Canadian Revenue Department Finds Corporate Tax Evasion Widespread

by Robert Lee, Tax-News.com, London

10 April 2002

A Revenue Canada internal analysis obtained by Canadian researcher Ken Rubin has revealed that many of the country's companies are paying little or nothing in the way of corporate income tax.

'There are many 'active' corporations paying little or no taxes,' noted the CCRA's compliance research directorate. 'Ongoing analysis to learn the fiscal impact of this trend and to attempt to ascertain its cause will be beneficial.'

According to figures amassed for the years 1995-1998, 64% of small Canadian firms with gross annual revenue of less than $15 million were assessed as zero tax. For businesses making $25,000 gross per year, the number paying little or no tax soared to 96%.

The revenue department document, according to Mr Rubin, showed that the percentage of larger companies not paying tax on earnings was around 6.5%. However, it was also revealed that 39.1% of the subsidiaries of those same companies paid no tax during the period in question.

The levels of 'creative' tax minimization among large companies are also high, according to the internal report, hovering at around 79%.

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