Canadian Revenue Announces Disclosure Increase

by Mike Godfrey, Tax-News.com, Washington

07 December 2009

Canada's Revenue Minister, Jean-Pierre Blackburn, has announced an almost two-fold increase in the number of taxpayers with funds offshore that have availed of the opportunity to disclose their liability to unpaid taxes.

Making the announcement, Blackburn credited the increase to a shift in government policy on tax evasion - a new ethos, in which taxpayers who fail to pay their taxes must face serious and significant consequences.

He reportedly disclosed that 6,798 taxpayers had come forward in the first seven months of the year, a 40% increase on the full twelve months of last year, reporting assets worth CAD1.66bn (USD1.58bn).

The increase is likely to have come as a direct result of the United States’ success in the cross border case against Swiss bank UBS, in which it gained a settlement forcing the bank to divulge information pertaining to the accounts of almost 5,000 of its most affluent US clients.

Having gained significant leverage from the outcome of this case, the Canadian government later announced the launch of its own investigation in the hopes of gaining access to information on funds deposited in UBS by Canadian taxpayers.

As yet there has been no announcement of progress in discussions between the two parties, and UBS has yet to comment. However, the Canadian government has this week said it would begin judicial proceedings soon if the bank continues to fail to yield to its requests, without giving a timescale.

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