Canada is updating its mandatory disclosure legislation to be more in line with the OECD’s initiative to combat tax evasion, known as BEPS Action 12, which shows that the lack of timely, comprehensive and relevant information on aggressive tax planning strategies is one of the main challenges faced by tax authorities worldwide. The changes are set to go into force in 2023.
What is the background of Canada’s MDR?
In the 2021 Canadian Budget, it was announced that Canada would be amending the Income Tax Act to require certain transactions to be reported to the Canadian Revenue Agency (CRA). These new Mandatory Disclosure Rules are set to be implemented in 2023.
In February 2022 the Canadian Department of Finance released draft legislation that included a description of mandatory disclosure measures which will ultimately help the CRA to become aware of tax evasion and aggressive tax avoidance much earlier on in a transaction.
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