The Canadian government is widening their ever reaching grasp and going after all sorts of tax cheats including those who are in the real estate market. The developers of Trump Tower in Vancouver, the huge project at Wall Centre Central Park, are in hot water.
No less than the Minister of National Revenue himself went to the Federal Court of Canada to gather information from the developers regarding pre-sale condo buyers who got their contracts before the construction was completed. Just last July 19, the Canadian government filed 3 more applications to get further information on the pre-sale flippers in Vancouver. None of the companies involved in this fiasco have so far responded for the media?s requests for comments so far.
Tax Evaders Beware
The Canadian Revenue Agency (CRA) is going after all forms of tax evaders and not just focusing on developers. In view of this, a showdown is scheduled in October 2018 between a group of taxpayers and the government. The taxpayers in question argue that their Constitutional rights have been trampled by the actions that the CRA are taking to identify tax evaders. A 2-day hearing is scheduled to hear out both camps, focusing on the offshore tax compliance investigations which brought out the conflict.
The Minister of National Revenue says that audit techniques shouldn?t be disclosed. He says that the audit techniques and methods developed by and used by the CRA should be protected so as to not give away information that those who don?t wish to pay the right taxes can use.
Locked for Secrecy
Both sides want to keep their information and details private. The CRA wishes to keep their methods out of public information while the involved individuals do not want to give access to the details of their financial transactions both in Canada and abroad.
The CRA is currently doing all that it can to avoid further losses in revenue. In 2014, it is estimated that the agency lost between $0.8 billion and $3 billion in revenues from offshore investment incomes, after checking the numbers in that year and seeing that they are not lining up. In 2014, $13.2 billion was reported in capital gains, $9 billion in foreign income, and $429 billion was reported by corporations, trusts, and individuals in offshore assets. Furthermore, investigations for the taxes between 2014 and 2017 revealed that about $1 billion in additional income should have come from international focused audits and yet was not paid to the CRA. This resulted in more audits and reassessments which just uncovered more lapses.
Although the minister?s office did not give out an official interview, the agency did share that there are currently 260 ongoing investigations 50 of which are with offshore financial structure involvement. The number is still increasing.
Tax fraud isn?t just about CRA scams from people claiming to be from the CRA and telling people that they owe the CRA money. The ?big fish? tax fraud doesn?t just commit fraud against ?small-fry? victims, some of them are so bold that they decide to game the government and be big-time tax evaders.