Wednesday, January 17, 2018

Loblaws in $400M tax fight with CRA over claims it set up bogus offshore bank

accountability transparency tax havens business corruption politics Loblaws

A senior judge warned Loblaws and the federal government this morning that she would not look kindly on any further procedural delays in a $400-million battle the two sides are waging in Tax Court.

Loblaws and the government were in a Toronto courtroom in one of the biggest offshore corporate tax-avoidance cases in the country, with authorities alleging the grocery conglomerate set up a bogus foreign bank to avoid tax on hundreds of millions of dollars in investment income.

The case has been brewing since 2015 and is slated for a full trial in April — more than a year after the originally scheduled start date, due to a series of procedural squabbles.

"I do not want to have to adjourn this again," Associate Chief Justice Lucie Lamarre cautioned both sides on Wednesday.

At stake for Loblaws is a huge potential tax bill: $404 million, including interest, penalties and provincial income tax, according to documents related to the case.

"These are all big numbers," said Peter Baek, a Toronto tax litigator and former senior CRA auditor experienced with offshore tax rules. 

Loblaws is facing scrutiny on other fronts as well, including its recent admission to a price-fixing scheme on the sale of bread in Canada, as well as revelations in the Paradise Papers exposing the company's use of offshore havens to shield profits.  (more...)


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accountability transparency tax havens business corruption politics Loblaws

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