The three countries announced an investigation Thursday into offshore trusts and companies — in tax havens such as Singapore, the British Virgin Islands, Cayman Islands and Cook Islands — that were used to “conceal assets by wealthy individuals and companies.”
Governments in the three countries obtained more than two million documents on thousands of people worldwide that identify the owners of the offshore entities, as well as the accountants, lawyers and other advisers who helped establish them. Holding an offshore account is not illegal and doesn’t necessarily indicate wrongdoing as long as the related income is reported.
“The message is simple: If you evade tax, we’re coming after you,” U.K. Chancellor of the Exchequer George Osborne said in a statement.
The announcement came a day after the Harper government trumpeted its new efforts on tracking tax cheats, and about a month before world leaders discuss tax evasion at the G8 summit in Northern Ireland.
While the Harper government isn’t part of the multi-country investigation, it has received promises that relevant information on Canadians will be shared.
“I have reached out to the Government of the United Kingdom and secured a commitment that information relevant to Canada stemming from this data will be shared,” Revenue Minister Gail Shea said late Thursday in a statement.
“My officials have also made formal requests to the American and Australian tax administrations for the information in their possession. I would like to thank HM Revenue and Customs, the U.S. Internal Revenue Service and the Australian Taxation Office for their close collaboration.”
The investigation by the three countries includes information that is believed to overlap with data obtained by the International Consortium of Investigative Journalists (ICIJ), including the CBC.
The massive leak of sensitive financial information obtained by the investigative journalism group identified approximately 130,000 people worldwide, including what’s believed to be about 450 Canadians, with accounts in offshore tax havens.
Shea has threatened to use all legal means — including possibly taking the CBC to court — to obtain the ICIJ information, which allegedly contains details on Tony Merchant, a high-profile lawyer from Saskatchewan who’s married to a Liberal senator.
However, that same information may now be available from other countries.
The IRS in the United States, Australian Tax Office and HM Revenue & Customs in the United Kingdom have been analyzing the data and have uncovered information they say may be relevant to tax administrations in other countries.
The three countries, in separate statements, said they are planning to share the information if it’s requested by other jurisdictions.
“This is part of a wider effort by the IRS and other tax administrations to pursue international tax evasion,” said IRS acting commissioner Steven T. Miller. “Our cooperative work with the United Kingdom and Australia reflects a bigger goal of leaving no safe haven for people trying to illegally evade taxes.”
More than 100 Australians have been identified from the data. The UK has also identified more than 100 people of its own benefitting from the offshore entities, many of whom are under investigation, as well as more than 200 UK accountants, lawyers and advisers.
The federal government is planning to slash more than $300 million from the CRA’s total budget and approximately 3,000 jobs over the next three years — at the same time the Conservatives are vowing to bolster efforts to combat the multi-billion-dollar problem of offshore tax evasion.
Shea announced this week the Canada Revenue Agency will create a new “SWAT team” and reinvest $30 million over the next five years as part of its efforts to crack down on Canadians with accounts hidden in offshore tax havens.
It’s part of a series of measures to combat domestic and offshore tax evasion, including having the CRA pay rewards to whistleblowers, of up to 15 per cent of the federal tax collected, for information leading to tax assessments exceeding $100,000.
Also, the government will require banks and other institutions to report international electronic fund transfers of $10,000 or more.
Somewhere between $21 trillion and $32 trillion in unreported global financial wealth is socked away in tax havens, according to former McKinsey & Co. chief economist James Henry in research conducted for the Tax Justice Network.
Canadians for Tax Fairness estimates international tax havens alone are costing Canada at least $7.8 billion annually.
Original Article
Source: canada.com
Author: Jason Fekete
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