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Thread: Cdns hiding assets in offshore accounts

  1. #1

    Default Cdns hiding assets in offshore accounts

    Any thoughts on the feds' failure to pursue people that 'hide' their assets in foreign countries... plus I thought the leak of huge numbers of accounts in Europe was behind the voluntary disclosures - not any effort by the government.


    UBS clients lead Canadian surge in admitting hidden offshore income | Financial Post

    excerpt:

    Canadian Prime Minister Stephen Harper’s government should commit more resources to the revenue agency if it’s going to match efforts abroad, said Percy Downe,...
    “Why isn’t the minister of finance allowing more money into that department. What would $100 million do?”

    “The dramatic increase in voluntary disclosures is proof our government’s investments in combatting tax evasion and aggressive tax avoidance are working,” Rogers said in an e-mail."

    http://business.financialpost.com/20...?__federated=1

  2. #2

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    ^um, Canada has done quite a lot, both under the previous liberal government, and the current government. Keep in mind tax policy tends to be more driven by the Department of Finance and CRA, not the political party, if the Liberals win, this won't really change, its just political point scoring. The rules are complex, and its to a large extend driven by the tax information sharing agreements with other countries that have been entered into (and Canada has entered into a lot in recent years).

    The last thing we want though is a crazy FATCA type rules like they are doing in the US, forcing financial institutions all over the world to comply. Scotia bank alone has had to spend more than $100m on implementing these rules, the implementation costs for the US and other countries are way higher than the evasion they are seeking to end.

    I don't like tax evaders / cheats, but new programs like the ability to get a commision on cheats you tip off to the CRA, should hopefully help.

  3. #3

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    Maybe Canada has done quite a lot but I don't think the CRA deserves much credit. In the case of the leaked data below, it's hard to say whether the CBC beat the CRA to the punch or if the CRA was even going to take a swing at getting the data.

    Revenue Canada rejected secret tax haven files
    Revenue minister say agency now has data, credits 'collaboration with international partners'
    CBC News Posted: Jun 10, 2013
    excerpt:

    "The Canada Revenue Agency had an early chance to gain access to what is believed to be the largest-ever leak of tax-haven data, containing financial information on hundreds of Canadians involved in secretive offshore accounts, but missed out because of a policy of not paying for information, sources have told CBC News.

    On Monday, Revenue Minister Gail Shea rose in the Commons to say the government now has access to the data – over two months after the first media reports."...


    http://www.cbc.ca/news/canada/revenu...iles-1.1308967


    As for the influence of the political parties. After the senate scandal, etc. etc. etc., you should know better.


    Bronfman tax case back in federal court
    CBC News Posted: Jun 28, 2001 5:49 PM ET Last Updated: Jun 28, 2001

    The challenge was brought by a Winnipeg man, George Harris, who objected to Revenue Canada's decision to allow the wealthy Bronfman family to transfer a substantial amount of money out of the country tax free.
    ...
    When the family transferred $2 billion out of the country, the government waived the exit tax worth $700 million.
    ...
    "By definition, the federal court has no jurisdiction over the determination of as assessment that's been made by the minister," said Crown spokesman Peter Cramer. ..."

    http://www.cbc.ca/news/canada/bronfm...court-1.298637

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    /\Further to your comment about the influence of political parties in this issue, it should be clarified that it was a Liberal government that gave the Bronfmans the tax break, but it's only coincidental that a Bronfman is the Liberals Chief Fundraiser.
    http://www.huffingtonpost.ca/2013/08...n_3829369.html

  5. #5

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    As tax time approaches...




    Secret tax deal for wealthy KPMG clients sparked anger inside Canada Revenue Agency
    CBC News, Mar 08, 2016




    Court records indicate that at least 26 clients parked more than $130 million offshore in the KPMG scheme.
    ...

    One of the biggest mysteries is who exactly at CRA made the amnesty offer.

    The secret deal, leaked to CBC News in a brown envelope, was signed by CRA's manager of offshore enforcement, Stephanie Henderson, and sent to the accounting firm KPMG on May 1, 2015.

    http://www.cbc.ca/news/business/cra-...deal-1.3479792




    Last edited by KC; 09-03-2016 at 08:00 AM.

  6. #6

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    ^Cbc has been tracking that case for a while. I don't know the in's and out's of the plan, I think its a big assumption though to make, that this was a slam dunk case where penalties would have been applied. Maybe they should have prosecuted, but there are always maybes, and tax law isn't simple. That's going to be a judgment call for senior CRA, Justice, and sometimes also Finance officials, regardless of who the party in power is. Hopefully they are trained appropriately and have the right experience to make those calls, junior staff won't always understand them though, and even senior staff won't always agree. CRA wins about 50% of the cases it takes to tax court, but they lose about 50% as well, and they can end up with a significant bill for legal costs if get it wrong, especially if a negotiated settlement is offered (which appears to be the case here). If they turn down a settlement and lose, the legal bill will be higher (same for both sides).
    Last edited by moahunter; 09-03-2016 at 08:22 AM.

