Canadian Authorities Can’t Handle Offshore Cases
November 28, 2013 Taxation in Canada
OTTAWA – Canadian tax authorities been given both praise and warnings about their ability to adequately investigate cases of offshore tax evasion.
On November 26th the Office of the Auditor General of Canada released the annual Fall Report in which the Canadian Revenue Agency was praised for its handling of information leaked from Lichtenstein banking institutions in 2007 by Heinrich Kieber, a former employee at LGT Bank, but at the same time warned tax authorities that they are still not fully prepared to handle the amount of new information and to maintain the necessary levels of investigations arising from the increased level of tax data received from overseas.
In the report the Auditor General, Michael Ferguson, noted that the investigations conducted by the CRA into the offshore tax affairs of the 182 Canadians whose names were uncovered as a result of the leak has already yielded CAD 24.651 million in additional tax collections to the government coffers.
He also pointed out that the unique new experience obtained by the officers of the CRA during these investigations will allow them to better pursue other offshore tax evaders, as investigators now have a larger understanding of the structures, methods, and means used to hide incomes from the national tax net.
However, in the face of the newly obtained knowledge the CRA is “…not prepared for the growing workload in this area… and…the Agency needs to formalize and communicate its procedures to make sure that it can handle the increased amounts of information it is receiving.”
Overall, despite the largely positive assessment of the Auditor General, the reports of the national media still show some skepticism on how well national tax authorities have handled the “Lichtenstein case”, with special mention of the fact that almost 40 percent of the listed tax evasion suspects have still not been audited.
Photo by hto2008