Canadian tax cheats come clean amid close scrutiny of offshore havens

[Azure]

Wealthy Canadians with money stashed overseas have come forward in droves to confess their misdeeds after secret lists began circulating with the names of people apparently evading taxes in foreign banking havens.

The Canada Revenue Agency has seen the number of voluntary disclosures of foreign, unreported income rise dramatically since 2007, when it received the first such list from Liechtenstein naming 106 Canadians with accounts in secretive banks there.

http://www.theglobeandmail.com/news/...ticle11185762/

I know, lower taxes are always nice, but the law is the law, and I find it pretty disgusting how rich people avoid following the law to get out of paying their taxes.

[Sluggo]

It would be a good time for the government to be lenient to people who reveal their funds now and warn those that don't that the penalty will increase. I'm sure that news of the circulating lists and the raiding of the Cyprus tax haven has them worried.

[Locke]

Originally Posted by Sluggo

It would be a good time for the government to be lenient to people who reveal their funds now and warn those that don't that the penalty will increase. I'm sure that news of the circulating lists and the raiding of the Cyprus tax haven has them worried.

I think the opposite. Its time to make tax treatment standard and uniform and to stop offering leniency, amnesty, deals and loopholes.

Make your stand. Be clear and dont back down.

Much of it stems from other issues. In my experience the average Canadian doesnt mind paying their taxes, its part of living in this great nation, what average Canadians do mind is rich Canadians getting away with murder and all the while watching the Government waste their tax money on signs in French and other superfluous crap.

[puckluck2]

Meh, if I could evade taxes, I'd do it in a heart beat too.

[AR_Six]

Originally Posted by Sluggo

It would be a good time for the government to be lenient to people who reveal their funds now and warn those that don't that the penalty will increase. I'm sure that news of the circulating lists and the raiding of the Cyprus tax haven has them worried.

This already exists. It's called the Voluntary Disclosure Program.

http://www.cra-arc.gc.ca/gncy/nvstgtns/vdp-eng.html

[Cowperson]

Originally Posted by Locke

I think the opposite. Its time to make tax treatment standard and uniform and to stop offering leniency, amnesty, deals and loopholes.

Make your stand. Be clear and dont back down.

Much of it stems from other issues. In my experience the average Canadian doesnt mind paying their taxes, its part of living in this great nation, what average Canadians do mind is rich Canadians getting away with murder and all the while watching the Government waste their tax money on signs in French and other superfluous crap.

CBS Sunday Morning did a feature today on the 100th anniversary of the introduction of personal income tax form in the USA.

Only the richest few Americans paid taxes initially and the highest rate was 7% in that first year. Shortly thereafter, with World War 1 coming round, the top rate went to 77%.

Only the wealthiest paid for 20 years before "fair" became an issue for them and the tax base was expanded to more ordinary Americans.

Today, the large majority of Americans feel a moral responsibility to pay their taxes but its all about "fair" regarding the overall acceptance of taxes. Most hate the process of putting their taxes together than they do the actual bill.

It's always the question of "what is fair?" and the struggle for society to find the right spot.

Cowperson

[AR_Six]

Originally Posted by Locke

I think the opposite. Its time to make tax treatment standard and uniform and to stop offering leniency, amnesty, deals and loopholes.

It's not really about principle for the fisc, it's all about collecting money. Realistically, no one thinks they're going to get caught when they do it, and deterrence isn't going to happen by virtue of stricter enforcement. People are generally aware of the consequences of evasion if they get caught.

If it costs more money to mount someone's head on a pike than you end up getting out of them, it's irresponsible to spend taxpayer money doing so. If a tax dispute can be settled at the administrative stage (i.e. before the tax court and ideally before it even goes up the chain in the CRA), it's more cost-effective for all parties. Voluntary disclosure, for example, is lenient precisely because it costs the government basically zilch, and it results in the recovery of funds. Whether or not it feeds an appetite for revenge on the fat-cats with their offshore accounts is irrelevant; practicality has to come first. We need to pay doctors and fix roads and such.

[Flame Of Liberty]

Originally Posted by Cowperson

CBS Sunday Morning did a feature today on the 100th anniversary of the introduction of personal income tax form in the USA.

Only the richest few Americans paid taxes initially and the highest rate was 7% in that first year. Shortly thereafter, with World War 1 coming round, the top rate went to 77%.