  7. #7

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    No mention of Canadians caught up in this yet.


    "The documents show links to 72 current or former heads of state... " see below

    "The leak reveals offshore holdings from 140 politicians and public officials..." see below

    About the Panama Papers
    By Frederik Obermaier, Bastian Obermayer, Vanessa Wormer and Wolfgang Jaschensky

    Generally speaking, owning an offshore company is not illegal in itself. In fact, establishing an offshore company can be seen as a logical step for a broad range of business transactions. However, a look through the Panama Papers very quickly reveals that concealing the identities of the true company owners was the primary aim in the vast majority of cases.


    http://panamapapers.sueddeutsche.de/...b8d3c3495adf4/
    A storm is coming
    By Frederik Obermaier and Bastian Obermayer

    http://panamapapers.sueddeutsche.de/...b8d3c3495adfc/



    http://panamapapers.sueddeutsche.de/en/
    Huge leak reveals elite's tax havens

    Panama Papers: Mossack Fonseca leak reveals elite's tax havens
    By Richard Bilton
    BBC Panorama
    2 hours ago

    A huge leak of confidential documents has revealed how the rich and powerful use tax havens to hide their wealth.
    Eleven million documents were leaked from one of the world's most secretive companies, Panamanian law firm Mossack Fonseca.
    They show how Mossack Fonseca has helped clients launder money, dodge sanctions and evade tax.
    The company says it has operated beyond reproach for 40 years and has never been charged with criminal wrong-doing.
    The documents show links to 72 current or former heads of state in the data, including dictators accused of looting their own countries.

    http://www.bbc.com/news/world-35918844

    https://www.icij.org/project/panama-papers

    https://panamapapers.icij.org/201604...-overview.html

    https://panamapapers.icij.org



    The Panama Papers: what you need to know
    What is Mossack Fonseca, how big is it, and who uses offshore firms? Key questions about one of the biggest ever data leaks

    Revealed: the $2bn offshore trail that leads to Vladimir Putin

    Iceland’s PM faces snap election over revelations

    Fifa faces new credibility crisis over leaked papers


    How much data has been leaked?
    A lot. The leak is one of the biggest ever – larger than the US diplomatic cables released by WikiLeaks in 2010, and the secret intelligence documents given to journalists by Edward Snowden in 2013. There are 11.5m documents and 2.6 terabytes of information drawn from Mossack Fonseca’s internal database.



    http://www.theguardian.com/news/2016...-panama-papers


    Panama Papers: Unprecedented Leak Reveals $2-Billion Offshore Trail to Putin
    By Daniel Politi


    The leak reveals offshore holdings from 140 politicians and public officials from around the world, including 12 current and former world leaders. Specifically, the documents show that several public officials in Iceland, including Prime Minister Sigmundur David Gunnlaugsson, Finance Minister Bjarni Benediktsson and the Minister of the Interior, Ólöf Nordal, all have ties to anonymous offshore companies.

    http://www.slate.com/blogs/the_slate..._to_putin.html


    Here are the famous politicos in ‘the Wikileaks of the mega-rich’

    http://fusion.net/story/287227/famou...mpanies-trove/

    Last edited by KC; 03-04-2016 at 03:21 PM.

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    And in other news, the rich get richer and the poor....

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    Gov't should ban corporate and wealthy from having offshore accounts.
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  10. #10

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    350 Canadians involved. I'm sure they are all legit of course.


    How banking is costing Canada billions of dollars a year
    An unprecedented leak of secretive offshore tax-haven data contains stunning new revelations about the diversion of wealth from government coffers to hidden bank accounts.



    Canadians named in the leak
    Here are some of the 350 whose passport images appear in the database...




    http://www.thestar.com/news/world/20...rs-a-year.html
    Last edited by KC; 04-04-2016 at 07:17 AM.

  11. #11

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    Just remember to file YOUR income taxes by April 30th or we will fine you heavily and charge you a high rate of interest.

    Sincerely,

    Your friendly neighbourhood Canada Revenue Agent.

