Par­adise Papers: CRa to in­ves­ti­gate new ev­i­dence of tax eva­sion

The Miracle - - National & Int -

The Canada Rev­enue Agency says it won’t hes­i­tate to in­ves­ti­gate new ev­i­dence of off­shore tax eva­sion in the wake of a sec­ond mas­sive leak of tax haven fi­nan­cial records. The leak of some 13.4 mil­lion records, dubbed the Par­adise Papers, lifts an­other veil on the of­ten murky ways in which the wealthy – in­clud­ing more than 3,000 Cana­dian in­di­vid­u­als and en­ti­ties – stash their money in off­shore ac­counts to avoid pay­ing taxes. Among the names that pop up in the records with some con­nec­tion to off­shore ac­counts are for­mer Cana­dian prime min­is­ters Brian Mul­roney, Paul Martin and Jean Chre­tien, the Queen, U.S. com­merce sec­re­tary Wil­bur Ross, and the past and cur­rent chief fundrais­ers for the fed­eral Lib­eral party. Nei­ther the CRA nor any court has de­ter­mined the Cana­di­ans did any­thing wrong. Off­shore ac­counts are used by wealthy in­di­vid­u­als and cor­po­ra­tions around the world as a per­fectly le­gal way to re­duce their tax bur­den, al­though the anonymity pro­vided to ac­count hold­ers has also led to as­so­ci­a­tions with tax eva­sion, money laun­der­ing and or­gani ed crime. The Par­adise Papers were ob­tained by Ger­man news­pa­per Sud­deutsche eitung and the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists, in­clud­ing CBC Ra­dio Canada and the Toronto Star which pub­lished de­tails on Sun­day. The me­dia out­lets did not dis­close how they ac­quired the doc­u­ments, which con­sist pri­mar­ily of client records of off­shore law firm Ap­pleby, as well as some records from off­shore cor­po­rate ser­vices firms Estera and Asiac­iti Trust. In an ap­par­ent at­tempt to pre-empt the news re­ports, the CRA is­sued a state­ment last Fri­day, de­tail­ing the agency’s ef­forts to crack down on tax eva­sion and tax avoid­ance, which in­ten­si­fied fol­low­ing the first huge leak of tax-haven records, known as the Panama Papers, in April 2016. The agency said it’s in­vested $1 bil­lion to tackle the prob­lem and cur­rently has more than 990 au­dits and more than 42 crim­i­nal in­ves­ti­ga­tions un­der­way re­lated to off­shore tax havens. As a re­sult of au­dits over the last two years, the CRA said it iden­ti­fied some $25 bil­lion in un­paid taxes, in­ter­est and penal­ties. And last year, it levied more than $44 mil­lion in penal­ties on tax ad­vis­ers who fa­cil­i­tated non­com­pli­ance with Cana­dian tax laws. The agency said it’s also work­ing closely with 36 other coun­tries in the Joint In­ter­na­tional Task­force on Shared In­tel­li­gence and Col­lab­o­ra­tion on more ef­fec­tive ways to de­tect and deal with tax eva­sion and avoid­ance. Ev­i­dently an­tic­i­pat­ing Sun­day’s re­lease of the Par­adise Papers, the CRA promised to do more should new de­tails of ques­tion­able prac­tices emerge. “In the event that fur­ther de­tails come to light, CRA will not hes­i­tate to in­ves­ti­gate and take fur­ther ac­tion as war­ranted, the agency said. “The gov­ern­ment of Canada will con­tinue to work with the prov­inces and ter­ri­to­ries, as well as other tax ad­min­is­tra­tions and all other part­ners, to en­sure a tax sys­tem that works for Cana­di­ans. In ad­di­tion, 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 and are held ac­count­able for their ac­tions. A spokesman for Na­tional Rev­enue Min­is­ter Diane Le­bouthillier, said on Sun­day that “the CRA is re­view­ing links to Cana­dian en­ti­ties and will take ap­pro­pri­ate ac­tion in re­gards to the Par­adise Papers. Tax avoid­ance mea­sures in­volv­ing off­shore trusts are le­gal, pro­vided that the trust is gen­uinely man­aged off­shore and that Cana­dian taxes are paid on any Cana­dian con­tri­bu­tions. Ac­cord­ing to the Toronto Star and CBC Ra­dio Canada, the records sug­gest that Stephen Bronf­man and his fam­ily’s Mon­treal-based in­vest­ment com­pany, Clar­idge Inc., were linked to an off­shore trust in the Cay­man Is­lands that may have used ques­tion­able means to avoid pay­ing mil­lions in taxes. Bronf­man is a close friend of Prime Min­is­ter Justin Trudeau, who tapped him in 2013 to fill the role of rev­enue chair – ef­fec­tively, the chief fundraiser – for the fed­eral Lib­eral party. The off­shore trust also in­volved for­mer chief Lib­eral fundraiser and se­na­tor Leo Kol­ber and his son, Jonathan Kol­ber. Wil­liam Brock, a lawyer for Bronf­man and Jonathan Kol­ber, de­nied any im­pro­pri­ety, telling the CBC that his clients “have al­ways acted prop­erly and eth­i­cally, in­clud­ing fully com­ply­ing with all ap­pli­ca­ble laws. Any sug­ges­tion of “false doc­u­men­ta­tion, fraud, dis­guised’ con­duct, tax eva­sion or sim­i­lar con­duct is false, Brock added. The Prime Min­is­ter’s Of­fice re­ferred ques­tions about Bronf­man to the Lib­eral party. Party spokesman Brae­den Ca­ley said Bronf­man’s role is strictly a vol­un­teer po­si­tion de­voted to fundrais­ing, “not pol­icy de­ci­sions. The rev­enue chair is a “non-vot­ing po­si­tion on the party’s na­tional board, Ca­ley added. Con­ser­va­tive leader An­drew Scheer is­sued a state­ment on Sun­day ac­cus­ing Prime Min­is­ter Justin Trudeau of fail­ing to crack down on “tax avoid­ance schemes used by his wealthy friends. “Justin Trudeau’s well­con­nected Lib­eral friends get away with pay­ing less, and you pay more. There is noth­ing fair about that, the state­ment said. Source: McLean’s

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