For most understanding tax matters can be a brain-numbing experience. With the recent stories of the Panama papers, it may be a challenge to truly comprehend what this international tax scandal is really about, why it affects Canada, and how the Canada Revenue Agency (“CRA”) is getting involved.
Here’s some background:
The Panama Papers were leaked through an anonymous source. News sources are reporting that the papers contained 2.6 terabytes of data and were sent to a German newspaper. They consisted of spreadsheets, emails, and passports showing how the wealthy allegedly hid money in offshore accounts. Over 200,000 companies and 14,000 clients were connected to the leaks, not excluding powerful world leaders, such as Russian President, Vladimir Putin and Iceland’s Prime Minister, Signumdur Gunnlaugsson, who has recently stepped down from office amid the leaks.
With this in mind, this is the gist of the Panama papers…
Powerful individuals decided to set up companies in foreign countries. They transferred funds into these companies and then in many cases used the money for personal use without declaring the income. The real issue is that they didn’t report their offshore corporations to their tax agencies, nor did they claim to even own them. Hence, they would complete fraudulent transactions to get money into their corporations, and then use it for personal or even criminal purposes. This is actually the heart of the Panama Papers scandal.
While not everyone who opened an account in Panama did this for the wrong reason, it appears as though many were knowingly conducting illegal activities: Some misappropriated money and needed a place to hide it, and many others used these accounts to hide earnings and money from their local tax authorities.
And because keeping secrets from the CRA or any revenue agency is against the law, the Panama Paper leaks are like an early Christmas present for the CRA: now all they have to do is cross-reference information with the Panama papers to confirm their suspicions. Et voilà, many taxpayers will be in a huge amount of trouble.
If you are Signumdur Gunnlaugsson, Vladimir Putin, or any other world leader who has been hiding money, or if you are simply a Canadian taxpayer who is worried that the CRA may come after you we encourage you to call us. We can help!
At Barrett Tax Law we guarantee your anonymity and can start working on a plan right away. We work for you, not the CRA.
Call us today at 1-877-8-TAX-TAX (829-829) or visit our website to schedule a consultation with one of our award-winning tax lawyers.