Canada’s proposal to expand the discretionary power of the Canada Revenue Agency (CRA) could influence how audits are conducted and taxpayers’ approach to audits in 2025. Bloomberg Tax recently published an article written by Osler’s Pooja Mihailovich and Leandra Gupta, “Canada Audit Proposal Would Bring Big Noncompliance Consequences.” In their article, they discuss the CRA’s broadened authority and the penalties for noncompliance.
The proposed amendments aim to enhance the efficiency of tax audits and the collection of revenue. They grant the CRA considerable latitude and enable the agency to require that the information in an audit be given under oath. The article suggests, “[g]iven the potential for the CRA to use this information against the taxpayer in assessing, taxpayers need to ensure that personnel who are interviewed by the CRA are adequately prepared.” The new provisions introduce a mandatory penalty for a taxpayer’s noncompliance of an information request, as well as considerable fines upon the issuance of a notice of noncompliance by the CRA. Taxpayers are advised to maintain a good working relationship with the CRA to navigate evolving legislation in 2025.
Learn more about Canada’s audit proposal by reading the full article in Bloomberg Tax.