    The nasty costs of not filing your taxes on time
    Tax day, otherwise known as “scramble to punch in those last few numbers” day, falls on a Saturday, meaning Canadians get a two day grace period until Monday May 2, to file their taxes. But take a day too long and you could wind up with a hefty tax bill.
    “You definitely should file on time,” says Sam Seidman, a Toronto-based accountant. “You’ve got until Monday to file – but they start ticking the clock from there.”
    Late filers will be hit with a penalty of five per cent of their 2015 balance owing and an additional one per cent of the balance owing for each full month the tax return is late up to a maximum of 12 months. Repeat offenders, those who’ve been hit with a late-filing penalty on previous returns for 2012, 2013, or 2014, could get hit with a 10 per cent late fee plus an additional two per cent of the 2015 balance owing for each full month the return is late up to 20 months.
    “So your tax bill can go up substantially – it’s a pretty big penalty,” he says. “I’ve seen people paying 35 per cent on their taxes owing.”
    DOUBLE STANDARD WARNING!

    Canada Revenue targeted progressive non-profits while wealthy tax dodgers get free pass

    his is a story about two rules of law: one for the rich and one for the rest of us. It's about a corrupt, politicized agency that is morally little better than the scammers who phone you around tax time and demand money with menaces.

    The CRA is supposed to be arms-length from government. But under the Conservatives, harassment of progressive charities with lengthy, expensive audits became the order of the day. $13.4 million was set aside by the previous regime precisely for this purpose, in what was to be an on-going activity of the CRA. Outside observers were struck by the political one-sidedness of the audits, which began in 2012 following government complaints about environmental “radicals.” CRA took on its task with gusto, and its bias was evident from the start. Even a small group of birdwatchers found itself in the CRA’s gunsights.
    To date, the grand Liberal promise to end these abuses has proven to be more sound than substance. While new audits have been put on hold, no fewer than 24 political audits of targeted progressive charities are continuing. Unbelievably, some of these groups have been under audit for up to four years, the clear intention being to drain their time and resources until they fold. As an example of CRA's duplicity in all this, the Canadian Centre for Policy Alternatives is being investigated for alleged "bias," while far-right groups like the Fraser Institute have been left alone.
    Far worse in terms of its effects on Canadians as a whole, however, are the recent revelations about a shady deal cooked up between high-level CRA officials and wealthy clients of the well-known accounting firm, KPMG. Literally billions of dollars are involved.
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    Lots of excuses flying around about CRA claiming that targeting wealthy tax dodgers is too expensive and time consuming.

    My mind is that you target them to the full extent of the law regardless of how much it costs to do. I don't care if it costs the taxpayer more to catch them than the CRA would recover. Hunt them down, expose them, and jail them. Otherwise this sham will continue forever.

    Just another illustration of why supply side, trickle down economics has never and will never work. Those who benefit don't reinvest in the economy. They leech from it, hide their money, and refuse to give back to the society that gave them their wealth.

  13. #13

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    Quote Originally Posted by Jaerdo View Post
    My mind is that you target them to the full extent of the law regardless of how much it costs to do. I don't care if it costs the taxpayer more to catch them than the CRA would recover. Hunt them down, expose them, and jail them. Otherwise this sham will continue forever.
    So you would jail people without proof that they had done something illegal? There is a big difference between relying on your accountant or lawyer to provide financial advice, especially if its a reputable firm, and intentionally going out and not paying taxes. I don't know the ins and outs of this case, but you are making a big leap. I don't like it when people avoid their taxes, I don't like it when someone thinks up a scam to avoid taxes, but "thinking" you are legitimately using a loophole (whether that is legitimate or not), is different from lying (which is what a sham is).

    As to the Panama papers, I think its going to be interesting to see what comes of it. I like the idea that people cannot hide money, and I like the idea that everyone pays tax on the money they earn. If there is tax evasion going on that these types of releases shed light on, that's a good thing. Just as important as tax though is fraud, especially when we see multiple politicians on those lists.
    Last edited by moahunter; 04-04-2016 at 08:37 AM.

  14. #14

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    Quote Originally Posted by Jaerdo View Post
    Lots of excuses flying around about CRA claiming that targeting wealthy tax dodgers is too expensive and time consuming.
    But if you owe the CRA a few hundred dollars, they will hunt you down like wolves.

    Last fall, the CRA screwed up my mother's taxes and said that she owed a few hundred to them for some error in her claim (done by a large accounting firm) in 2013 and that they listed the penalties for the missing funds. After supplying them with all the documents showing that the CRA was in error and they actually owed my mother several thousands of dollars, the CRA wrote back that they agreed with our documents but will get back to us in AUGUST 2017!
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    Quote Originally Posted by moahunter View Post
    So you would jail people without proof that they had done something illegal?There is a big difference between relying on your accountant or lawyer to provide financial advice, especially if its a reputable firm, and intentionally going out and not paying taxes. I don't know the ins and outs of this case, but you are making a big leap. I don't like it when people avoid their taxes, I don't like it when someone thinks up a scam to avoid taxes, but "thinking" you are legitimately using a loophole (whether that is legitimate or not), is different from lying (which is what a sham is).

