CBC Exclusive: Leaks reveal rich stashing up to $32 Trillion offshore

[SLM]

Taking the example to the extreme... RRSP contributions can easily be deemed 'avoidance' in terms of taxes payable during that time they are held in the account.

How far do we take this in trying to drink from both sides of the same cup here.

I get what you're saying, I do. But there are legal provisions written into the legislation covering personal taxes for things like RRSP, which are actually deferrals. You do pay tax on that income the moment you draw it out. You are simply legally entitled to, up to your contribution limit, defer paying tax until a later time. Avoidance is a legal term when it comes to taxes. Everyone wants to avoid paying taxes, there are legal ways in which to do so (tax deferals) and non legal ways (tax evasion). Hence the reason why I said the term is a grey area.

The question then becomes; Is that practice reasonable?

Whether it's reasonable or not, it is in black and white right at the beginning of the ITA. Good luck getting that one repealed. Lol.

Let me offer another extreme: SLM buys lots of gold jewelry knowing (believing) that gold as a commodity is a hedge against inflation and possibly a safer/better investment than bonds or securities.... Should the CRA have the right to assess a tax on the (potential) capital gains made on that jewelry over a defined period of time?

I know that it an extreme example, but it does go to the heart of the issue

Again, I get where you're coming from but, from a tax point of view, you are never taxed and do not have to report potential or unrealized capital gains or losses. You must report them and are taxed on them when you actual have the gain, once it's realized. So there is no legal way that the CRA can possibly be going after investments that remain investment and pay no interest or dividends. Because you were exactly right before, the investment itself is after-tax dollars. Income is either interest or dividends, whether that gets reinvested in the investment fund or is drawn out. Gains and losses don't come into effect until the investment is disposed of.

 

[captain morgan]

I get what you're saying, I do. But there are legal provisions written into the legislation covering personal taxes for things like RRSP, which are actually deferrals. You do pay tax on that income the moment you draw it out. You are simply legally entitled to, up to your contribution limit, defer paying tax until a later time. Avoidance is a legal term when it comes to taxes. Everyone wants to avoid paying taxes, there are legal ways in which to do so (tax deferals) and non legal ways (tax evasion). Hence the reason why I said the term is a grey area.

I did say that my example was at the extreme end of the spectrum.

Whether it's reasonable or not, it is in black and white right at the beginning of the ITA. Good luck getting that one repealed. Lol.

This is why the monies (or assets) are posted as an asset to a corporate entity set up in the jurisdiction of choice.

Nothing illegal about it, if done according to the local laws... As for the individual that funded the foreign entity - nothing illegal in starting a company in a foreign jurisdiction either

Again, I get where you're coming from but, from a tax point of view, you are never taxed and do not have to report potential or unrealized capital gains or losses. You must report them and are taxed on them when you actual have the gain, once it's realized. So there is no legal way that the CRA can possibly be going after investments that remain investment and pay no interest or dividends. Because you were exactly right before, the investment itself is after-tax dollars. Income is either interest or dividends, whether that gets reinvested in the investment fund or is drawn out. Gains and losses don't come into effect until the investment is disposed of.

I'm working on the general issue here SLM, people sell gold, jewelry, cars and other items thousands of times each day privately (hell, craigslist and kijiji exist almost exclusively to that ends)... I did state that the example was in the extreme, but the principle does remain.

That said, is it outlandish to think it would never happen?.... Had I asked you 6 months ago if a recognized foreign gvt would raid the accounts of their depositors to fund their deficit/debt, would you have believed me?

 

[Nuggler]

I best withdraw my $29.99 (cdn) from me Bermuda tax haven afore the feds come a knockin................

 

[DaSleeper]

We all play "hide the money" with the tax law....for example....I sell my old car to Joe for five thousand...I write him a one thousand...and a four thousand receipt as his proof that he paid me, and I know bloody well that he will show only the one thousand receipt when he registers it......for GST purposes...

 

[Nuggler]

We all play "hide the money" with the tax law....for example....I sell my old car to Joe for five thousand...I write him a one thousand...and a four thousand receipt as his proof that he paid me, and I know bloody well that he will show only the one thousand receipt when he registers it......for GST purposes...

True enough, but:: If the yokels at the license office are on the ball, they simply open the blue book and charge you the "true value" for the car, but they never imply you broke the law.............Still saves Joe some money probably.

