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Canada left out of tax probe into leaked offshore data

05/09/2013 07:27 EDT | Updated 07/09/2013 05:12 EDT
The U.S., Britain and Australia announced today they've launched what could be the biggest ever international investigation into tax cheats, using what is believed to be largely the same massive leak of offshore financial records revealed last month by the CBC and other global media outlets.

So far, Australia has red-flagged 65 people for possibly hiding millions from the tax man, while Britain said it has identified more than 100 wealthy individuals allegedly using "complex offshore structures to conceal assets."

"The message is simple: if you evade tax, we're coming after you," British Chancellor of the Exchequer George Osborne, the country's equivalent of a finance minister, said in a statement.

It was not immediately clear why Canada was excluded from the partnership. A senior enforcement official at the Canada Revenue Agency said that the organization was aware of today's announcement and is working with countries with which it has agreements to share tax information.

The official was surprised, however, when CBC News told them that Britain has had the offshore data for nearly three years. "Is that right, eh? That's news to me," the official said.

It appears the data being used in the new probe is the same as, or includes, millions of tax-haven records that the CBC obtained from the Washington-based International Consortium of Investigative Journalists and that contain the names of at least 450 Canadians.

- Massive data leak exposes offshore financial secrets

Britain's tax agency said it received the 400 gigabytes of data in 2010. That is the same year that the ICIJ-obtained records end. However, that amount of information is more than the 260 GB that the ICIJ got.

The newly announced data trove is said to contain more than two million files — on par with the leak received by the ICIJ, which had about 2.5 million files on tens of thousands of secret offshore companies, including spreadsheets, emails, database entries and shareholder info.

The Australian Tax Office said it got the information in the last 18 months from another country. Neither the U.S. Internal Revenue Service nor Britain's tax authority disclosed where they got the data.

Canada has treaties with Britain and the United States under which it could have requested the offshore documents from them.

"It is curious why Canada is not participating, and I'd also like to know whether or not our government has requested access to this information," said Arthur Cockfield, a law professor at Queen's University in Kingston, Ont., and an expert on international tax.

"I'm not sure why the United Kingdom, if it had this information for so long, didn't simply on a spontaneous basis relay that information to the Canadian tax authorities."

The CRA has repeatedly pressed the CBC and the ICIJ to hand over their information, saying as recently as Wednesday that it will "pursue all means available to obtain" the records from the media organizations.

130,000 names

The leaked records obtained by the International Consortium of Investigative Journalists contain information spanning 30 years and 10 offshore tax havens around the world, most notably the British Virgin Islands in the Caribbean and the Cook Islands in the South Pacific. It is believed to be one of the largest ever leaks of financial data.

The files shed light on more than 120,000 offshore entities — including shell corporations and legal structures known as trusts — involving 130,000 people in over 170 countries.

A worldwide media network has turned up revelations in the data on high-ranking politicians and their confidantes, including the prime minister of Georgia and the former president of Colombia; hardened criminals such as a cabal of Russians who stole $230 million from the country's treasury in a colossal tax fraud; and business tycoons.

- Global reaction to offshore data leak

The U.S. Internal Revenue Service said in a statement on Thursday that it has agreed with the British and Australian tax agencies to share the data they obtained with other countries "if requested."

"It is expected that this multilateral co-operation and co-ordinated effort will allow many countries to efficiently process this information and effectively enforce any laws that may have been broken," the IRS said.

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