Tax Evasion

“Stop facilitating tax evasion or face criminal prosecution, HMRC tells corporations”

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Source: HMRC Press Release 30 September 2017

From 30 September 2017, the Criminal Finances Act 2017 introduces two new criminal offences – one applying to the evasion of UK taxes and one applying to the evasion of foreign taxes.

The offences hold corporations and partnerships criminally liable when they fail to prevent their employees, agents, or others who provide services on their behalf, from criminally facilitating tax evasion. This is a significant change from existing law under which they can only be found liable for criminally facilitating tax evasion if the most senior members of the organisation – typically the board of directors – are aware of the facilitation.

HMRC Press Release here

 

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“KPMG rocked by South African corruption scandal”

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Source: accountancyage.com, 27 September 2017

“KPMG’s South African branch has come under fire and suffered a severe reputational hit after becoming caught up in a growing corruption scandal surrounding one of the country’s most powerful families, the Guptas.”

“KPMG is accused of facilitating the family in tax evasion and corruption. The firm denies any wrongdoing but admits to missing several “red flags” in relation to the family’s accounts. At least eight senior KPMG South Africa officials have resigned in the wake of the scandal, including CEO Trevor Hoole.”

“KPMG conceded that audits of Gupta companies: “fell well short of the quality expected, and that the audit teams failed to apply sufficient professional scepticism and to comply fully with auditing standards”.”

“As a result of the scandal KPMG have lost several audit contracts in South Africa, with even more companies considering severing ties. The firm is under investigation by South African regulatory body IRBA and risks being removed from the country’s auditors’ register.”

Source article here

 

Swiss spies suspected in tax espionage

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Source: Tax Justice Network, “The Offshore Wrapper” 28 August 2017

“A man suspected of being a Swiss spy has been indicted in Germany. He is suspected of having been employed by the Swiss intelligence services to spy on German tax officials in an attempt to discover who was involved in a 2010 leak of information from a Swiss Bank. German officials bought CDs containing the data in 2012, and shared it with officials across the European Union. In total the data helped recover €7bn in tax revenue.

The case is one of the stranger cases of state capture by the banking industry we have seen in recent years, and shows that despite claims that it is embracing transparency, the Swiss Government are still willing to go to extreme lengths to protect their banks being used as hubs for dirty money.

However, spies working for the Swiss government may think twice in the future about undertaking such missions, if stories circulating about the arrest of this suspect are to be believed. According to some reports Swiss prosecutors may have blown the cover of their spy by failing to redact passages of documents related to the prosecution of a Swiss banker for leaking the information.”

Canada Revenue Authority will not seek leave to appeal BP Canada decision

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Source: Thorsteinssons LLP via International Law Office, 30 June 2017

“In BP Canada Energy Company v Minister of National Revenue (2017 FCA 61), the Federal Court of Appeal imposed important restrictions on the use of Section 231.1(1) audit powers by the Canada Revenue Agency (CRA). Read the rest of this entry »

UK Corporate Criminal Offence: Failure To Prevent Facilitation Of Tax Evasion

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Source: Akin Gump Strauss Hauer & Feld LLP via mondaq 15 May 2017

“The Criminal Finance Act 2017 received Royal Assent on April 27, 2017, making its way onto the statute book before the halting of Parliamentary business ahead of this year’s general election. As well as giving enforcement agencies further powers to recover the proceeds of crime and tackle money laundering, the Act introduces two new criminal offences for businesses that fail to prevent the facilitation of tax evasion.

Businesses should now be reviewing their internal risk assessment processes to ensure that adequate prevention procedures are in place ahead of the implementation date for the new law, which is expected to be September 2017.

The first of the new offences relates to the evasion of UK tax (the “Domestic Offence“), whereas the second relates to the evasion of foreign tax (the “Foreign Offence“).

In each case, liability for the relevant business will be strict unless the business can prove that it had in place reasonable measures to prevent the facilitation of the tax evasion (or that it was unreasonable in all of the circumstances to expect it to do so).

The new offences are cast widely and will apply to all businesses, including funds, portfolio companies, fund managers, special purpose vehicles and others in the financial services sector, which is a particular target and likely to be most affected.”

Source article here