Federal Court orders 2 Canadian banks to release Cayman bank info to CRA

Offshore tax cheating is one issue that the Trudeau government seems to have won. Two Canadian banks have been ordered to release to the federal revenue minister information on a Cayman bank in order to crack down on Canadian tax evaders.

The Royal Bank of Canada and Citibank, N.A. were summoned by the Federal Court of Canada to release seven years’ worth of transactions with Cayman National Bank, Ltd. The institutions, which did not refuse to obey the order, were given 120 days to hand in information including deposits, checks, wire transfers, bank drafts, and account statements from Jan. 1, 2009 to Dec. 31, 2015. 

The measure is to verify evidence of Canadian citizens transferring their Canadian dollar accounts to Cayman National Bank to avoid reporting taxable income derived from their foreign holdings. Spokesman David Walters has said that this is done with the purpose of fighting offshore tax evasion. “The CRA is committed to combating the abusive use of offshore jurisdictions and protecting the integrity of the Canadian tax system," he said.

According to David Letkeman, an agency´s auditor, the reason they became suspicious about the illicit movement of funds was thanks to a Canadian woman who voluntarily disclosed all her dealings through a special program that allows those who turn themselves in to avoid prosecution. She was ordered to pay a total of $1.2 million plus interest for all the unreported gains.

The agency probably had some information from the two banks thanks to a federal order that, in 2015, introduced mandatory reporting of all transactions of $10,000 or more. However, the agency reveals that some citizens, in order to avoid paying taxes from assets, have given themselves periodic allowances of less than $10,000 dollars to conceal the transactions.

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