How a Canadian company avoided 1.4 billion in taxes by using an offshore subsidiary and what it means for Barbados
by Not Taken
Yet another interesting and scary for Barbados article in the business section of a major Canadian newspaper, The Globe and Mail: Cameco’s $800-million tax battle
I have been sending these recent articles as a public service so the Ministry of Finance and the Barbados Central Bank Governor have a heads up on the attack on Canadian tax evaders/avoiders that is undoubtedly about to hit the Barbados offshore industry; if in fact it has not already hit – but unreported.
This is very bad news for Barbados revenue sources.
While the Cameco case involves its Swiss subsidiary, it is probably just the tip of the iceberg in CRA’s efforts to collect taxes due to Canada. There must be hundreds, if not thousands, of “Canadaco (Barbados) Limited” businesses doing the same same transfer pricing schemes (scams) in order to pay 2% income tax to Barbados, rather than 27% to Canada.
Even those Canadian companies not not already being audited for this this type of tax “management” may decide for close up shop in Barbados to avoid the publicity that a CRA audit will bring.
Cameco’s CFO, retorts that Cameco Europe has its own board of directors and a full-time CEO, Gerhard Glattes, who has no other duties with the company. Cameco Europe provides Cameco with compensation for the management duties – like legal advice – it does not have its own staff for. “It was established in accordance with all relevant laws and regulations when it was set up.”
The Barbados registered Canadaco subsidiaries’ own boards of directors and full-time CEOs who have no other duties with the Canadian company should start planning for alternative sources of income. And of course it will have serious implications for the Barbados services providers; the legal community, the management/bookkeeping companies, and the accountants when it happens.