention.

3.       On page 18, reference was made to our auditors going to
         the other country.  This may be some what confusing. 
         When we request information under the tax convention we
         might also ask permission for our auditors to go to the
         other country to assist the person gathering the
         information. 
         The Canadian auditors would have no powers and would be
         present with the permission of the person whose records
         are being scrutinized.  We also have the situation where
         a Canadian taxpayer may have the books in the United
         States in which case the Canadian either repatriates the
         records or we go to look at them in the United States. 
         In that case we are auditing canadian books and records.

The paper which you have prepared is interesting and raises many intriguing points. We look forward to the outcome of the IFA Conference and the information on this topic which will be generated.

Yours sincerely,

C. Savage A/Director Provincial and International Relations Division

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