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Canadian Tax Authorities to Use Software to Catch Online Tax Evaders
The Canada Revenue Agency (“CRA”) has recently been testing new software that is designed to spot Internet businesses operating in Canada, but who are failing to pay their taxes. The software is called Xenon. Xenon’s immediate attention will be directed towards online gambling, shopping, and auction websites. The CRA’s position on the matter is simple, “There is no difference between a business on the Internet...or a business down the street...they are all businesses, and they all have to pay their taxes.”
More specifically, Xenon uses a “Web identification tool” in order to determine a website’s probable owner, and this data is cross–referenced with tax records, and national databases. As such, it is unclear if the data Xenon provides is evidence of tax evasion, or simply raises red flags, which subsequently prompt a CRA investigation. However, if Xenon goes beyond finding public information one could easily find on various search engines, privacy concerns could potentially become an issue.
For additional information, visit:
http://www.thestar.com/article/175853