25 October 2011

"Why paying too much tax can be a good thing"


OTTAWA – Some of Canada's largest corporations may be using the government as a high-yield investment account by deliberately overpaying on their annual tax returns to collect favourable interest rates, the federal auditor general says.

In each of the last three years, top businesses have realized a $30 million windfall by paying a total of $4 billion into accounts managed by the Canada Revenue Agency that cover them in the event their tax returns are reassessed.

The accounts have paid an interest rate of from 5 to 7 per cent since 2006. The rate is considerably more favourable than that offered by banks. Auditor General Sheila Fraser said it appears corporations were well aware of the favourable treatment they were getting with their federal accounts, though it is difficult to prove any company has set out to bilk taxpayers ...

No comments: