Friday, August 26, 2016

Tax Evasion Will Persist Until Parliament Hill Steps Up

Your winnings, sir!
It seems like every year a new tax haven scheme is revealed, provoking the ire of Canadians... only to fade from the news a few months later.

In 2008, tax evasion schemes involving the Swiss bank UBS and the Liechtenstein's LGT bank were revealed, and quickly relegated to the back pages. It was followed by more leaks, the last in date, involving the KPMG scheme at the Isle of Man and the Panama Papers.

Last spring, the NDP pushed through a motion to study more specifically the KPMG tax scheme involving the Isle of Man, where the tax consulting firm hatched a plan to create empty shell corporations in the British territory, implemented 15 plans involving 25 Canadians who made tax-free "donations" to the offshore companies.

The CBC/ICI Radio-Canada investigation demonstrated that these companies produced nothing and provided no services. But they gradually gifted the money back to these individuals, sums that were never declared to the Canada Revenue Agency.

Court documents suggest that KPMG was paid a commission of up to 15 per cent of the tax dodge for each of these individuals (KPMG admitted to taking a flat rate of $100,000 for each of the 15 plans).

The five meetings held by the Finance Committee on this topic were frustrating to the extreme. It was next to impossible to get meaningful answers from either KPMG representatives (hiding behind attorney-client privileges) or the Canada Revenue Agency (hiding behind privacy concerns), while the Canadian government seemed to do its best to claim that everything was mostly fine, the rest was being taken care of.  (more...)


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