    As to the Panama papers, I think its going to be interesting to see what comes of it. I like the idea that people cannot hide money, and I like the idea that everyone pays tax on the money they earn. If there is tax evasion going on that these types of releases shed light on, that's a good thing. Just as important as tax though is fraud, especially when we see multiple politicians on those lists.
    I never said once that I would jail people without proof. I said that people who do evade taxes should be hunted down and jailed, instead of being given a pass because charging them is too expensive/difficult. Also, there is zero difference between committing a crime and hiring someone else to commit a crime for you. If you hire an accountant to evade taxes, you are just as guilty as they are.

    If these people are truly using "loopholes", then the loopholes need to be closed. The intent of the law is clear: pay your damn taxes. As PRT says, us average joes have to pay every cent. The billionaires of the world seem to get a pass, despite being able to shoulder the cost with ease.

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    I don't think tax evaders belong in jail. If there is no proof of fraudulent intent, then they should only be required to pay their taxes owing, plus interest. If they are plead guilty to criminal fraud, then they should be required to pay double. If they plead not guilty and are convicted, they should pay the full cost of their prosecution as well.

  17. #17

    Default Sounds like a typical Liberal Leader

    Besides RBC, The Toronto Star reports some 350 Canadians' names were found in documents linked to Mossack Fonseca. By the CBC's count, there are 450 Canadian names linked to the leak, including Liberal Sen. Pana Merchant of Saskatchewan. Her husband, Tony Merchant, moved nearly $2 million to offshore financial havens while waging a battle with Canada Revenue Agency, the CBC said.
    http://www.huffingtonpost.ca/2016/04...n_9608364.html

  18. #18

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    Don't throw stones when we have not seen the whole list.
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    Exactly. I'm going to take a wild guess and say there's a few Conservatives on the list, too.

  20. #20

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    maybe a couple of NDP's too! LOL
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  21. #21

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    Inversions, Panama schemes mean the ordinary wage-earner gets stuck paying the taxes: Don Pittis - Business - CBC News
    http://www.cbc.ca/news/business/inve...dary-1.3521358



    Panama Papers taunt the masses with more proof that game is rigged - Business - CBC News
    http://www.cbc.ca/news/business/pana...nald-1.3520491
    Last edited by KC; 06-04-2016 at 08:19 AM.

  22. #22

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    ^ oh, please. Looks like CBC feels they have to publish something just to be part of the wave, but really having nothing to add. Which simple Simon believes rich and poor are playing on a level field. No need for this "massive" leak to make that point. Also, tax engineering can be done in plain sight too, not in off-shore accounts. When a crony capitalist like Buffett (constantly on the top ranks of world's wealthiest list) pays less tax than his secretary in his own words, who needs paper leaks to know the "game is rigged".

    Also I find this leak broadly speaking a bit fishy. Actual data is not released, like WikiLeaks (Source). After one year of investigative journalism on this, by their account, all I have seen so far is reports on how massive the leak is etc. No smoking guns, mostly public psychology stuff, but really what did anybody think is happening in "tax havens". Most of the stuff so far I see is legal, maybe not ethical. Then again what Buffett does is the same, no? And it affects 2nd and 3rd tier rich politicians and business people. Looks like somebody carefully found a target, big enough to make a wave but not too big to harm any big fish, or fat cats or whatever. Then on the back this wave, President Obama quickly changes tax inversion regulations in US, pretty interesting timing, no? hmmm....

    Again, I am not defending off-shore tax planning. The problem is our laws/regulations which our politicians have spent decades to make sure abundant complex legal loopholes exist in it for their backers and donors.
    Last edited by FamilyMan; 06-04-2016 at 10:58 AM.

  23. #23

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    First casualty

    Panama Papers: Iceland PM Sigmundur Gunnlaugsson steps down
    http://www.bbc.com/news/world-europe-35966412

    Iceland's prime minister has stepped down - the first major casualty of the leaked Panama Papers that have shone a spotlight on offshore finance.
    The leaks, from Panama-based law firm Mossack Fonseca, showed Sigmundur Gunnlaugsson owned an offshore company with his wife but had not declared it when he entered parliament
    He is accused of concealing millions of dollars' worth of family assets.
    Mr Gunnlaugsson says he sold his shares to his wife and denies any wrongdoing.
    He is one of dozens of high-profile global figures mentioned in the 11.5 million leaked financial and legal records, which were first published on Sunday.

