National Report Canada

Abstract

Interestingly, Canada has had relatively little recent experience with anything like the heated concerns expressed in American and EU tax policy circles regarding excessive compliance costs of corporate income taxes. The lack of debate regarding compliance costs cannot be attributed to a lackadaisical or uncritically accepting attitude toward personal and corporate income tax policy in Canada. On the contrary, there are issues in Canadian tax policy circles that are widely considered to be troubling. However, compliance costs are not one of our most contentious concerns. The conspicuous lack of heated debate relating to compliance costs can probably be attributed to early successes in fashioning an income tax system that has a relatively low overhead associated with compliance. Because of the perceived effectiveness of the Canadian system on the compliance cost front, those individuals in the EU who are interested in formulary apportionment of corporate income might well wish to examine the Canadian experience in more detail. This paper provides an outline of what is known about the compliance costs associated with Canadian tax collection.