CRA Exposes More Offshore Shenanigans

If you’ve been following the UBS scare in the U.S. (see my previous post on this topic) please add the tiny state of Liechtenstein and the relatively large Canadian  institution known as RBC Dominion Securities to the list of names associated with offshore shenanigans.

The CBC reports that the Canada Revenue Agency is investigating 13 taxpayers who set up offshore accounts with LGT Group in Liechtenstein. These accounts were set up with the aid of Colin Ross, a former investment adviser at the Victoria branch of RBC.

Liechtenstein: Small, beautiful, and one of the tax community's best kept secrets

The CRA’s investigation, launched last year, found that certain foundations were set up and used by taxpayers to “masquerade as non-residents.” The agency says the taxpayers were “hiding their investments and other income” and “evading their obligation to pay Canadian tax.”

Of the 13 taxpayers implicated, some have made voluntary disclosures, and will therefore likely escape criminal charges and penalties. Others are under the gun for tax evasion, including  one Victoria woman who told investigators she felt having an offshore account was “glamorous”.

RBC  has released a statement disavowing any wrongdoing as a firm. The CRA is now investigating whether more Canadians are doing the same thing through RBC advisers across the country. But it won’t stop there. Revenue Minister Jean-Pierre Blackburn is quoted as saying “We will go after every other bank to obtain the list of their clients who do business abroad and to see if those clients declare their income.”

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