Only the wealthiest paid for 20 years before "fair" became an issue for them and the tax base was expanded to more ordinary Americans.

Today, the large majority of Americans feel a moral responsibility to pay their taxes but its all about "fair" regarding the overall acceptance of taxes. Most hate the process of putting their taxes together than they do the actual bill.

It's always the question of "what is fair?" and the struggle for society to find the right spot.

Cowperson

Fair is what people who pay no taxes or minimal taxes think is fair.

[Northendzone]

Originally Posted by puckluck2

Meh, if I could evade taxes, I'd do it in a heart beat too.

Great to hear, I am assuming that you'd evade services as well......

My favourite tax evasion manoeuvre was when pm Paul Martin had canda steamship lines registered in another country to avoid Canadian taxes......it annoys me when a regular working person who makes say $75,000 and pays say $10,000 in taxes, and then some rich guy who makes ten times that and pays about the same amount of taxes.......

[AR_Six]

Originally Posted by Northendzone

My favourite tax evasion manoeuvre was when pm Paul Martin had canda steamship lines registered in another country to avoid Canadian taxes......it annoys me when a regular working person who makes say $75,000 and pays say $10,000 in taxes, and then some rich guy who makes ten times that and pays about the same amount of taxes.......

I don't actually know the details here but why can't I register my business elsewhere for tax efficiency reasons? I'm Canadian, but if incorporating a company in Barbados and availing myself of reduced treaty rates on gains affords me better tax treatment, there is absolutely nothing wrong with that. That is how the law is written.

People need to stop equivocating between tax evasion, which is essentially fraud on the government perpetrated with the intention to not pay tax that is required to be paid under the law, and tax avoidance, which is structuring your affairs within the requirements of the law so as to minimize tax payable.

[Northendzone]

I hear what you are saying, but what would happen to the economy of the country if all companies did this....of course eventually the gov't would wind up closing the door.

I think as Canadians we have an obligation to our country to pay our fair share of taxes.

[para transit fellow]

Originally Posted by Northendzone

Great to hear, I am assuming that you'd evade services as well......

My favourite tax evasion manoeuvre was when pm Paul Martin had canda steamship lines registered in another country to avoid Canadian taxes......it annoys me when a regular working person who makes say $75,000 and pays say $10,000 in taxes, and then some rich guy who makes ten times that and pays about the same amount of taxes.......

except there are two Canada steamship lines. One is Canadian registered with Canadian ships plying Canadian waters. And one that is a multinational doing international routes.

(it's splitting hairs.. but I get annoyed at the mis-information)

[Azure]

Originally Posted by Northendzone

I hear what you are saying, but what would happen to the economy of the country if all companies did this....of course eventually the gov't would wind up closing the door.

I think as Canadians we have an obligation to our country to pay our fair share of taxes.

Pretty sure most companies try their best to pay the least amount of taxes as possible.

I don't like loopholes unless they serve a distinct purpose which all to often they don't. But I don't think you can consider them breaking the law.

Tax cheats on the other hand....

[onetwo_threefour]

Originally Posted by Northendzone

I hear what you are saying, but what would happen to the economy of the country if all companies did this....of course eventually the gov't would wind up closing the door.

I think as Canadians we have an obligation to our country to pay our fair share of taxes.

I'm not a huge fan of flags of convenience myself, but if one is a pure free-marketer, one could say that taking advantage of better tax rates elsewhere, when available, woyld apply pressure to the Cdn government to have competitive business tax rates to avoid the loss of that part of their tax base.

[The Yen Man]

Originally Posted by Northendzone

Great to hear, I am assuming that you'd evade services as well......

My favourite tax evasion manoeuvre was when pm Paul Martin had canda steamship lines registered in another country to avoid Canadian taxes......it annoys me when a regular working person who makes say $75,000 and pays say $10,000 in taxes, and then some rich guy who makes ten times that and pays about the same amount of taxes.......

I think you're confusing tax evasion with tax avoidance. As my old boss says, tax evasion is illegal, but tax avoidance is my right. If there is a legal loophole that you can exploit to pay less taxes, why wouldn't you take it? Everyone wants to minimize their tax payments. No one files their taxes thinking they paid too little in taxes. It's not up to me to not exploit a loophole, it's up to the government to close it.