    Pressure on Mr Gunnlaugsson to step down had been building since then, with thousands of people protesting outside the parliament building in the capital Reykjavik on Monday and opposition parties tabling a confidence motion.
    Earlier on Tuesday, the prime minister had asked President Olafur Ragnar Grimsson to dissolve parliament and call an early election.
    Other Panama Papers reaction
    • Fifa president Gianni Infantino signed off on a TV rights contract with businessmen subsequently accused of bribery, leaked documents show
    • France returns Panama to a list of countries which fail to co-operate over tax evasion
    • Panama says it is considering retaliatory measures against France, but reiterates that is ready to co-operate with any investigations stemming from the leaks
    • Chile: the country head of the anti-corruption watchdog Transparency International, Gonzalo Delaveau, steps down after his name emerges in the documents
    • US President Barack Obama says tax avoidance is a global problem and governments should not make it easy for illegal funds to move around the world
    • Pakistan Prime Minister Nawaz Sharif orders judicial investigation into allegations of family links with offshore companie
    s
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    Quote Originally Posted by Edmonton PRT View Post
    First casualty

    Panama Papers: Iceland PM Sigmundur Gunnlaugsson steps down
    http://www.bbc.com/news/world-europe-35966412

    Iceland's prime minister has stepped down - the first major casualty of the leaked Panama Papers that have shone a spotlight on offshore finance.
    The leaks, from Panama-based law firm Mossack Fonseca, showed Sigmundur Gunnlaugsson owned an offshore company with his wife but had not declared it when he entered parliament
    He is accused of concealing millions of dollars' worth of family assets.
    Mr Gunnlaugsson says he sold his shares to his wife and denies any wrongdoing.
    He is one of dozens of high-profile global figures mentioned in the 11.5 million leaked financial and legal records, which were first published on Sunday.

    Pressure on Mr Gunnlaugsson to step down had been building since then, with thousands of people protesting outside the parliament building in the capital Reykjavik on Monday and opposition parties tabling a confidence motion.
    Earlier on Tuesday, the prime minister had asked President Olafur Ragnar Grimsson to dissolve parliament and call an early election.
    Other Panama Papers reaction
    • Fifa president Gianni Infantino signed off on a TV rights contract with businessmen subsequently accused of bribery, leaked documents show
    • France returns Panama to a list of countries which fail to co-operate over tax evasion
    • Panama says it is considering retaliatory measures against France, but reiterates that is ready to co-operate with any investigations stemming from the leaks
    • Chile: the country head of the anti-corruption watchdog Transparency International, Gonzalo Delaveau, steps down after his name emerges in the documents
    • US President Barack Obama says tax avoidance is a global problem and governments should not make it easy for illegal funds to move around the world
    • Pakistan Prime Minister Nawaz Sharif orders judicial investigation into allegations of family links with offshore companie
    s
    I hear David Cameron who is British PM could be next to step down ??
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    And Cameron's lot are slashing about $60/week from disability benefits over there.
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  26. #26

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    This is the 'go to' site for news on the leaked information.

    https://panamapapers.icij.org

  27. #27

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    Quote Originally Posted by FamilyMan View Post
    ^ oh, please. Looks like CBC feels they have to publish something just to be part of the wave, but really having nothing to add. Which simple Simon believes rich and poor are playing on a level field. No need for this "massive" leak to make that point. Also, tax engineering can be done in plain sight too, not in off-shore accounts. When a crony capitalist like Buffett (constantly on the top ranks of world's wealthiest list) pays less tax than his secretary in his own words, who needs paper leaks to know the "game is rigged".

    Also I find this leak broadly speaking a bit fishy. Actual data is not released, like WikiLeaks (Source). After one year of investigative journalism on this, by their account, all I have seen so far is reports on how massive the leak is etc. No smoking guns, mostly public psychology stuff, but really what did anybody think is happening in "tax havens". Most of the stuff so far I see is legal, maybe not ethical. Then again what Buffett does is the same, no? And it affects 2nd and 3rd tier rich politicians and business people. Looks like somebody carefully found a target, big enough to make a wave but not too big to harm any big fish, or fat cats or whatever. Then on the back this wave, President Obama quickly changes tax inversion regulations in US, pretty interesting timing, no? hmmm....

    Again, I am not defending off-shore tax planning. The problem is our laws/regulations which our politicians have spent decades to make sure abundant complex legal loopholes exist in it for their backers and donors.
    Companies can be set up for all kinds of legitimate purposes. Blocker corporations, limiting liabilities on offshore purchase, facilitating transactions, etc. There are likely also very legitimate reasons for hiding ones ownership via such corporations.

    However, there are likely a lot illegitimate more reasons for hiding one's interest. This leak, from just one such company, is interesting because it reveals connections that were intended to remain hidden and which may create the odd linkage to illegitimate activities. It might be the push that's needed to increase transparency on a lot of such activities - but I doubt it.

  28. #28
    Giving less of a damn than ever… Can't laugh at the ignorant if you ignore them!

