OTTAWA: It’s the first co-ordinated assault on the trillions of dollars in corporate profits stashed in tax havens. And if it works, it could mean billions in additional tax revenues for the Canadian government. At a mass-signing ceremony in Paris on Wednesday, Canada joined 67 countries in formally adopting new international rules that aim to prevent the kinds of corporate tax dodging detailed in the Panama Papers. The deal “delivers solutions for governments to close the gaps in existing international rules that allow corporate profits to ‘disappear’ or be artificially shifted to low or no tax environments,” wrote the Organization for Economic Co-operation and Development (OECD) in a press release announcing the deal. But experts question whether the deal will effectively prevent corporations from moving their money into tax havens, many of which are not part of the agreement.
Over the last 14 months, the Star has revealed a number of techniques used to game Canada’s tax regime through dozens of exclusive reports drawn from the Panama Papers leak of tax haven documents. Many of the schemes take advantage of Canada’s world-leading number of 93 tax treaties and 22 tax information exchange agreements (TIEAs), which allow corporations to claim profits in tax havens — where there is little or no tax — then move the money into Canada tax free.
