The Panama Papers & the CRA : Which Canadians? How much..?

[Oscar]

Canada tells tax collectors to get hold of Panama Papers info

[ http://www.thestar.com/news/canada/2016 ... -info.html ]

By: Bruce Campion-Smith Ottawa Bureau, Published on Mon Apr 04 2016

Canada’s tax collectors want to get their hands on the so-called Panama papers, a vast collection of documents that lays bare details of offshore accounts and tax shelters.

OTTAWA—Canada’s tax collectors want to get their hands on the so-called Panama Papers, a vast collection of documents that lays bare details of offshore accounts and tax shelters.

Hours after media outlets around the globe — including the Toronto Star — went public with the internal records of a Panamanian law firm that specializes in hiding money in tax havens, Revenue Minister Diane Lebouthillier instructed officials at the Canada Revenue Agency to get the information.

“The minister of National Revenue has instructed CRA officials to obtain the list of data leaked through Panama Papers in order to cross-reference this information with data already being obtained through the agency’s existing mechanisms,” said spokeswoman Chloé Luciani-Girouard.

Luciani-Girouard said Lebouthillier was following the story of the leaked documents “very closely.”

“The Canada Revenue Agency is committed to combating the abusive use of offshore jurisdictions and protecting the integrity of the tax system,” Luciani-Girouard said in an email.

The leaked documents are the confidential records of Mossack Fonseca, a law firm in Panama known for establishing shell companies. And the hidden identities of some 350 Canadians are contained in the private database.

It’s not illegal to have foreign investments. But Canadians with investments abroad are required to report all income earned outside Canada to the CRA.

Luciani-Girouard said that since 2015 the department has collected information on all international fund transfers worth more than $10,000, including Panama, and selects the “highest risk” taxpayers for review or audit.

“Canada has significant tools to detect offshore tax avoidance and past success working with leaked information to detect and correct non-compliance,” Luciani-Girouard said.

Yet Sen. Percy Downe, who has long been active on the issue, said Canada has a “massive” problem with overseas tax evasion and suggested it’s getting worse. “It used to be extremely wealthy Canadians. Now it’s moved into the upper middle class doing it,” he said.

But just how much is lost is unknown because the Canada Revenue Agency has refused to study the tax gap – a measure of the revenues it should be collecting and those it actually gets, Downe said in an interview Monday.

“Time has passed them by on transparency and openness. They could really get ahead of curb by . . . telling Canadians how much they’re losing, what resources they need,” Downe said.

Downe wrote Lebouthillier on Nov. 26, 2015 — soon after she took over the revenue portfolio — to make the case that such analysis was critical in light of the revelations that rich Canadians have sheltered wealth abroad, meaning the “loss of literally untold amounts of revenue” for the federal government.

On Monday, Downe revealed a Jan. 20 letter from Lebouthillier signalling that the department will finally try to measure how much revenue it might be losing to dodgers.

“There is strong interest in measures of tax evasion and avoidance, both domestically and internationally,” Lebouthillier wrote in her letter.

“I have instructed my officials to commence work on a plan aimed at enhancing public understanding of non-compliance with Canada’s tax laws and to identify the financial resources that would be required to move forward on the plan.

“As a first step, the CRA will undertake a comprehensive study of tax gap estimation,” Lebouthillier said.

Still, Downe said the department lacks the resources to go after tax cheats sheltering income abroad.

“If you have enough money overseas and you can lawyer up and accountant up, they’ll cut you a deal. So it’s a double standard,” he said.

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How offshore banking is costing Canada billions of dollars a year

[ http://www.thestar.com/news/world/2016/ ... -year.html ]

By: Robert Cribb Foreign, Marco Chown Oved Staff Reporter, Published on Mon Apr 04 2016

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QUOTE: The documents also show Mossack Fonseca considered Canada itself a potential tax haven, marketing the country as a place to incorporate anonymous companies."

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An unprecedented leak of secretive offshore tax-haven data contains stunning new revelations about the diversion of wealth from government coffers to hidden bank accounts.

In the largest media collaboration ever undertaken, more than 350 journalists working in 25 languages dug into 11.5 million documents that revealed Mossack Fonseca’s inner workings and traced the secret dealings of the law firm’s customers. The Panama Papers detail a series of revelations about everything from the offshore holdings of 12 current and former world
leaders, billionaires and celebrities.

The hidden identities of 350 Canadians with offshore tax haven investments have been revealed in the private database of one of the world’s leading shell company registration firms, according to a Toronto Star analysis of a massive leak obtained by the International Consortium of Investigative Journalists and the German newspaper Süddeutsche Zeitung.

Obscured by figurehead directors, untraceable money transfers and anonymous company ownerships, these Canadians paid for the secrecy promised by Mossack Fonseca, a Panamanian law firm renowned internationally for establishing shell companies.

Much of this is perfectly legal. For some international business transactions, offshore company registration is a logical choice. And there are international laws and treaties facilitating the legal flow of money into tax-friendly jurisdictions.

But it comes at a tremendous cost to the public interest.

Currently, Canadians have declared $199 billion in offshore tax haven investments around the world, according to Statistics Canada. But experts say that figure is a small fraction of the Canadian offshore wealth that goes undeclared.

The precise annual cost to Canadian tax coffers is unknowable. But credible estimates peg Canada’s tax losses to offshore havens at between $6 billion and $7.8 billion each year.

Tax avoidance — the legal movement of wealth to offshore bank accounts in order to minimize tax burdens — is a grey area. But there is a much darker element.

Terrorist financing, money laundering and corruption are among the by-products of offshore secrecy. The leaked records reveal a pattern of covert manoeuvres by banks, lawyers and companies concealing suspect transactions or manipulated records in ways that facilitated illegality.

“These findings show how deeply ingrained harmful practices and criminality are in the offshore world,” said Gabriel Zucman, an economist at the University of California Berkeley and author of The Hidden Wealth of Nations: The Scourge of Tax Havens who was briefed on the details of the leak.

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