Tax information exchange and the erosion of taxpayer privacy rights
University of British Columbia
Master of Laws - LLM
The exchange of taxpayer information between revenue agencies has been increasing as a response to globalization and technological advances, which have allowed taxpayers more opportunities for tax avoidance and tax evasion. Tax information exchange allows revenue agencies to take advantage of these same advances. The legal framework through which the exchange of taxpayer information is implemented consists of modifications to existing tax conventions and special Tax Information Exchange Agreements. These tax treaties modify and override domestic privacy laws. The Canadian income tax system operates within a regime of constitutional privacy protections and statutory privacy protections. A balance has been struck between the right to privacy and the State interest in obtaining personal information in order to administer and enforce the tax system. This thesis examines the information gathering powers of the Canada Revenue Agency and the limits on these powers. These powers are broad because taxpayers generally have a low expectation of privacy in their tax information. This thesis argues that the balance struck domestically is predicated on meaningful procedural protections and remedies and on taxpayer information not being shared with third parties. This thesis then examines the tax treaty information exchange provisions and their interaction with Canadian law. This thesis argues that these provisions override domestic law without providing any meaningful procedural protections. This thesis concludes that information exchange in its current state is incompatible with the balance struck by the Courts between taxpayer privacy and the revenue authorities’ need for information.
Attribution-NonCommercial-NoDerivs 2.5 Canada
Law, Faculty of