CRA has executed three search warrants in a criminal investigation of offshore tax evasion.
The search warrants took place on Feb. 14, 2018, during an investigation related to the data leak from the Panamanian law firm and corporate service provider Mossack Fonseca, says CRA in a release.
About 30 CRA criminal investigators, along with RCMP and West Vancouver Police, took part in the operation that unfolded in Calgary, West Vancouver and the Greater Toronto Area, searching for evidence with respect to the commission of offences against the Income Tax Act and the Excise Tax Act.
The investigation identified a series of transactions involving foreign corporations and several transfers through offshore bank accounts used allegedly to evade taxes, says CRA.
The agency acknowledges that it collaborated with domestic and international partners during the investigation, and that “significant contribution” came from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
This investigation is one of the 42 international/offshore tax evasion cases that CRA is currently investigating, which involve complex structures and potentially millions of dollars in taxes evaded. This is “consistent with our priority of focusing on sophisticated and well-organized tax evasion schemes,” says CRA.
The agency says it’s pursuing additional criminal investigations relating to the Panama Papers data leak.
“Wilfully failing to follow tax laws could result in serious consequences, including reassessments, the imposition of civil penalties and criminal tax investigations and prosecutions resulting in the imposition of court fines, jail time and a criminal record,” says CRA.
Under the income tax and excise tax laws, those convicted of tax evasion can face fines ranging from 50% to 200% of the evaded taxes and up to five years imprisonment. If convicted of fraud under Section 380 of the Criminal Code, a person can face up to 14 years in jail.