Minister of National Revenue welcomes the Offshore Compliance Advisory Committee’s recommendations and observations on the Agency’s response to the Panama and Paradise Papers leaks
June 11, 2019 Ottawa, Ontario Canada Revenue Agency
The Honourable Diane Lebouthillier, Minister of National Revenue, today issued the following statement:
“I thank the Offshore Compliance Advisory Committee (OCAC) members for their work and invaluable input in advising me and the Canada Revenue Agency (CRA) on the important topic of offshore tax compliance. The CRA has already made important program and policy changes as a result of the committee’s work.
Tax evasion and aggressive tax avoidance know no borders and our Government is committed to cracking down on tax cheating, here in Canada and offshore. The CRA supports all seven of the recommendations contained in the recent letter from the OCAC on how the Agency responded to data leaks of taxpayer information. The CRA also appreciates that the OCAC recognizes the various challenges the Agency faces in reviewing and taking action on leaked data.
The information in the Panama and Paradise Papers leaks helps the CRA better risk assess and identify those who may be trying to hide assets offshore.
Over 1,100 taxpayer audits with offshore links are underway, while approximately 300 taxpayers have been identified for audit from information obtained in these leaks. Additionally, as of March 31, 2019, the CRA has over 55 ongoing investigations with an international component, with five linked to the Panama Papers.
These results have been driven by investments made over the last several budgets in the CRA’s offshore activities so that it has the tools and capacity to leverage global cooperation and data sharing. Those investments are helping the CRA invest in technology to obtain and analyse data, as well as recruit professionals, including auditors, and information technology and data specialists.
Steps the CRA has already taken to identify offshore tax cheats also include playing a leadership role in the Joint International Taskforce on Shared Intelligence and Collaboration. This network of more than 40 countries is a key forum for co-operation among tax administrations and serves as an agile mechanism for undertaking cross-border compliance and enforcement activities.
In 2018, the first exchanges through the Common Reporting Standard provided the CRA with information on Canadians’ overseas financial accounts. Information received helps the CRA identify financial accounts held in other jurisdictions to ensure that tax residents of Canada are meeting their Canadian tax obligations.
The Offshore Tax Informant Program (OTIP) is another effective tool for the Agency, as it provides additional information to identify those who may be hiding assets offshore. As of March 31, 2019, the OTIP has identified over $50 million in additional federal taxes and penalties and approximately $19 million has been collected.
Also in 2018, the CRA completed a tax gap study, specifically looking at how much investment income was hidden offshore by individuals. This information will help with the CRA’s compliance efforts going forward. The Agency's next tax gap study, to be released soon, will focus on incorporated businesses.
Working collaboratively with our international partners, we will continue our efforts to ensure a tax system that is fair and equitable, and those who choose to break the law will face the full consequences of their actions.”
Office of the Minister of National Revenue
Canada Revenue Agency
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