Canada signs International Tax Convention
Ottawa, April 29, 2004... Canada signed the Convention on Mutual Administrative Assistance in Tax Matters (The Convention) yesterday in Paris. The Convention provides a stable framework for governments to combat tax evasion on a global scale by sharing tax information multilaterally. This international agreement will mainly apply to multinational businesses and covers Canadian taxes that fall under the Income Tax Act, Excise Tax Act, and the Excise Act, 2001. It does not apply to customs duties.
Initiated by the Council of Europe (CoE) and the Organization for Economic Co-operation and Development (OECD), the Convention has explicit provisions governing the privacy of taxpayer information. Canada will evaluate any information to be shared with other participating countries to ensure the protection of confidential Canadian taxpayer information. While the Convention helps to ensure that all Canadians will pay their fair share of federal taxes, it does not affect their rights under Canadian law.
Under the Convention, participating countries benefit from three forms of administrative assistance: the exchange of information; assistance in the collection of taxes; and delivery of documents. In signing the Convention, Canada has agreed only to exchange tax information. Canada will not deliver documents from other governments to Canadian recipients because treaty partners already have access to Canadian postal and courier services. As well, Canada will not collect taxes because we prefer to continue to negotiate assistance in collection on a bilateral basis.
The Government of Canada currently has 81 bilateral tax treaties in force that provide for the exchange of taxpayer information. The Convention is a multilateral agreement that extends information sharing to a broader range of taxes (such as GST).
The Convention will not come into force until legislative amendments are completed. It will not result in additional administrative burden for businesses.
The full text of the Convention is available on the CRA Web site by clicking on "Other Conventions" at: www.cra.gc.ca/treaties.
This document is also available for download in .pdf format.
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