Taxpayer Non-Compliance with Input Tax Credit Rules: Data and Policy Options for Canada
Notice bibliographique
Résumé
Input tax credits (ITCs) are a mechanism for businesses to recover the goods and services tax (GST)/harmonized sales tax (HST) paid on expenses related to their commercial activities. While many businesses claim ITCs in accordance with the rules, instances of non-compliance are apparent. Canada uses an invoice credit system that relies on the claimant's retention of documentation that can be checked to detect any overstatement of ITC entitlement. Absent an audit, businesses are generally not required to provide tax authorities with details of their transactions. This article draws on a study of case law relating to section 169 of the Excise Tax Act over the five-year period 2014-2019. Section 169 contains the general principles and rules for claiming ITCs. The study highlights various reasons for non-compliance with the ITC system in Canada, both intentional and unintentional. There are several recurring themes: the prevalence of fraudulent practices in certain industries, burdensome documentation and verification requirements, and taxpayers' misunderstanding of the rules for claiming ITCs, owing to ambiguous or otherwise complicated legal tests. In particular, the substantive rules concerning what constitutes a "commercial activity" for the purposes of claiming ITCs are often misapplied or misunderstood by claimants. Undisclosed agency relationships also cause problems where they result in the wrong name appearing on the documentation supporting an ITC claim. These issues point to certain flaws in the implementation of the rules under the GST/HST regime in Canada. In response to instances of suspected fraud, Canadian tax authorities have been results-driven in implementing increasingly onerous supplier verification requirements that must be met before an ITC is claimed, particularly where the supplier did not remit the applicable tax. This contributes to a high compliance burden for taxpayers. Some proposals have been made for changes that would mitigate the issues associated with undisclosed agency relationships, but there are still problems with the documentation requirements and other substantive rules for claiming ITCs that need to be addressed. The article concludes with a review of reform options proposed or adopted in other jurisdictions with a value-added tax. It also discusses a compliance measure implemented in Quebec (the attestation de Revenu Québec), which could be applied in other provinces. Specific recommendations are made for the adoption of e-invoicing and increased reporting requirements to address some of the reasons for non-compliance in Canada. A number of countries have moved toward implementing periodic or near-real-time reporting requirements. These measures show promise and suggest that Canada could move in that direction as well.
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Comment cette classification a été obtenuedéplier
Prédiction machine sur la base complète
Imitation des enseignantsNi prévalence calibrée, ni vérité terrain. Validation humaine à venir. Le volet Gemma est une étiquette directe du modèle pour chaque travail de la base, lue sur la notice réduite au titre. Le volet Codex est un classifieur appris des 10 348 étiquettes directes de Codex et calibré sur les taux pondérés de l'échantillon; les champs sans appui suffisant ne portent aucun appel Codex. Le mode candidate est l'union des deux volets; le consensus est leur intersection. Ces sorties portent le statut machine_predicted_unvalidated et ne sont pas des étiquettes humaines.
Scores du classifieur distillé par catégorie (deux têtes)
| Catégorie | Codex | Gemma |
|---|---|---|
| Métarecherche | 0,008 | 0,043 |
| Méta-épidémiologie (sens strict) | 0,000 | 0,001 |
| Méta-épidémiologie (sens large) | 0,001 | 0,001 |
| Bibliométrie | 0,006 | 0,017 |
| Études des sciences et des technologies | 0,010 | 0,002 |
| Communication savante | 0,013 | 0,003 |
| Science ouverte | 0,003 | 0,003 |
| Intégrité de la recherche | 0,002 | 0,003 |
| Charge utile insuffisante (le modèle a refusé de juger) | 0,009 | 0,001 |
Scores machine (provisoires)
Les deux têtes enseignantes du modèle étudiant, lues sur ce travail. Un score ordonne la base pour la relecture; il n'affirme jamais une catégorie, et le statut de validation accompagne chaque rangée tel quel.
Scores de référence d'un modèle non mature (critères de maturité non atteints, 7 itérations). Un score ordonne; il n'affirme jamais une catégorie.
score_only:v0-immature-baseline · tel quel depuis la passe de notation : score_only signifie que le nombre peut ordonner les travaux, et qu'aucune étiquette de catégorie n'en découleClassification
machine, non validéePrédiction automatique; un appel candidat d’une seule source (Gemma direct ou Codex distillé), pas un consensus.
Le détail, modèle par modèle et score par score, se trouve en fin de page sous « Comment cette classification a été obtenue ».