CRA seeks Panama Papers to search for new clues about tax cheats
Some of what's in the leaked documents may even be new to the Canada Revenue Agency
The Canada Revenue Agency wants to get its hands on the so-called Panama Papers to see if they contain any new information about fraudulent tax activity that some Canadians may be involved in.
On Monday, a consortium of international journalists released the first stories based on the trove of more than 11 million documents leaked from Panamanian law firm Mossack Fonseca. The papers offer an incomplete paper trail of numbered companies and hard to trace bank accounts in tax havens around the globe, and a snapshot of the people — some famous, but many not — who have toeholds there.
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The leaked documents reportedly show the offshore dealings of more than 100 politicians and public figures from multiple countries, including Iceland, Ukraine, Pakistan and Russia.
In and of itself there's nothing illegal about having a foreign bank account, or a quasi-anonymous numbered company in a tax haven. But under Canadian tax law, Canadians with foreign investments are required to report all income earned outside Canada to the CRA.
"The Canada Revenue Agency is committed to combating the abusive use of offshore jurisdictions and protecting the integrity of the Canadian tax system," the CRA said in a statement Tuesday, adding that it is currently pursuing audits related to tax evasion, "including some Canadian clients associated with law firm Mossack Fonseca."
The tax agency already has many tools at its disposal to crack down on tax scofflaws, and has seen a surge in voluntary disclosures in recent years since international banking and taxation agencies have worked more closely together to share information and strike down centuries-old banking secrecy laws.
But some of what's in the Panama Papers may even be new to the CRA.
"The minister of national revenue has instructed CRA officials to obtain the data leaked through the Panama Papers in order to cross-reference this information with the data already obtained through the agency's existing investigation tools," the CRA said.
"The CRA will be communicating with its treaty partners to obtain any further information that may not currently be in its possession." As it stands, the CRA has tax treaties with 92 different countries and 22 Tax Information Exchange Agreements.
The recent federal budget beefed up the CRA's funding to combat tax fraud, allocating more than $440 million in new spending to the agency.
Under a whistleblower program established in January 2014, Canadians who give the tax agency information on possible tax fraud that nets more than $100,000 in unpaid taxes could be eligible for an award of between five and 15 per cent of what's recovered.
Since the program started, the CRA has received calls from over 800 individuals and is reviewing over 120 cases.