Federal court | Tax | Income tax | Administration and enforcement
C Corp. had head office in Saskatchewan and had several indirectly wholly-owned subsidiaries situated outside Canada. In May and July 2013 and in May 2014, as part of audit, Minister of National Revenue demanded in-person interviews with C Corp. personnel in relation to 2010, 2011 and 2012 taxation years and in replies C Corp. refused Minister’s requests. One of stated purposes of audits was to verify whether C Corp. complied with its duties and obligations under Income Tax Act. Minister’s specific concern was that C Corp. may not have abided by transfer pricing rules for non-arm’s length organizations. Minister made summary application for compliance order under s. 231.7 of Income Tax Act and issue for determination was whether C Corp. should be compelled to produce approximately 25 personnel for interviews in relation to audit. Application dismissed. Order sought by Minister did not meet principle of proportionality. Related litigation before Tax Court of Canada would likely resolve most of issues that would form basis of requested interviews. Time and cost involved in allowing Minister to interview over 25 personnel scattered across world was not proportional to information being sought since Tax Court of Canada would determine issues that were focus of interviews.
Cameco Corporation v. Canada (National Revenue) (2017), 2017 CarswellNat 3791, 2017 CarswellNat 6716, 2017 FC 763, 2017 CF 763, Glennys L. McVeigh J. (F.C.).
