Since January 2015, Canadian financial institutions have been obligated to report all international fund transfers over C$10,000 to the CRA.
Starting this month, the CRA will contact about 350 taxpayers and 400 businesses whose transactions involve the Isle of Man, reports Reuters.
An investigation by cbcnews.com in March found that the CRA had offered amnesty to wealthy clients who had used what was described as an offshore tax “sham” on the Isle of Man.
The confidential amnesty allowed high net worth clients of accountancy firm KPMG to avoid future civil or criminal prosecutions, as well as penalties or fines, by paying back taxes and modest interest.
This comes as offshore jurisdications, including the Isle of Man, are coming under increased scrutiny over their role as international financial centres.
Additional investment
Canada’s minister of national revenue, Diane Lebouthillier, announced on Monday that an additional C$444m will be invested in CRA over five years in a concerted effort to clamp down on tax avoidance and evasion.
“The unprecedented investment made in the CRA’s activities through Budget 2016 will fundamentally change our ability to identify and pursue both domestic and offshore tax evasion and avoidance,” she said.
The additional funding was announced in last month’s budget, prior to the leak of the ‘Panama Papers’.
The CRA expects to recoup more than C$2.6bn in taxes.
Further audits
Quebec Liberal MP François-Philippe Champagne said the Isle of Man was the first targeted jurisdiction because of the significant value of funds transferred there in the last 12 months, according to cbcnews.
Three further jurisdictions have been identified as ‘of concern’ but Lebouthillier declined to say which ones.
Special programme
In order to combat tax evasion and tax avoidance, the CRA will also create a special programme dedicated to stopping the organisations that create and promote tax schemes.
This is expected to result in a 12-fold increase in the number of tax schemes examined by the CRA. This team will apply penalties and refer cases for criminal investigation, where appropriate.