 

[taxslave]

When you consider the number of freeloading socialists that are always looking for someone else to pay their freight is it any wonder people with a few bucks make the effort to hide it. All this missdirected wory about the job makers and no worrries about the billions that drug cartels stash away. But carry on believing the ones that make the economy tick are evil.

 

[Goober]

This is the case I was referring to earlier
5 big leaks of offshore financial data - Interactive - CBC News.ca
Firm: LGT Bank, Liechtenstein

No. of accounts: 5,800

No. of Canadian names: 106

Who leaked: Heinrich Kieber, a former data clerk at LGT, sold four DVDs of client info to the German secret service for $5.5 million. Info was also provided to American, Australian and Canadian tax authorities.

Tax recouped: Germany says it has recovered hundreds of millions in unpaid taxes; the Canada Revenue Agency says it's found $22.4 million in unpaid taxes and has actually collected $8 million of that.

 

[petros]

Tax recouped: Germany says it has recovered hundreds of millions in unpaid taxes; the Canada Revenue Agency says it's found $22.4 million in unpaid taxes and has actually collected $8 million of that.

When and where are the property auctions? Gotta love a good seizure sale. No reserves.

 

[Goober]

When and where are the property auctions? Gotta love a good seizure sale. No reserves.

Do you recall the Govt a number of years back that allowed a Trust- rumored to be a billion or more- move out of the country to avoid taxes??

 

[petros]

The guy that is the CDN go to man in Beijing?

 

[Goober]

The guy that is the CDN go to man in Beijing?

What?

 

[PoliticalNick]

It seems like a good opportunity to crackdown on tax evasion.

I have done some research on this subject while working with Canada-Uncut. The one thing you have to be really careful of is the terminology. What these people and corporations are doing is not illegal therefore not tax evasion. It is called tax avoidance and is generally done within the legal parameters of the the nations involved. The staggering fact is that we lose over 100 times more in tax revenue annually through avoidance than we do through evasion. If there is a difference to be made it is not through catching crooks but through closing loopholes and taxing corporations and individuals that operate/work in Canada but are registered in places like Liberia and Barbados.

 

[mentalfloss]

I have done some research on this subject while working with Canada-Uncut. The one thing you have to be really careful of is the terminology. What these people and corporations are doing is not illegal therefore not tax evasion. It is called tax avoidance and is generally done within the legal parameters of the the nations involved. The staggering fact is that we lose over 100 times more in tax revenue annually through avoidance than we do through evasion. If there is a difference to be made it is not through catching crooks but through closing loopholes and taxing corporations and individuals that operate/work in Canada but are registered in places like Liberia and Barbados.

Evasion, avoidance - whatever the case is that is proven that money is not where it is supposed to be and that use is illegal.


Off shore leaks set to reveal more embarrassing tax dodging

The list detailing the identities of thousands of people hiding money in offshore accounts could reveal 160 times more data than Wikileaks.

Analysing the details of what is now become known as Offshore Leaks will take some time, according to Catherine Boss, a journalist at Swiss paper Sonntagszeitung, who worked on the investigation to track the hidden cash.

“It’s just the beginning. We have only looked at about 10 percent of the Swiss businessmen and women involved and we’ll continue to work on it.”

Working across 170 countries, the International Consortium of Investigative Journalists (ICIJ) compiled the list of 130,000 names.

“The mega-wealthy have lots of choices about how they organise their financial lives and the average citizens of the world have very few choices. The average citizen generally ends up having to pay more, or live with fewer services in their home countries because of the drain of funds from their country’s treasuries,” said ICIJ member and one of Offshore Leak’s senior editors Michael Hudson.

The co-treasurer of French president Francois Hollande’s 2012 campaign, Jean-Jacques Augier, was one of the first to be outed, but he maintains he did nothing illegal.

It is estimated 25 trillion euros could have been hoarded away in banks that ask few questions. Offshore leaks has mainly checked out bank accounts in the British Virgin Islands.

Offshore Leaks set to reveal more embarrassing tax dodging | euronews, world news

 

[Cannuck]

The staggering fact is that we lose over 100 times more in tax revenue annually through avoidance than we do through evasion.

That's only part of the problem. Skip to 7:30

http://www.cbc.ca/player/News/Politics/Power+&+Politics/ID/2216537880/

 

[darkbeaver]

32 trillion dollars? they have months, perhaps,to exchange that for something valuable