Offshore Tax Cheats Safe in Canada–So Far.

21. August 2009 by Dan Walkow, CFA, CMT.

Canada’s rules on how it goes after tax cheats need to be seriously revamped if the Canada Revenue Agency is to have any hope of successfully prosecuting people who hide money in tax-haven banks, said Jean-Pierre Blackburn, the National Revenue Minister.

As it stands, the CRA does not have the ability to compel banks to report when account holders send money out of the country “but we should have that information that Mr. X or Madam Z did that,” Mr. Blackburn said in a telephone interview. “We need that information but we don’t have it. We need changes in the law.”

Led by the United States offshore investors who parked money in off shore tax havens are being hunted down and prosecuted. Fines, backtaxes, penalties and in some cases jail time. BUT NOT IN CANADA.

Swiss-based UBS Bank has been forced to supply the IRS in the United States with thousands of names of accounts and US persons who held accounts offshore. An amnesty program allows US persons to come forward, pay a reduced penalty but escape jail time.

Sleeping at the switch, the Canadian government is late to this party. Canadian offshore investors have been able to stay under the radar. HOWEVER don’t expect it to last much longer, Canada will fall in line with the US and make a big deal out of offshore tax cheats. It you stashed the cash offshore its time to find a tax person to dig you out of this looming probem.

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