The Offshore Compliance Advisory Committee (OCAC) says the names of those who have helped to set up tax dodges should be disclosed.
Earlier this year Minister of National Revenue Diane Lebouthillier announced the creation of an independent advisory committee on offshore tax evasion and aggressive tax planning. That committee has delivered its first report and recommends making several changes to the Canada Revenue Agency's (CRA) Voluntary Disclosures Program (VDP).
The VDP allows non-compliant taxpayers to come clean about their affairs and avoid some of the more severe penalties that might have applied if they had been found out by the CRA. The committee suggests that the current VDP may be too generous, as it provides substantially the same relief for any kind of disclosure.
Among other things, OCAC recommends more serious penalties for those who have made a deliberate effort to evade detection through the use of offshore vehicles, who have avoided large dollar amounts, or who cheated on their taxes for several years. In these kinds of cases, the committee says the amount of relief available under the VDP could be reduced by increasing the period for which full interest must be paid or by denying relief from civil penalties.
"No requirement to disclose the identity of advisers"
If taxpayers want to enjoy the benefits of the VDP, the report also says they should be required to hand over the names of the people who helped them set up their tax schemes.
"The CRA has confirmed that there exists no requirement to disclose the identity of advisers who assisted with non-compliance (by, for example, helping taxpayers set up offshore accounts or structures)," reads the report. "Such disclosures provide valuable information that could materially assist the CRA in identifying advisers that promote and enable offshore non-compliance. These advisers may be liable to third-party penalties or may be guilty of the offence of conspiring to enable tax evasion. The Committee believes that any person making a voluntary disclosure should be required to provide this information."
These are just some of OCAC’s recommendations. The full report is available on the CRA web site.