Today (April 11, 2016) the Canadian Minister of National Revenue has announced new measures to combat offshore tax evasion and aggressive tax avoidance. Ms Diane Lebouthillier (the Canadian Minister of National Revenue) has announced that the Government of Canada will invest over $444 million to enhance the Canada Revenue Agency’s (CRA) ability to detect, audit, and prosecute tax evasion – both at home and abroad.
Detection
In a press release the Canadian Government states that since January 2015, the Canadian Revenue Agency (CRA) has collected information on all international funds transfers over $10,000. Building on this new capability, Budget 2016 provides the Agency with the ability to more fully examine potential tax evasion across an entire jurisdiction. The first to be investigated will be the Isle of Man – additional jurisdictions will follow.
Audits and Investigations
The Canadian Government has also announced that in order to combat tax evasion and tax avoidance, the CRA will create a special program dedicated to stopping the organizations that create – and promote – these tax schemes for the wealthy. This will result in a twelve-fold increase in the number of tax schemes examined by the CRA. This team will apply penalties and refer cases for criminal investigation, where appropriate.
According to the Canadian Government the federal investment will give the CRA the ability to hire more auditors and specialists:
· This will increase the number of examinations focused on high-risk taxpayers – from 600 per year to 3000 per year;
· In addition, the new government funding will help the CRA bring in 100 additional auditors to investigate high-risk multinational corporations.
Penalties and Prosecution
The Minister has also announced that to make sure these investments deliver results, the CRA will embed legal counsel within investigation teams, so that cases can be quickly brought to court. Taken together, the CRA will use the latest investigative tools and technology, paired with larger investigative teams, to detect more cases of tax evasion that result in the appropriate charges, fines, and penalties.
In addition to this unprecedented investment, the Minister has also announced a number of concrete steps that the CRA will take, including:
· bolstering international collaboration to fight tax evasion,
· creating an independent advisory committee on offshore tax evasion and aggressive tax planning; and
· beginning work to estimate the tax gap, so that Canadians and Parliamentarians have confidence in the fairness of the tax system.
Click here to be forwarded to the press release as issued by the Canadian Government in this respect.
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