Offshore Compliance Advisory Committee – Minutes – June 13, 2017

Tuesday, June 13, 2017

List of Participants

OCAC Members

Chair
Colin Campbell

Vice-Chair
Kimberley Brooks

Committee Members

• Catherine Brown
• Larry Chapman
• Daniel Thornton - Absent

CRA Attendees

Deputy Assistant Commissioner, International, Large Business and Investigations Branch (ILBIB)
Lisa Anawati

Director, Business Intelligence and Analytics Division, ILBIB
Randy Reynoso

Director, Large Business Audit, ILBIB
Gord Parr

1. Welcome and opening remarks

The Chair welcomed all members to the meeting. It was mentioned that a portion of the day was reserved for presentations and discussions between the OCAC members and the Canada Revenue Agency (CRA), and a portion would be reserved for a discussion among the Offshore Compliance and Advisory Committee (OCAC) members only.

2. Administrative items

• Transparency: The OCAC and the CRA agreed that, in the interest of transparency, the CRA would post the minutes of the meetings on its website.
• Minutes of the February 3, 2017 meeting: Reviewed and approved by the Committee.
• Role of Committee members
  
  The members discussed the recent media attention on the participation of Committee members in non-CRA conferences/tax practitioner events. The group agreed that participation in other professional duties, conferences or events is at each member's discretion and separate from the voluntary nature of their OCAC membership. The members advise the Minister of National Revenue on current and future administrative strategies to deal with offshore non-compliance. The CRA proposes topics related to various offshore issues, of national importance, and seeks Committee input/feedback on proposed changes or new initiatives.
  
  CRA officials attending OCAC meetings share experience, advice and knowledge of the CRA's operating environment and answer questions that the OCAC members may have in order to, in turn, provide advice or input. Such advice is based on the tax, private sector, and academic expertise that each member brings to the Committee.

3. Update on the Voluntary Disclosures Program (VDP)

On June 12, 2017, the Honourable Diane Lebouthillier, Minister of National Revenue, launched external consultations on the CRA's proposed changes to the VDP. Over the next 60 days Canadians will be able to provide their comments on the Agency's draft Information Circular IC00-1R6.

The OCAC agreed to arrange a conference call for the end of August to discuss a summary of the feedback received and how the CRA will incorporate the input into the final draft.

4. International electronic funds transfers

The CRA presented the approaches used by the Agency, on a number of fronts, to use third party data, such as data from financial institutions on international electronic funds transfers over $10,000, to combat offshore tax avoidance and evasion.

Highlights included the CRA's focus on the examination of four jurisdictions and/or financial institutions each year.

The CRA confirmed that it may use different approaches depending on the sector, volume or experiences. Tools to automate the review of all electronic funds transfers are currently under development.

5. Large business risk assessment

The CRA presented its approach to large business compliance and the process used to risk assess international and large businesses:

• Use of new technology to analyze data from various sources to risk assess 100% of all large file returns on an annual basis;
• Selection of the higher risk files for audit; and
• Application of other compliance treatments on lower risk files.

The CRA is working with other tax administrations on bilateral projects.

The OCAC agreed that the CRA should publicize its use of data as it would be a valuable deterrent.

6. Next steps and future topics

The OCAC agreed to continue participating in the revision of the VDP, with the next call scheduled for August 31, 2017.

There will be a follow up discussion on the Agency's proposed changes to its internal audit agreement policy, as outlined in the Government of Canada's response to the Standing Committee on Finance's Sixth Report entitled: The Canada Revenue Agency, Tax Avoidance and Tax Evasion.

The CRA suggested, and the OCAC agreed to participate in, discussions on the following topics:

• CRA's approach to combatting non-compliance by high net worth individuals and related parties;
• Offshore trusts; and
• International tax gap.

A face to face meeting will be scheduled for Ottawa towards the end of November to follow up on these topics.

7. Closing remarks

The members held a short in camera session. The Chair thanked everyone for their participation and the meeting was adjourned.