Quebec has launched a consultation on a review of legislation to combat aggressive tax planning.

“In the 2008-2009 budget speech, I announced that a review of the legislative framework applicable to aggressive tax planning was needed and that this review would follow a public consultation,” said the Minister of Finance, Monique Jérôme-Forget.

The ministry notes that aggressive tax planning is generally described as a tax avoidance transaction that complies with the letter of the law while abusing its spirit.

The ministry released a paper for consultation that examines the problem of aggressive tax planning and the legislative tools currently in force to fight against it. It also describes the actions the government is considering, to provide Quebec’s tax authorities with the legislative tools needed to more effectively curb aggressive tax planning and discourage the emergence of a new tax practice business model.

“I have a duty to see that the integrity of the tax system is maintained and take the necessary actions to protect Quebec’s tax base. Aggressive tax planning raises serious issues of fairness among taxpayers. Sooner or later, the revenue lost to the government because of aggressive tax planning must be collected from other Québec taxpayers, which violates the long- established principle that each must pay their fair share of taxes,” Jérôme-Forget noted.

“The actions under consideration are measured and reasonable. They are substantially inspired by what is done in some OECD countries. They demonstrate a responsible approach that takes into account the competitive environment we live in, the Canadian fiscal context and the characteristics of Quebec’s tax system,” she said.

The consultation will continue until March 1.

IE