Rev­enue agency seeks off­shore records

Medicine Hat News - - NATION -

OT­TAWA The Canada Rev­enue Agency is seek­ing in­for­ma­tion from three Cana­dian banks about cus­tomer trans­ac­tions linked to a ma­jor Is­raeli fi­nan­cial in­sti­tu­tion as part of a fed­eral crack­down on off­shore tax evaders.

Newly filed court records re­veal the agency wants to see ac­count records as­so­ci­ated with Bank Hapoalim to de­ter­mine whether Cana­di­ans are hid­ing in­come or as­sets.

The Fed­eral Court of Canada fil­ings come amid re­newed pub­lic pres­sure on the gov­ern­ment to show it is tak­ing steps to find and pe­nal­ize Cana­di­ans who im­prop­erly use off­shore ac­counts to avoid taxes.

Like many for­eign banks, Bank Hapoalim has cor­re­spon­dent ac­counts in Canada to con­duct Cana­dian dol­lar trans­ac­tions on be­half of its cus­tomers, the rev­enue agency says. The bank op­er­ates in Is­rael and is af­fil­i­ated with other fi­nan­cial ser­vices com­pa­nies in Switzerland, Lux­em­bourg, the United States and the Cay­man Is­lands.

The agency is ask­ing the Bank of Mon­treal, Royal Bank and Toron­toDo­min­ion Bank for records of de­posits, cheques and elec­tronic funds trans­fers as­so­ci­ated with Bank Hapoalim’s cor­re­spon­dent ac­counts from April 1, 2011, to Sept. 30, 2017.

The records will be re­viewed and an­a­lyzed un­der the di­rec­tion of the agency’s off­shore com­pli­ance sec­tion and, where war­ranted, lead to for­mal au­dits.

Stephanie Hen­der­son, man­ager of the sec­tion, says in an af­fi­davit the agency is aware of Cana­dian tax­pay­ers who have pre­vi­ously used Bank Hapoalim “to con­ceal in­come and as­sets,” shield­ing off­shore ac­tiv­i­ties from the tax­man.

Through one au­dit, the agency be­came aware of a Cana­dian tax­payer who main­tained bank and in­vest­ment ac­counts for over 10 years at Bank Hapoalim in U.S., Cana­dian and Is­raeli cur­ren­cies, Hen­der­son says. “This tax­payer failed to re­port the in­ter­est in­come earned on ac­count bal­ances and ne­glected to dis­close as­sets held off­shore to­talling ap­prox­i­mately $11 mil­lion.”

In an­other case, a Cana­dian had bank and in­vest­ment ac­counts with Bank Hapoalim and failed to re­port $1.5 mil­lion in in­come and ap­prox­i­mately $5 mil­lion in re­portable off­shore as­sets.

The agency has also learned of off­shore ac­tiv­i­ties in Bank Hapoalim through the fed­eral vol­un­tary dis­clo­sure pro­gram, which gives peo­ple a sec­ond chance to file a tax re­turn and ask for re­lief from penal­ties.

From April 1, 2015, through March 31 of this year, 114 Cana­dian tax­pay­ers made vol­un­tary dis­clo­sures in­volv­ing the Is­raeli bank, Hen­der­son says. The dis­clo­sures cov­ered $59 mil­lion in un­re­ported in­come — such as in­ter­est, div­i­dends and cap­i­tal gains — re­sult­ing in $17 mil­lion in fed­eral taxes.

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