Canada acts on Panama Papers revelations

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MEDIA attention over the Panama Papers revelations has pushed, the Canada Revenue Agency (CRA) to issue a report highlighting progress in  combatting tax cheats and to announce it has spent $1 billion pursuing them.

The CRA chose Panama’s Independence Day, Nov.3,   to highlight its  work  on the world stage “to better combat those hiding their assets offshore.”

The statement says: 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 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”.

It continues: “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 other criminal cases underway.

The Agency has a full-time dedicated unit focused on offshore non-compliance and is reviewing money transfers  0ver $10,000 between Canada and offshore jurisdictions,

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.

“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 Paper,” says the statement. The work has delivered significant results and has laid the foundation for future collaborative work, including addressing other data leaks.

 Audits
With regards to the Panama Papers as of September 30, the CRA has 123 audits underway.  involving participants and facilitators, and criminal investigations are ongoing.”

Canada is a fully participating member of  The Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) – 37 of the world’s national tax administrations committed to more effective and efficient ways to deal with tax avoidance. 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.

The report concludes: “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”

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