Harper Government announces new measures to crack down on international tax evasion and aggressive tax avoidance

Ottawa, Ontario, May 8, 2013… The Honourable Gail Shea, Minister of National Revenue and Minister for the Atlantic Canada Opportunities Agency and the Honourable Maxime Bernier, Minister of State (Small Business and Tourism), today announced new measures to combat international tax evasion and aggressive tax avoidance, including a $30-million investment by the Harper Government and the creation of a dedicated team to implement measures from Economic Action Plan 2013.

Through these actions, the Canada Revenue Agency (CRA) will have an unprecedented ability to address these serious problems.

“Those who don’t pay their taxes by hiding money overseas place an unfair burden on law-abiding, hardworking Canadians,” said Minister Shea. “Our Government has long recognized that international tax evasion is a serious issue, and we are dedicated to cracking down on those who attempt to cheat the system.”

The Harper Government’s efforts to enhance the integrity of the tax system include a $30-million investment over five years for the CRA to target international tax evasion and aggressive tax avoidance. This includes:

• New resources of $15 million through Economic Action Plan 2013 to establish the necessary systems for the CRA to receive reports from banks and other financial intermediaries on international electronic funds transfers of $10,000 or more; and
• An additional $15 million in reallocated CRA funds that will be used to bring in new audit and compliance resources dedicated exclusively to international compliance issues and revenue collection identified as a result of measures outlined in Economic Action Plan 2013.

To ensure that these activities move forward quickly, a dedicated team of CRA experts will be created. This new team will be responsible for the implementation of the international tax evasion and aggressive tax avoidance measures announced in Economic Action Plan 2013. It will ensure that the full force of the agency’s international compliance and auditing resources are brought to bear on individuals or businesses seeking to hide money or assets offshore.

These actions will increase the CRA’s ability to audit, investigate, and pursue cases of international tax evasion and aggressive tax avoidance. Measures announced in Economic Action Plan 2013 include:

• Launching a new Stop International Tax Evasion Program that will allow the CRA to pay individuals with knowledge of major international tax non-compliance a percentage of federal tax collected as a result of the information provided;
• Requiring financial institutions and others who currently report information on international electronic funds transfers greater than $10,000 to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to also report those transactions to the CRA;
• Introducing additional requirements for Canadian taxpayers with foreign income or properties to report more detailed information, and extending the amount of time the CRA has to reassess those who have not properly reported this income.

“Our Government is providing the CRA with further resources to ensure our tax system remains fair for Canadians who work hard and play by the rules,” said Minister Bernier. “These new measures will provide additional tools to combat international tax evasion and aggressive tax avoidance, and improve the integrity of the tax system.”

The Minister of National Revenue has also directed the CRA to continue to pursue all means available to obtain information that the International Consortium of Investigative Journalists and its members hold on individuals with income or property held offshore, reportedly including 450 Canadians. Written requests from the CRA have already been sent to the International Consortium of Investigative Journalists as well as to the Canadian Broadcasting Corporation, underscoring the public interest in confidential disclosure of the information to the CRA.

Backgrounders

Combatting international tax evasion and aggressive tax avoidance

New CRA measures to combat international tax evasion and aggressive tax avoidance

Canada Revenue Agency

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