[mykalberta]

Originally Posted by Azure

http://www.theglobeandmail.com/news/...ticle11185762/

I know, lower taxes are always nice, but the law is the law, and I find it pretty disgusting how rich people avoid following the law to get out of paying their taxes.

5th Estate had a good documentary on the weekend how the CRA can put people through he77 for avoiding taxes yet none of the Lichenstein account holders have been taken to court and at least 1/3 of them have been found to be avoiding taxes.

Definate double standard, I wonder if there are some wealthy political contributors on the list.

Ive always wondered, I always thought people moved the money there after they already paid taxes on it to avoid future tax on future earnings in Canada. So you move your taxed money offshore so no future taxes can be had.

I guess Ive never had the kind of scratch to research it fully

[Oil Stain]

Originally Posted by Northendzone

Great to hear, I am assuming that you'd evade services as well......

My favourite tax evasion manoeuvre was when pm Paul Martin had canda steamship lines registered in another country to avoid Canadian taxes......it annoys me when a regular working person who makes say $75,000 and pays say $10,000 in taxes, and then some rich guy who makes ten times that and pays about the same amount of taxes.......

I would think that that doesn't actually happen though.

Maybe a rich guy makes $1,000,000 plus a year and gets off only paying $150,000 in taxes instead of $250,000.

Rich guy is upset he pays the taxes of 20 normal people, and wants to keep more of it.

[mykalberta]

Originally Posted by AR_Six

It's not really about principle for the fisc, it's all about collecting money. Realistically, no one thinks they're going to get caught when they do it, and deterrence isn't going to happen by virtue of stricter enforcement. People are generally aware of the consequences of evasion if they get caught.

If it costs more money to mount someone's head on a pike than you end up getting out of them, it's irresponsible to spend taxpayer money doing so. If a tax dispute can be settled at the administrative stage (i.e. before the tax court and ideally before it even goes up the chain in the CRA), it's more cost-effective for all parties. Voluntary disclosure, for example, is lenient precisely because it costs the government basically zilch, and it results in the recovery of funds. Whether or not it feeds an appetite for revenge on the fat-cats with their offshore accounts is irrelevant; practicality has to come first. We need to pay doctors and fix roads and such.

It depends, is one millionaires head on a pike going to send a message to the rest of them. Lose one guys payment to get many others. The other way sounds like there is a double standard in place.

The CRA should only care about getting the money. However if someone is seen to be purposefully abusing the system then examples need to be made to keep everyone else in line IMO. If the only deterrent to not paying your taxes is if you get found out then you eventually have to pay - that is no deterrent to anyone.

[Cowboy89]

Originally Posted by onetwo_threefour

I'm not a huge fan of flags of convenience myself, but if one is a pure free-marketer, one could say that taking advantage of better tax rates elsewhere, when available, woyld apply pressure to the Cdn government to have competitive business tax rates to avoid the loss of that part of their tax base.

Agreed. Free and open with minimal capital controls are wonderful things for the world.

Sometimes I ask my old man about what it was like fiscally back in the day in Canada and realize that if you go back to even as recent as 20 years ago, we had tax brackets that weren't indexed for inflation, so as time went on the middle class kept creeping into the highest tax brackets, RRSP ownership restrictions that limited your ability to invest in foreign markets to only 18% of your RRSP portfolio, and of course no TFSA's (Which in my opinion are really the greatest thing the government has done for the middle class in years). The only way to hide from punitive taxation it seems was to legally structure your assets offshore.

Everyone wants to tax and punish the so-called 'rich', which when put that way makes the 'rich' out to be these distant Mr. Burns types who live high on the hill in mansions and are not relatable. The above measures however were actually punatively taxing your nieghbors, friends and family, the middle and upper-middle classes.

[SeeBass]

Originally Posted by Northendzone

Great to hear, I am assuming that you'd evade services as well......

My favourite tax evasion manoeuvre was when pm Paul Martin had canda steamship lines registered in another country to avoid Canadian taxes......it annoys me when a regular working person who makes say $75,000 and pays say $10,000 in taxes, and then some rich guy who makes ten times that and pays about the same amount of taxes.......

I was more put out when the Seagrams family was able to move a billion $ across the CDN/US border and got away without paying tax on it.