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CANADIAN INCORPORATION

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THE CANADIAN AUDITOR GENERAL PRAISES CRA

The Canadian Auditor General of Canada has recently examined activities of CRA (Canada Revenue Agency) regarding non-resident taxation and taxation of international transactions of Canadian residents.

The audit found that the Agency is better able to identify potential non-compliance with the tax rules on international transactions compare to the years 2001 and 2002. The risk assessment tools have improved, and some steps were taken to detect abusive international tax planning schemes. It has also directed more resources to auditing international tax avoidance.

On the other hand, the lack of sufficient international tax audit expertise in some of the tax offices was noted in the report.

The Office of the Auditor General audits activities of the Canadian federal government and the three territories as well as some 40 Crown corporations, and some 20 territorial corporations and agencies. This includes health, culture, the environment, finance, agriculture, transportation, and scientific research, to name only a few. While the Office may comment on policy implementation in an audit, it does not comment on policy itself.

The Office of the Auditor General tables each year in the House of Commons the relevant audit reports.

February 21, 2007

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