The Decline of the Successful Tax Shelter

This essay reviews the Income Tax Act (Canada) (the “Act”) tax shelter provisions and provides an overview of relevant issues to demonstrate that despite criticisms that the provisions and Canada Revenue Agency (“CRA”) enforcement are overreaching, it has been successful in prohibiting, preventing and reassessing participants in aggressive tax shelter programs. It argues that issues with the broad legislative provisions like potential and inappropriate applicability to legitimate business transactions and CRA overreach are justified given the real and potential harm that abusive tax shelters cause to the tax system and the success in combating them in recent years. In fact, the legislative and enforcement actions have been so successful that in a matter of decades we have seen the rise and fall of the successful tax shelter in Canada.

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Nick Wright The Decline of the Successful Tax Shelter 160222

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