The Canada Revenue Agency has made an out-of-court settlement with wealthy KPMG clients caught using an offshore tax scheme that it previously said was ‘intended to deceive’ tax authorities. (Peter Scobie/CBC)
Federal authorities demanded secrecy in no-penalty, no-prosecution deal to high net worth Canadians
Harvey Cashore, Dave Seglins, Kimberly Ivany · CBC News · Posted: Mar 08, 2016 5:00 AM ET | Last Updated: March 8, 2016
On top of this recent news about KPMG and the CRA along with the current government back tracking on cracking down on tax havens, here is related news from 2016. It shows the Liberal and Conservative MPs and government in 1980 ignored the warnings from newly elected MP and Finance critic Bob Rae and others concerned about the consequences of tax treaties with Barbados and other off shore countries.
“… He pointed to a company, not named, that shifted $318 million in investments to a subsidiary in Barbados. The investments earned $37 million over just six months, on which a sliver of income tax was paid to Barbados. The rest could be sent back to Canada tax-free, and then paid out as dividends to the company’s shareholders — who themselves would enjoy generous dividend tax credits. Meanwhile, the parent company, having borrowed money to fund its subsidiary, deducted the interest it was paying as an expense and ended up with a loss on its books in Canada — so it paid no tax here. …”