  29. #29

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    The second article is linked to by the first. Maybe this leak will somehow hurt Clinton and Trump but help Sanders.

    http://www.thenation.com/article/the...the-beginning/

    http://www.motherjones.com/kevin-dru...-day-spotlight
    Last edited by KC; 06-04-2016 at 01:35 PM.

  30. #30

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    Quote Originally Posted by KC View Post
    Quote Originally Posted by FamilyMan View Post
    ^ oh, please. Looks like CBC feels they have to publish something just to be part of the wave, but really having nothing to add. Which simple Simon believes rich and poor are playing on a level field. No need for this "massive" leak to make that point. Also, tax engineering can be done in plain sight too, not in off-shore accounts. When a crony capitalist like Buffett (constantly on the top ranks of world's wealthiest list) pays less tax than his secretary in his own words, who needs paper leaks to know the "game is rigged".

    Also I find this leak broadly speaking a bit fishy. Actual data is not released, like WikiLeaks (Source). After one year of investigative journalism on this, by their account, all I have seen so far is reports on how massive the leak is etc. No smoking guns, mostly public psychology stuff, but really what did anybody think is happening in "tax havens". Most of the stuff so far I see is legal, maybe not ethical. Then again what Buffett does is the same, no? And it affects 2nd and 3rd tier rich politicians and business people. Looks like somebody carefully found a target, big enough to make a wave but not too big to harm any big fish, or fat cats or whatever. Then on the back this wave, President Obama quickly changes tax inversion regulations in US, pretty interesting timing, no? hmmm....

    Again, I am not defending off-shore tax planning. The problem is our laws/regulations which our politicians have spent decades to make sure abundant complex legal loopholes exist in it for their backers and donors.
    Companies can be set up for all kinds of legitimate purposes. Blocker corporations, limiting liabilities on offshore purchase, facilitating transactions, etc. There are likely also very legitimate reasons for hiding ones ownership via such corporations.

    However, there are likely a lot illegitimate more reasons for hiding one's interest. This leak, from just one such company, is interesting because it reveals connections that were intended to remain hidden and which may create the odd linkage to illegitimate activities. It might be the push that's needed to increase transparency on a lot of such activities - but I doubt it.
    You hit the nail on the head. This is very "interesting" stuff, (more accurately, entertaining stuff) let's look who's name is there etc. In terms of actual effect, as I said, when we feel comfortable with Buffett, why bother.
    Last edited by FamilyMan; 06-04-2016 at 03:07 PM.

  31. #31

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    Well, we will see in a couple of month what actually comes out of this. David Cameron resign, oh don't make me laugh....Even the Iceland PM (a 2nd/3rd tier politician, in terms of global importance, as I noted in my original post) has NOT resigned:

    http://icelandmonitor.mbl.is/news/po...press_release/

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    ^ Anything but relinquish power, I guess. A new coat of Teflon being applied as we speak, no doubt.

    But hey, what's this?
    http://www.bbc.com/news/world-europe-35983450
    Last edited by howie; 06-04-2016 at 04:38 PM.
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  33. #33

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    This says it well.

    The Panama Papers Actually Reflect Pretty Well on Capitalism - Bloomberg View
    http://www.bloombergview.com/article...-on-capitalism

  34. #34

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    ^I had a similar thought. Its not the capitalist politicians who are mostly doing this stuff (there are some exceptions like the Icelandic case), its mostly the despot regimes - places that are ostensibly socialist or communist, or real or pseudo dictatorships, where the money is being stolen and hidden. If you want less of this stuff, we need more capitalism / democracy (i.e. transparency) and less socialism / fascism (i.e. controlled media).
    Last edited by moahunter; 07-04-2016 at 07:58 AM.

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    American executives' names surface in Panama Papers.

    http://www.usatoday.com/story/news/2...imes/82704788/
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    Quote Originally Posted by moahunter View Post
    ^I had a similar thought. Its not the capitalist politicians who are mostly doing this stuff (there are some exceptions like the Icelandic case), its mostly the despot regimes - places that are ostensibly socialist or communist, or real or pseudo dictatorships, where the money is being stolen and hidden. If you want less of this stuff, we need more capitalism / democracy (i.e. transparency) and less socialism / fascism (i.e. controlled media).
    Funny, there's more capitalists than socialists here, though. Even a certain Mrs. Thatcher's son.
    http://www.mirror.co.uk/news/uk-news...nclude-7704862
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  37. #37

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    I also find that logic funny. First, this is one leak, how about other companies in other havens. Who knows how many capitalists are there. Second, as I have repeated by now a few times, capitalism has provided an internal loophole that allows the like of Buffett to dodge tax without need of shell companies. So it is not like it is much better. Lastly, by that logic, Chinese Politburo can also claim communism is good, as only a few Chinese name are there.

