Canada’s war against tax avoid­ance ac­cel­er­at­ing, do­mes­ti­cally and on in­ter­na­tional fronts

The Pak Banker - - Company & Boss News -

BERNE: As Canada and the United States ramp up their ef­forts to re­duce tax avoid­ance and col­lect more taxes, our for­eign aid to cor­rupt regimes finds its way into Swiss bank ac­counts.

Canada's war against tax avoid­ance is ac­cel­er­at­ing, do­mes­ti­cally and on in­ter­na­tional fronts. rad­i­cal new leg­isla­tive pro­pos­als will, if en­acted, re­quire lawyers to breach their so­lic­i­tor-client priv­i­lege and re­port avoid­ance trans­ac­tions to the Canada rev­enue Agency. In­ter­na­tion­ally, Canada is on a binge of sign­ing ex­change of In­for­ma­tion treaties with tax and bank­ing havens. The most re­cent one with Switzer­land uses ob­scure lan­guage. Un­like many havens, Switzer­land is ac­tu­ally a full­tax ju­ris­dic­tion and is dili­gent in en­forc­ing its tax laws. There are strin­gent penal­ties for those who do not com­ply with their do­mes­tic laws. An im­mi­grant, for ex­am­ple, can­not be­come a Swiss na­tional un­less he or she proves tax com­pli­ance.

It is a dif­fer­ent story, how­ever, when it comes to help­ing other coun­tries en­force their laws. Swiss bank­ing se­crecy is le­gendary. It is the "go to" place to hide dirty money. Hence, Switzer­land has al­ways been the coun­try of choice for or­ga­nized crime, arms deal­ers, cor­rupt politi­cians, Nazis, African, Asian and South Amer­i­can dic­ta­tors, and rus­sian oli­garchs.

Tra­di­tion­ally, Switzer­land would not di­vulge in­come tax - re­lated in­for­ma­tion to for­eign gov­ern­ments be­cause it does not deem tax evasion fraud.

How­ever, fol­low­ing pres­sure from the United States govern­ment on the Union Bank of Switzer­land, the Swiss changed their laws to re­veal the names and iden­ti­ties of per­sons con­nected with tax fraud. The amended laws re­veal the names of some 4,500 ac­count hold­ers sus­pected of in­come-tax evasion in the United States.

Canada and Switzer­land also have agreed to ex­pand pro­vi­sions for the ex­change of in­come tax in­for­ma­tion. New treaty pro­vi­sions pro­vide for the tax au­thor­i­ties of the two coun­tries to ex­change such in­for­ma­tion as is "fore­see­ably rel­e­vant" for the ad­min­is­tra­tion and en­force­ment of the do­mes­tic tax laws for each coun­try.

Now, nei­ther coun­try can refuse to sup­ply in­for­ma­tion to the other coun­try solely be­cause the in­for­ma­tion is held by a bank or other fi­nan­cial in­sti­tu­tion or by any other per­son act­ing in a fidu­ciary capac- ity. The treaty gives the tax au­thor­i­ties the power to force com­pli­ance of tax­pay­ers and to com­pel dis­clo­sure of in­for­ma­tion re­quested. "Fore­see­abil­ity" has long been the lifeblood of the tort bar. It is a com­plex test de­vel­oped over nearly 80 years. It has never been used in tax laws, as it is too un­cer­tain a con­cept for fis­cal pur­poses.

The Canada-Switzer­land Pro­to­col has an in­ter­pre­ta­tive pro­to­col to guide of­fi­cials (and the ju­di­ciary) to de­ci­pher the mean­ing of "fore­see­ably rel­e­vant." The pro­to­col says that the ex­change of tax in­for­ma­tion be­tween the two coun­tries should be to the widest pos­si­ble ex­tent, but that Canada and Switzer­land can­not en­gage in "fish­ing ex­pe­di­tions" or request in­for­ma­tion that is un­likely to be rel­e­vant to the case in ques­tion. -PB News

HY­DER­BAD: Pro­vin­cial Min­is­ter for Ed­u­ca­tion Pir Mazhar-ul-Haq awards Gold Medal to stu­dent dur­ing 6th con­vo­ca­tion of In­sti­tute of Mod­ern Sci­ences & Arts at Sindh Uni­ver­sity old Cam­pus. -On­line

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