Canadian Government Broadcaster hires private investigator to expose Barbados tax haven loopholes

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What don’t these Canadian journalism types get about Barbados?

The answer is simple: The Canadian laws are not being broken, they are being used as they were intended.

It’s the same with the American IRS regulations. If the Americans, Brits and Canadians don’t want their citizens to transfer income offshore, then those governments should make it illegal and rescind the tax laws that make these schemes possible. Until that time, places like Barbados, the Cayman Islands and Bermuda will continue to welcome Canadian, American and Brit business people who can’t survive with the 30, 40 and 50 percent tax rates of their homelands!

Tax avoidance: Canada-Barbados tax deal loopholes revealed

An exclusive CBC News hidden-camera investigation into the world of offshore banking found professionals in Canada and Barbados willing to help hide business profits in Barbados by exploiting loopholes in a long-standing tax saving arrangement between the two countries.

“My advice to [the Canada Revenue Agency] would be, every time you see a Barbados [company] in the structure, investigate it,” said an individual who used to run one of Canada’s largest offshore companies and also spent time in prison.

For decades, Canadian companies have flocked to Barbados with their cash in order to legally avoid paying Canadian taxes. If a Canadian company wants to expand its business outside of Canada, it can create a subsidiary in Barbados where it can park its international profits. This way, it legally doesn’t have to pay Canadian taxes on those profits.

… read the rest of the article at CBCnews Canada: Tax avoidance: Canada-Barbados tax deal loopholes revealed

14 Comments

Filed under Barbados, Business & Banking, Canada, Consumer Issues

14 responses to “Canadian Government Broadcaster hires private investigator to expose Barbados tax haven loopholes

  1. Amy L Beam

    To compare Canadian tax law to U.S. tax law is misleading. The IRS makes no incentive for Americans to move offshore. Regardless of where they earn income or own assets, all of it is taxable to the U.S. govt. That’s why there are lots of Canadians, but few Americans living in Barbados. The only advantage for an American is the sun, sea, and sand.

  2. Canby

    The Canadian system is quite clear on what you can and cannot do. I watched the CBC report and found the methods used to be less than appropriate on the part of the person wanting to “hide” their funds.
    Is the system perfect? No, but Barbados and other places are already under scrutiny about this and probably with more legislation to come to make this sort of thing more difficult for a host country, Barbados will see their off shore system affected.
    The following comes from a taxation information website.
    Canadian residents are required to file the following information returns, if they:
    own specified foreign property, the total cost of which exceeds CAD100,000 at any time in the tax year
    -transfer or loan any amount, directly or indirectly, to a non-resident trust or to a controlled foreign affiliate of a non-resident trust
    -receive distributions from, or are indebted to, non-resident trusts in which they are beneficially interested
    -have ownership in a non-resident corporation or trust that is a foreign affiliate or a controlled foreign affiliate .
    Rules for non-resident trusts (currently in draft format) expand the taxation of income earned by these trusts. If an offshore trust has a Canadian resident contributor, or a Canadian beneficiary and a contributor with nexus to Canada, the trust will be deemed to be a resident of Canada and will be subject to tax in Canada on its worldwide income and capital gains. At the same time, all Canadian-resident contributors and beneficiaries will be liable jointly for the tax liability of the trust.

  3. Twis

    The “Canadian Journalism types” want the laws changed so that companies and individuals don’t get to avoid paying taxes, while at the same time benefitting from National programs funded by taxes such as free health care, subsidized University education, etc.

  4. PLANTATION DEEDS FROM 1926-2013 AND SEE MASSIVE FRAUD ,LAND TAX BILLS AND NO DEEDS

    Canadian Government , Welcome to Barbados and to help to open the eyes of the Bajans, English and the Americans has been robbed by the lawyers, with bought titles like Allen Stanford , The Massive PONZI needs more light.You may reach us at moorishcourt@gmail.com for more proof and facts ,Let get to the ROOTS of the massive Fraud, Help the Queen of England to lock them up ,
    Lets start with the BLP and the DLP , PM , AG, MOF all the way down to their new over price cars BMW and RR

  5. Mark

    Actually Canadian laws were being broken in some cases, as they demonstrated pretty clearly. But I agree it’s primarily an internal Canadian issue.

    @ Amy

    I didn’t catch the whole show. But the part I did was primarily related to business tax law, not so much individuals. And the US has equivalent loopholes in that regard, as evidenced by the massive offshore “subsidiaries” operated by Apple (and others) which were recently the subject of congressional and SEC investigations.

