Canada - English

CRA's GAAR Committee Batting 964 in 2012 - by Paul Lynch 

Canadian Tax Adviser

 

June 19, 2012

 

Paul Lynch
Ottawa, National Tax Centre

 

The CRA recently released updated GAAR statistics as of March 31, 2012. In the year ended March 31, 2012, 83 GAAR cases were referred to the GAAR Committee in the last 12 months. GAAR was found to apply in 80 out of the 83 cases or a 96% CRA success rate (in baseball parlance this would translate into a phenomenal .964 batting average). On a cumulative basis since the rule was introduced in 1988, the CRA GAAR Committee ruled that GAAR has applied in 769 of 1,027 cases, or 75% of all cases referred.

Of the 769 cases in which the CRA GAAR Committee ruled that GAAR applied, GAAR was the CRA's primary assessing position in 358 cases (47%) and its secondary position in 411 cases (53%).

 

Recent GAAR rulings - Year ended March 31, 2012
Based on our analysis, for the year ending March 31, 2012, the top three issues that the CRA ruled GAAR applied to included surplus strips, loss creation via stock dividends and kiddie tax. The rest are shown below.

 

 

GAAR statistics - Top four hot topics
The following is a summary of the issues that the GAAR Committee has most commonly applied GAAR to since 1988. The most contentious cases are surplus stripping, tax losses, income splitting and "kiddie tax", and international-related issues. GAAR has applied in 80% or more of these cases as follows:

 

 

In addition to the GAAR Committee statistics noted above, the CRA said that the GAAR Committee reviewed and considered GAAR to apply as a secondary assessing position in 1,363 RRSP cases and 78 Barbados spousal trust cases. Also, the provincial GAAR was applied to more than 300 files.

 

For more information, contact your KPMG adviser.

Publications

Canadian companies may be interested in these recent publications: