More UBS Canadian clients disclose unpaid taxes
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Published: Thursday, September 24, 2009. Reuters
TORONTO — More than 50 Canadian clients of Swiss bank UBS have come forward to disclose unpaid taxes, and investigations so far have found $7-million in unreported income, Canada’s tax authority said Thursday.
The voluntary disclosures follow a high-profile investigation of UBS by U.S. authorities, who accused the bank of using Switzerland’s banking secrecy laws to help wealthy clients avoid paying taxes.
“Twenty of the voluntary disclosures that we’ve received have now been finalized … and the completed cases – those 20 – involve about $7-million in unreported income. And we do expect to receive more in the future,” Revenue Canada spokeswoman Caitlin Workman told Reuters.
Last Thursday Revenue Minister Jean-Pierre Blackburn announced 36 Canadian clients of UBS AG had contacted the country’s revenue agency to voluntarily disclose income they previously failed to report.
Revenue Canada, keen to clamp down on tax evasion by offshore account holders, has met with UBS lawyers to try to compel the bank to reveal its Canadian account holders who may have failed to report income.
UBS agreed in August to disclose the names of 4,450 U.S. holders of secret accounts at UBS, but no such deal has been reached with Canadian tax authorities, who may instead be hoping the publicity of the U.S. case will compel Canadian UBS clients to come forward with their offshore details.
Revenue Canada’s Ms. Workman said about 56 voluntary disclosures have been made in total, with 20 completed and dozens more still undergoing review. The agency is also seeing an upswing in voluntary disclosures about offshore accounts from clients of other banks – suggesting the U.S. clampdown is reverberating into Canada.
“Maybe it’s the media splash, maybe it’s seeing what happened in the States – I wouldn’t want to speculate on reasons – but other people that are using offshore tax havens are also thinking, ‘Oh it’s probably a good time to come forward in order to avoid having to pay the penalties and interest down the road’,” Ms. Workman said.
While U.S. tax authorities set up an amnesty program to allow Americans to reveal income in tax havens and generally avoiding prosecution, Canada has not. Instead, Ms. Workman said, Canadians have 10 years to report undeclared income and pay the taxes, plus interest, to avoid prosecution.
“If you come to us before we come to you, it means you won’t be prosecuted – there are serious advantages,” she said.
Tax officials and lawyers have said the response to the U.S. voluntary disclosure program have been unprecedented. More than 3,000 taxpayers have come forward, compared with fewer than 100 for all of the last year.
Ms. Workman said there have been no meetings with UBS since a telephone conversation held with the bank’s lawyers on Sept. 2, and none are scheduled.
“However we hope discussions are going to continue, and we are encouraged at this point that UBS is open to such discussions,” she said.
© Thomson Reuters 2009 < http://www.financialpost.com/news-sectors/story.html?id=2028764 >.