The Department of Finance is calling for public input on a proposed information-reporting regime for certain tax avoidance transactions.

On Friday, Finance Minister Jim Flaherty released the proposed new rules. The regime was initially proposed in the 2010 federal budget as a measure to crack down on aggressive tax-planning strategies that aren’t covered under the reporting rules facing tax shelters.

“These proposals seek to ensure that our income tax system is fair to all Canadians,” said Flaherty. “They will help the Canada Revenue Agency to identify instances of aggressive tax planning, which can undermine the integrity of our income tax system.”

Under the proposals, a tax avoidance transaction that bears at least two of three hallmarks of aggressive tax planning would be required to be reported to the Canada Revenue Agency. Individuals who fail to report such a transaction could face penalties.

The government proposes that these measures would apply to avoidance transactions entered into after 2010, as well as avoidance transactions that are part of a series of transactions that commenced before 2011 and will have been completed after 2010.

Interested parties are invited to provide comments on the proposals by July 7, 2010.