Last year, Canadian corporations held $71 billion in assets in Barbados. They had another $36 billion in the Cayman Islands.Is Canada’s business elite anticipating a massive boom in beachfront hotels and little paper umbrellas for mixed drinks?
Not likely. More likely, they’re sheltering income earned in Canada from taxes at home. According to a recent estimate from Canadians for Tax Fairness (CTF), the amount of money Canadian corporations held in the world's top 10 tax havens jumped to $199 billion in 2014, from $187 billion a year earlier.
Most of that money “is there to avoid paying taxes back home in Canada,” says Dennis Howlett, CTF’s executive director.
“Walk down a street in Cayman Islands and you will see very little evidence of $36 billion in Canadian investment. But what you will see are small buildings with hundreds of mail boxes that are head office to more than 18,000 shell companies – most of them subsidiaries of corporations trying to avoid tax. The same scenario plays itself out in Luxembourg and other tax havens."
Luxembourg is one tax haven Canadian companies are bailing on; $5 billion in Canadian cash pulled out last year. The CTF thinks that may be partly because of last year's widely publicized leak of secret accounts held in the country.
Some of that money may be flowing instead to Switzerland, which has seen a tripling of Canadian corporate assets just since 2011, to $11 billion.
“More than half of the money is channeled abroad by Canadian banks and financial institutions who play a key role in facilitating tax avoidance,” the CTF says.
Original Article
Source: huffingtonpost.ca/
Author: Daniel Tencer
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