The Canada Revenue Agency (CRA) is investigating numerous cases of possible criminal tax evasion and auditing hundreds of taxpayers as part of its effort to crack down on international tax avoidance.
Federal revenue minister Diane Lebouthillier said in a news release that the CRA is carrying out more than 750 audits and investigating 20 possible criminal tax evasion cases in connection with offshore tax havens. These efforts follow the government’s recent pledge to root out offshore tax evasion and aggressive tax avoidance with measures such as increased collaboration with authorities in other countries, an increase in auditing resources and new information-gathering tactics.
The CRA says that it has launched several ongoing audits and is pursuing criminal investigations in some cases stemming from revelations in the Panama Papers. It has recently executed search warrants, received some of the information requested from a Canadian financial institution and notes that it is expecting more information later this fall. Additionally, a review of international electronic funds transfers of amounts greater than $10,000 has sparked 60 audits, it says.
Another 180 audits have been launched in response to tips received through the Offshore Informant Program (OTIP), which may pay for information on tax evasion. The CRA says that, as of July 31, it has received 868 calls and 361 written submissions from potential informants.
The CRA also expects to start hiring tax professionals this fall to focus on offshore tax evasion and aggressive tax avoidance. “These individuals will assist in auditing high-risk multinational corporations and unraveling complex offshore schemes to crack down on tax cheats, a strategy that will collect an estimated additional $500 million in revenue over five years,” according to the release.
Lebouthillier also highlighted Canada’s participation in the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC), which aims to cooperate with 30 foreign tax administrations to coordinate tax compliance, and said Canada will continue to collect and share an increasing amount of data.
“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,” said Lebouthillier.
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