TEI-Canada Customs and Revenue Agency liaison meeting agenda: excise tax issues

Tax Executive, The, Nov, 1999

19. Company A is undergoing a GST regular (not special investigation) audit. During the course of the audit, Company A realises that it should have, but did not remit GST (e.g., it failed to remit the GST invoiced on taxable supplies or to self assess the Division IV tax). The GST auditor has not discovered the errors.

If Company A discloses the situations to the auditor, would the disclosure fall under the "voluntary disclosure" announcement of November 28, 1996, since the six-percent penalty would not be assessed even though Company A is presently under audit? In other words, if Revenue Canada has commenced an audit, does that preclude the company from receiving the benefit of the "voluntary disclosure" announcement of November 28, 1996?

20. TEI has become aware that some auditors do not adhere to positions taken in GST/HST Policy Papers and the GST/HST Memoranda Series, even though the Audit Directorate participates in the Publications and Policy Review Committee. Will the new agency structure increase the likelihood of a consistent approach among all employees and, more important, preclude auditors who are in the course of an audit from challenging the positions adopted in GST/HST Policy Papers and the GST/HST Memoranda Series?

21. Electronic tickets (e-tickets) are increasingly used for air travel. Typically, the only documentation provided for purchasers of e-tickets is the e-mailed invoice. For GST registrants claiming ITCs on air travel, is a copy of the emailed invoice acceptable documentation?

22. At TEI's May 1999 conference, Revenue Canada expressed an intent to give a written GST registration confirmation to the agency's business window officers, which would be issued to registrants upon request for them to satisfy third party requests. Is this confirmation report now available to business window officers?

23. In reference to compliance levels and the requirement to amend all importations for overages, shortages, and price variations, will Customs consider accepting "substantiated" tolerance levels for these types of discrepancies? For example, the specific industry, or particular company, may have established tolerance levels to which it adheres. If substantiated, is that tolerance level acceptable? If so, it follows that errors and omissions within the tolerance level would not require a voluntary entry.

24. Anecdotal reports from customs brokers continue to suggest that, across Canada, Customs may apply differing subjective judgments in assessing the risk profile of Canadian importers. Our understanding was that Revenue Canada would be publishing standards that would permit companies to establish that their internal control procedures and compliance with Customs rules are sufficiently rigorous to warrant expeditious clearance. Is it still Revenue Canada's intention to publish standard guidelines and procedures for Periodic Verification Reviews? Such guidelines could be similar in scope and effect to the Compliance Assessment Team (CAT) Kit released by the United States Treasury. We believe that such guidelines would enhance nationwide consistency in the treatment of importers.