Back in April, the Panama-based law firm Mossack Fonseca became implicated in a global tax sheltering scheme when documents were leaked implicating a collection of world leaders and their associates in the use of offshore tax havens and other tax dodging schemes. Since this time, countries across the globe have become focused on dealing with the wrongs carried out by those in powerful and influential positions – and Canada is no different.
Of the 200,000 offshore entities named in the documents, there were 625 Canadians, and while it is not illegal for Canadians to set up offshore accounts or businesses, as Canadian citizens, these funds are still covered by Canadian tax laws and thus owners are still required to comply and declare taxable income transferred outside of Canada.
According to a recent Global News article, Canadians themselves believe a rigid double standard exists when it comes to taxes, and as a result are less than thrilled with the activities of those named in the Panama Papers. According to the article, which examines a survey conducted by Ipsos Global, “88 per cent of Canadians agree (58 per cent strongly/30 per cent somewhat) that the Panama Papers reveal there are two sets of rules in the world – one for rich people, and one for everybody else.”
You can read more about the survey here: http://globalnews.ca/news/2743972/panama-papers-canadians-say-there-are-two-sets-of-rules-one-for-the-rich-one-for-everyone-else/.
For those outed in the Panama Papers, as well as any others involved in tax shelters or tax havens of any kind, or tax evasion activities of any kind, this could not have come at a worse time. Earlier this year, the Canadian government announced an investment of over $444 million to crack down on tax cheats. This money will be funneled into programs dedicated to uncovering and prosecuting tax evasion.
One such program is the Offshore Informant Leads Program, a new program through which the government will grant financial rewards to those who provide information related to major international tax non-compliance that leads to the collection of taxes owing. Coupled with the Informant Leads Program, which is more national in scope, the Offshore Informant Leads Programs stands to uncover a significant number of questionable tax (non)participants.
While the Panama Papers seem to have highlighted mainly the activities of world leaders and political well-knowns, the programs rolled out by the CRA are not as elitist in their focus. These programs have been established to catch any and all tax havens – not just those utilized by the rich and famous, so beware.
Want to speak to someone, in confidence, about questions or concerns you have regarding any offshore holdings? Tax Solutions Canada can offer the advice you need to settle up with the CRA, in a way that protects you and helps you avoid sky-high penalties. But don’t wait too long – many options disappear from the table once the CRA finds out about any money owing.
Call us today at 1-888-868-1400.