  6. Due Diligence

    Here is the October 2 segment

    http://www.cbc.ca/player/News/TV+Shows/The+National/ID/2410200333/?page=4

    Here is the October 7 segment

    http://www.cbc.ca/player/News/TV+Shows/The+National/ID/2410932596/?page=2

    For those readers who are thinking that CBC’s OFFSHORE EXPOSED started as a witch-hunt targeting Barbados, it is important to bear in mind that the hidden camera investigation by CBC News into illegal tax avoidance schemes used by Canadians to hide money offshore was the result of a series of random tests by an undercover businessman/private investigator of lawyers, accountants and other service providers offering offshore-related services started in Toronto.

    As Barbados is the offshore destination of choice by Canadians seeking to avoid paying income tax in Canada, it is not surprising that the investigation led to Barbados, and that it reveals loopholes and shortcomings in Canada’s system of stopping the flow of hidden money to offshore tax havens.

    It is to be hoped that the authorities in Canada and Barbados will use the results of the investigation to crack down on (crack some heads?) and shut down those lawyers, accountants and other service providers offering offshore-related services advocating and promoting illegal means of tax avoidance, starting with Lynn A. Garner, Gilles Gosselin of S G Global Consultants, Allan Madan, and Andrea Mullin Henry, of Crane Chambers.

    The crack down should, of course, not apply to those Canadian multinationals legally using the tax treaty to minimize taxation for the benefit of their Canadian shareholders, who ultimately pay Canadian income taxes on the dividends they receive from the parent company derived from the offshore profits repatriated from the offshore subsidiaries.

  7. Anonymous

    the canadian laws are communist to the core. I say let the Bajans have as many loopholes as possible and let business prosper without government stealing people’s hard earned money. I think tax should be banned altogether.

  8. what should Canadian taxpayers expect?

    As the third largest Foreign Direct Investment country benefitting Barbados
    Indirectly ( as the money merely flows through it), what does Canada do to ensure that this country has all its democratic principles in place?

    1) no ITAL after years of promises
    2) no accountability with government agencies as audits would show them worthless
    3) judicial system paralyzed and not independent
    4) Land title system flawed and corrupted by lawyers who should be in jail
    5) Extreme abuse of the environment and Barbados biodiversity
    6) political process saturated with pork and patronage
    7) Political abuse of human rights through harassment, threats and vicious intimidation.

    At 5 billion dollars a month flowing through Barbados, from Canada one would think that Canada could exercise its political and economic leverage
    with a small amount of the interest lost to Canadians with some ” tough love”

    The average Barbadian is not the beneficiary of this flow of money through Canadian subsidiary banks and Barbados. Barbados in effect has become worse than a colony with some form of governmental checks and balances in place, but rather a “crack whore” of economic opportunism in a day and age of me, myself and I.

    Shame on Canada!

  9. Investigative journalism by CBC?

    After decades of the Canada/Barbados Tax Treaty being in place and its effect on Canadians and Barbadians, this is the best CBC could do?

    Given the fact that CBC is part of an international trusted news source, why would CBC have to go to third rate periphery tax advisors when all the international Canadian Banks and major Canadian law firms are front and centre.

    Was CBC threatened by “libel chill” or having its funds cut off?

    it is well known and documented what goes on, so why did we not have an in depth investigation, discussion through interviews of where the money goes and how it helps Canadians and Barbadians and the greater world markets?

  10. MT Pockets

    Relax. This was just a ‘how-to’ program in the guise of Investigative Journalism. Gave all the instructions and contacts to do it.
    Really it was pretty good advertising for Barbados tourism. the HD pans outdoors and of the airport really looked good (to Cdns watching the show). Also all the wannabe tx evaders will be making Bim their next vacation spot. Way ahead of anything BTA has going.

  11. Mobert

    The piece was a rag piece, worthy of a gossip paper. A real news ahency like the BBC or Times of London would have done a job in a completely different league.

    The CBC should be ashamed to air such a shallow piece of nonsense.

    Further, interestingly in what was aired, those ‘professionals’ spoken to, all directed the ‘potential fraudulent investor’ AWAY form Barbados, stating the we have too many regulations.

    What does THAT say??

  12. iabingy

    mounties always get their man.
    trust me they will get all wunna criminals.

  13. iabingy

    AAAALLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL OF YOUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

  14. iabingy

    START HIDING NOW OR RUN YOU THIEVES??????????