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Government of Canada works with International Partners to Crack Down on Offshore Tax Evasion
September 7, 2016 Ottawa Canada Revenue Agency
The vast majority of Canadians pay their fair share of taxes, but some wealthy Canadians buy their way out of paying what they owe. This has to change in order to ensure a tax system that is more responsive and fair for all Canadians.
The Honourable Diane Lebouthillier, Minister of National Revenue, today highlighted Canada’s participation in the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) network. During the announcement, the Minister emphasized the necessity of sharing data between Canada’s international partners, in order to identify and curb tax schemes and to bring those who choose to participate in such tactics to justice.
As a founding member of the JITSIC – a network of more than 30 tax administrations – Canada works closely with its counterparts to coordinate tax compliance activities across the spectrum of international tax risks.
Canada is now working with its international partners to tackle these threats through joint collaboration, and will continue to collect and share an increasing amount of data. In addition to these global efforts, respective countries are pursuing both criminal and civil activities domestically.
Minister Lebouthillier also underlined the concrete steps being taken by the CRA here in Canada to crack down on tax cheats. Specifically linked to offshore tax havens, the CRA is currently conducting audits on over 750 taxpayers and criminally investigating 20 cases of tax evasion.
Today’s announcement builds on the government’s $444 million investment to provide the Canada Revenue Agency with more resources and tools to identify and curb offshore tax evasion and aggressive tax avoidance. The Government of Canada today reiterated its commitment to cracking down on tax cheats and those who choose to participate in tax schemes, through increased collaboration with international partners.
“Hiding income and assets in foreign jurisdictions to avoid paying taxes is a serious issue that robs all hard-working Canadians of important services. By increasing our collaboration with our international partners, Canada is taking an active role in ensuring a fairer tax system, where tax cheats face consequences for their actions. This government has promised to pursue tax cheats and with the help of our international partners and concrete action at home, I can say that we are closing in on them.”- The Honourable Diane Lebouthillier, P.C., M.P., Minister of National Revenue
- Regarding the Panama Papers, the CRA has several ongoing audits and is pursuing criminal investigations in some instances. Search warrants were recently executed by the CRA and these investigations are ongoing. The Agency is working in partnership with domestic partners such as the Financial Transactions and Reports Analysis Centre and the Royal Canadian Mounted Police on these matters.
- In May 2016, following reports that a financial institution and its subsidiaries were associated with approximately 375 shell companies mentioned in the Panama Papers, the CRA applied to the Federal Court for authorization to issue an Unnamed Persons Requirement seeking information from this particular Canadian financial institution. The CRA has now received part of the information it requested, with more on the way later this fall, and is reviewing and cross-referencing the data with information already obtained by the Agency. The CRA will take the necessary compliance actions where appropriate.
- The CRA has been collecting information on all international Electronic Funds Transfers over $10,000, including those involving Panama and other jurisdictions of concern. Specifically regarding the Isle of Man, 3000 Electronic Funds Transfers totalling $860M in a 12 month period were reviewed. These involved approximately 800 taxpayers. Approximately 350 individuals and 400 entities have been contacted and as a result of this review, 60 audits are currently underway. The CRA is also reviewing other jurisdictions.
- In Budget 2016, the government committed to provide the CRA with the necessary tools to combat offshore tax evasion and aggressive tax avoidance. Beginning this fall, the CRA will be launching the hiring process to add new tax professionals to its already robust audit team. These individuals will assist in auditing high-risk multinational corporations and unravelling complex offshore schemes to crack down on tax cheats, a strategy that will collect an estimated additional $500 million in revenue over five years.
- The CRA encourages Canadians to come forward through the Offshore Informant Program (OTIP), if they have any information pertaining to tax evasion/tax avoidance. As of July 31st, 2016, the OTIP has received 868 calls from potential informants and an additional 361 written submissions. Due to information received through this program, over 180 taxpayers are currently under audit.
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Chloé Luciani-Girouard, Press Secretary
Office of the Minister of National Revenue
Canada Revenue Agency
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