Wednesday, April 18, 2012

Canada's Mutual Agreement Program

Just like its equivalent in the US, the Canada Revenue Agency seems to have begun to publish annual statistics on its mutual agreement program--the treaty-based diplomatic regime under which the government agrees on revenue allocations with other governments--only after a long information disclosure battle.  In Canada, the credit for transparency in the MAP program goes to David Sherman, who spent six years in the Courts only to eventually pry the most meager amount of information out of the CRA.

But Mr. Sherman's battle seems to have been productive for the rest of us: now we have a series of annual reports being published by the CRA, and generally with more information than that available in the IRS counterpart, which of course we can't even find.  Yes, that's another difference compared to the IRS counterpart: these statistics are actually available online, and not just to big four accounting firms.

However, I've not yet found a place where they are compiled together nicely with links; instead, I've had to google search them.  So, for David Sherman and for all of us benefitting from his hard work on transparency in the tax system, here they are:

First Report--2001-2004

Notice that the first report was issued in 2005 and covered 2001-2004 only; Mr. Sherman's initial lawsuit sought information for 1995 through 1998, and he made a subsequent request for information from 1999-2004.  The information exists but the CRA just hasn't bothered to compile it.  That's too bad.  But on the other hand the CRA is light years ahead of the IRS on this.

Addendum: David Sherman advises me that his lawsuit sought disclosure of CRA to USA requests in connection with the assistance in collection provisions of the tax treaty, and not in connection with taxpayer-initiated competent authority actions; only the latter are disclosed in these MAP reports, and the CRA has refused to disclose collection assistance data on grounds such disclosure could be "injurious" to the CRAs relationship with the USA.   The CRA hasn't said why publishing such data would be injurious.  CRA still doing better with transparency than US but clearly there is plenty of room for improvement.

1 comment:

  1. One thing to note is the collection provision in the treaty don't apply to Canadian citizens or domiciled corporations. Given CRA doesn't really know whether a taxpayer is a Canadian citizen or not they could waste a lot of time initiating a collection procedure only to be stymied(Vice Versa applies to the IRS won't collect Canadian tax debts on US Citizens in the US) by the treaty provisions. My guess from talking with some reasonably informed people is that treaty collection provisions are rarely invoked. I also have read several places that the US thought at one point the treaty collection provision could be used to crackdown on US citizens and green card holders living in Canada only to find out that many US citizens in Canada are also Canadian citizens too.