Joint International Tax Shelter Information Centre
On April 23, 2004, Canada signed a Memorandum of Understanding establishing a Joint Task Force and for the creation of a Joint International Tax Shelter Information Centre (“JITSIC”). The other signatories include Australia, the U.K. and the U.S. The Task Force is intended to increase collaboration and co-ordinate information about abusive tax transactions. The initial focus will be on the ways in which financial products are used and on identifying promoters who develop and market these products.
Question
Can the CRA tell us what has been learned in the first year with JITSIC and what exchanges of information have occurred?
Response
Australia, Canada, the United Kingdom and the United States continue to participate in JITSIC and all countries continue to have delegates in Washington D.C. It has been less than a year since JITSIC became operational and it took some time to set up the infrastructure and procedures. Therefore, exchange of information is in the early stages. Information exchanged to date can be put into three broad categories.
- General information is exchanged among the JITSIC jurisdictions with respect to laws, administrative practices, and experience with aggressive tax evasion and avoidance.
- Generic information is exchanged with respect to specific schemes that have been detected. These are descriptions based on real cases but names and identifying facts are not disclosed. Because the schemes have no identifying facts, the information can be shared freely among the JITSIC countries.
- Taxpayer specific information is exchanged where that information is relevant to the taxpayer’s tax liability in the country receiving the information. Due to confidentiality provisions, taxpayer specific information is only exchanged between two countries where there is a nexus, not with all JITSIC members.
The close collaboration of the four JITSIC countries has broadened the CRA’s knowledge on aggressive tax avoidance and evasion schemes and the methods used to counteract them.