s.
Hear ERP Customer
Understanding the complexities of
the process
The competent authority process can be
complex, and there are some deadlines and
responsibilities of which taxpayers need to
be aware. Failure to comply may prevent relief
from double taxation.
Preparing the submission
Information Circular 71-17R5, Guidance on
Competent Authority Assistance under Canada’s
Tax Conventions (IC 71-17R5), provides the
CRA’s guidance on how Canadian taxpayers
should prepare and submit a request for
assistance. There are 17 items that must be
included or specifically addressed in the
competent authority submission.
The competent authority process provides
an additional avenue to battle (and overturn)
the initial reassessment since the submission
must include “the taxpayer’s view on any
possible bases on which to resolve the issues.”6
After reviewing the taxpayer’s submission
and understanding the facts, the Canadian
competent authority has, in some cases,
directed the local CRA tax office to vacate the
reassessment. Therefore, taxpayers should
view the competent authority process as an
opportunity to further defend the original
filing position, as opposed to simply just
seeking relief from double taxation.
Taxpayers’ responsibilities
Each tax treaty is unique, with different time
limits for which tax authorities can impose
adjustments and for which taxpayers must
notify and request competent authority
assistance for relief from double taxation.
For many of Canada’s tax treaties, the
deadline to seek assistance is generally two to
three years from the date of the reassessment
that resulted in double taxation. However,
there are some treaties, including the CanadaUS Treaty, where the onus is on the taxpayer
to notify the competent authorities of the
need for assistance within six years after the
end of the taxation year in question. It is the
taxpayer’s responsibility to notify the Canadian
and US competent authorities, regardless of
whether the CRA has completed its audit
and issued a reassessment. If the taxpayer
do