  38. #38

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    Quote Originally Posted by FamilyMan View Post
    I also find that logic funny. First, this is one leak, how about other companies in other havens. Who knows how many capitalists are there. Second, as I have repeated by now a few times, capitalism has provided an internal loophole that allows the like of Buffett to dodge tax without need of shell companies. So it is not like it is much better. Lastly, by that logic, Chinese Politburo can also claim communism is good, as only a few Chinese name are there.
    Well balanced comment. Thanks.

    As for Buffett, for decades he has complained about the unfairness of tax certain policy and decades ago explained how avoiding taxes can improve compounded returns. Three or four decades ago he complained about the lack of taxation on trading profits. In the 1970s he used incredibly complex financial arrangements to his benefit, to the point that the SEC started investigating the cross-holdings structure to see if it was legitimate. In the end it was apparently legal but as a result of the investigation Buffett and Munger dramatically simplified their holdings structure - very likely to some direct financial cost to the company's shareholders.

    That said, I have an RRSP, TFSA, CDN Fed government issued annuity, etc. - all, partly, because they did or do confer tax benefits. Owning a growth stock that doesn't pay dividends also confers incredible tax avoidance benefits (but it's not tax evasion) and Buffett has maximized that potential. If it's legal, you may not like it philosophically, but you may still take advantage of it. I admire Buffett for at least speaking up about the various taxation problems and highlighting the unfairness it grants people of his means vs. the average person.
    Last edited by KC; 07-04-2016 at 12:25 PM.

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    Tax avoidance is perfectly legal. You can avoid taxes by deferring capital gains, through holding company structures that huge numbers of small business owners use, by contributing to an RRSP or TFSA, and so on. There's a million and one perfectly legitimate and legal avenues for tax avoidance.

    It's evasion that's illegal. And unfortunately, there's not always a clear line between avoidance and evasion.

  40. #40

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    Quote Originally Posted by Marcel Petrin View Post
    Tax avoidance is perfectly legal.
    Not really, Canada has anti tax avoidance legislation (the GAAR rules). Its not generally criminal, but it is illegal to avoid your taxes.

  41. #41

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    Quote Originally Posted by Marcel Petrin View Post
    Tax avoidance is perfectly legal. You can avoid taxes by deferring capital gains, through holding company structures that huge numbers of small business owners use, by contributing to an RRSP or TFSA, and so on. There's a million and one perfectly legitimate and legal avenues for tax avoidance.

    It's evasion that's illegal. And unfortunately, there's not always a clear line between avoidance and evasion.
    And when you add the offshore holdings it gets very difficult to determine whether it's an avoidance or evasion or other tactic. It's often Canadian lawyers setting up these companies so to some extend they are likely all technically initially legal.

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    Quote Originally Posted by moahunter View Post
    Quote Originally Posted by Marcel Petrin View Post
    Tax avoidance is perfectly legal.
    Not really, Canada has anti tax avoidance legislation (the GAAR rules). Its not generally criminal, but it is illegal to avoid your taxes.
    This might be a semantic debate, and I think you're an accountant of some sort so it's probably not a debate I'll win, but:

    https://en.wikipedia.org/wiki/Tax_avoidance

    Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law.
    Also: http://www.investopedia.com/terms/t/tax_avoidance.asp

    Tax avoidance is the use of legal methods to modify an individual's financial situation in order to lower the amount of income tax owed. This is generally accomplished by claiming the permissible deductions and credits. This practice differs from tax evasion, which is illegal.

  43. #43

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    ^Agreed that's the traditional definition from Duke of Westminster:

    “Every man is entitled if he can to arrange his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure that result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax” (IRC v Duke of Westminster [ 1936 ] AC1 (HL)).
    Canada has moved away from that (most countries have to some extent) - our GAAR may over-ride that if you enter into an avoidance transaction that results in an abusive tax benefit.
    Last edited by moahunter; 07-04-2016 at 01:36 PM.

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    Fair enough then!

  45. #45

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    The grand lesson to it all is that "legally" acquired wealth is portable. Our society can't count on the owners of wealth to keep it in Canada for the maximum benefit of our society. Hence, the idea that we should let entities build great wealth through lower taxes along the way may in the end be misguided. The favour may not be returned.

    If you look at Buffett and Gates they are spending their money to help the world's worst off people. Some of it will be spent in the US but much of it will likely be spent in Africa, etc.. This is great and good and in many ways non-discriminatory. Moreover, much of their money was made globally. If you're an American though, who enabled that buildup of wealth through lower taxes and minimal estate taxes, your assumption is that that wealth will stay in the country to further build the country.

