Canada Revenue Agency on offshore financial structures

THE Canada Revenue Agency issued the following statement on Monday on offshore financial structures:


IN the wake of renewed media attention concerning offshore financial structures, the Canada Revenue Agency (CRA) is delivering the following statement to inform Canadians on the work and progress being made to combat tax evasion and tax avoidance. The CRA is also taking the opportunity to highlight the important work Canada is doing on the world stage through increased cooperation and collaboration with its international partners to better combat those hiding their assets offshore.

The Government understands that tax evasion and tax avoidance are multi-billion-dollar issues, and it has made a billion-dollar investment to tackle it. Almost two-thirds of the CRA’s audit fiscal impact of $25 billion over the last two years was from audits of international, large business and aggressive tax planning activities. The CRA currently has more than 990 audits and more than 42 criminal investigations related to offshore underway.

This investment has signaled to Canadians that the CRA continues to expand the tools it has to better ensure the integrity of the tax system so that no one avoids paying their part to support the services and quality of life Canadians expect.

The CRA is ensuring that those who choose to break the law face the consequences and are held accountable, starting with tax professionals who facilitate non-compliance – the CRA levied more than $44 million in third-party penalties on tax advisors last year and there are presently a number of criminal cases under way. The Agency has a full-time dedicated unit focused on offshore non-compliance and we are reviewing money transfers over $10,000 between Canada and four offshore jurisdictions such as the Isle of Man. In addition, the CRA is risk-assessing 100% of large multinational corporations, analyzing the tax affairs of risky high-net worth taxpayers, and working with credible paid informants.

Collaboration with international partners is crucial to detecting and addressing those who are evading and avoiding paying their fair share. The CRA and other tax administrations from around the world have been collaborating and exchanging information on offshore accounts for years; this collaboration has only intensified since the media coverage of the Panama Papers. This work has delivered significant results and has laid the foundation for future collaborative work, including addressing other data leaks.

With regards to the Panama Papers as of September 30, 2017, the CRA has 123 audits involving both participants and facilitators underway, and several criminal investigations are ongoing. In the event that further details come to light, CRA will not hesitate to investigate and take further action as warranted.

JITSIC – or the Joint International Taskforce on Shared Intelligence and Collaboration – brings together 37 of the world’s national tax administrations that have committed to more effective and efficient ways to deal with tax avoidance. The CRA is a fully participating member of JITSIC.

Following its work on the Panama Papers, JITSIC’s member countries already have:

– a shared understanding of the types of arrangements sought to be used for tax evasion and avoidance, and how to continue to detect them;
– the tools and structures in place to analyze data sets and to disrupt intermediaries that pose a high risk to them;
– improved practices in exchanging information within established legal frameworks; and,
– an agreed collaborative approach (and established capability) for a fast, effective and coordinated multilateral response to any future data releases.
Offshore tax evasion and aggressive tax avoidance are complex, global issues that continue to challenge tax administrations around the world. The Government of Canada will continue to work with the provinces and territories, as well as other tax administrations and all other partners, to ensure a tax system that works for Canadians. In addition, the CRA will continue to build on its capacity to detect and crack down on tax cheats and ensure that those who choose to break the law face the consequences and are held accountable for their actions.

[Emphasis that of The VOICE]