    Here in Alberta wealth may be made through exploiting our non-renewable resources and to see someone ultimately walk away with it means that that wealth will then be spent in other tax jurisdictions and not ours and not to the benefit of our future generations. Basically it's just like personal wealth. If you work a year and have nothing to show for it but basic sustenance during the year you really have to wonder what your future looks like without savings. Here in Alberta we exploit our resources with some expectation that converting those resources to cash flow will build productive capacity (savings/investments) into the future.

    Of course, in exchange for exporting our oil, we import wealth - but that's the name of the game. We embrace the game but if you're the "House" you never want to see the winners cash out and leave.
    Last edited by KC; 07-04-2016 at 07:03 PM.

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    British people is asking PM Cameron to resign over Panama papers.

    http://www.cbc.ca/news/trending/resi...pers-1.3526603
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  47. #47

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    The database is going public today.

    Can't say I'd want to sacrifice any of my life to looking at legal mumbo jumbo.

  48. #48

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    Quote Originally Posted by KC View Post
    The grand lesson to it all is that "legally" acquired wealth is portable. Our society can't count on the owners of wealth to keep it in Canada for the maximum benefit of our society. Hence, the idea that we should let entities build great wealth through lower taxes along the way may in the end be misguided. The favour may not be returned.
    How many times do you want to tax the wealth? If its generated in Canada or the U.S., it gets taxed here, at least once, maybe twice if from a company to an individual (to the extent integration isn't perfect). What a lot of people don't realize is if you stuff a bunch of money in Caymans, sure, you can probably illegally evade taxes, but you also probably get next to no return on your investment versus investing it in north America and being taxed on it. Its easy to not pay tax if you aren't' making money. I think we are going to find that much of the money hidden isn't ostensibly to avoid or evade taxes (some will be, through elaborate plans), rather, the bulk of it will be:

    - corruption related (politicians, businesspeople in developing countries)
    - people hiding from a divorce, or
    - legitimate business reasons (e.g. operating in countries with lax laws). The owners of WEM set up offshore for this reason (per news articles), re a potential investment in a developing country.

    Not all, but a lot.
    Last edited by moahunter; 09-05-2016 at 08:58 AM.

  49. #49

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    I agree on your three likely points, but I'm not sure about the no return aspect of putting it into offshore accounts. If it's off-shored but invested in index funds or some such investment vehicle, and it's not taxed again then it can compound quite significantly and it can pass on to family without a deemed disposition.

    On the other hand, maybe it's all about banks ripping off customers for useless allocations or about paranoid individuals getting money out of Canada.


    1 tax haven, 3 of Canada’s biggest banks, 2,000 offshore companies
    A new leak of tax haven data lists firms that may be legitimate, but the sheer number has drawn the attention of watchdogs concerned about the relationship Canada’s banks have forged with island tax havens over the past half-century.


    RBC, CIBC and Scotiabank appear conspicuously throughout the database of 175,500 corporate registrations on the island nation, which has earned an international reputation as one of the most secretive financial jurisdictions in the world.

    According to the data, RBC registered 847 companies, CIBC registered 632 and Scotiabank registered 481 in the Bahamas between 1990 and this past May.

    The leaked records provide never-before-seen details behind the intimate relationship Canada’s banks have forged with island tax havens over the past five decades. Some experts even credit Canada’s banking industry with helping pioneer offshore wealth movement to no-tax and low-tax jurisdictions in the Caribbean.


    There are legitimate reasons for setting up corporations offshore in traditional tax havens. And there is no evidence of any illegal activity in the corporate registration records, which were obtained through a leak to the International Consortium of Investigative Journalists (ICIJ) and German newspaper Süddeutsche Zeitung and shared with the Star and the CBC.

    “It just doesn’t make sense,” said Richard Leblanc, a leading corporate governance expert and professor at Harvard and York universities. “Why are there so many companies registered and such a high volume in a jurisdiction that doesn’t have the population base or the economy to support it? That’s a legitimate question.”

    ...
    Tax avoidance and evasion are the most obvious concern when secrecy prevails. But there are other more nefarious activities that can easily go undetected, say experts.

    “If you want to bribe someone, it’s a whole lot easier to do it offshore through an account that doesn’t have high regulatory oversight,” Leblanc said.

    For more than a century, Canadian bank executives have played an instrumental role in shaping the banking laws in tax havens, said Alain Deneault, a professor at the Université de Montréal and author of Offshore: Tax Havens and the Rule of Global Crime.

    Starting in the early 19th century and right through to the establishment of the modern offshore system in the 1960s, Deneault said, “Canadian banks customized the legislation in Caribbean tax havens for their purposes: They are states made to allow large companies and wealthy individuals to avoid paying tax.”
    ...




    https://www.thestar.com/news/world/2...companies.html
    Last edited by KC; 06-10-2016 at 12:59 PM.

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