Royal Bank of Canada has been actively involved in helping wealthy international clients avoid tax, according to a recent report commissioned by Members of the European Parliament. RBC ranked 20th in the survey which used public information from three data leaks - the best known being the “Panama Papers.”
The report titled Usual Suspects: Co-conspirators in the Business of Tax Dodging shows that the Royal Bank of Canada requested the creation of 1199 offshore companies in tax havens including Bahamas, Switzerland, Hong Kong, Jersey, Guernsey, and the Isle of Man. It also shows RBC - under a different logo - was associated with the creation of 90 more offshore companies in those same low or no-tax jurisdictions.
Eight of the top 20 international intermediaries are banks including the Royal Bank of Canada and Swiss banks Credit Suisse and UBS. All four accounting giants including KPMG are named in the report. Green Party and Independent Members of the European Parliament have used the public data from the International Consortium of Investigative Journalists to investigate the breadth of the problem. The report is meant to help Members of the European Parliament push for increased legislation and regulation. "Europeans have seen that self-reporting and self-regulation in the tax avoidance industry doesn't work," says Dennis Howlett, executive director of Canadians for Tax Fairness. He previously appeared before Canada's Finance Committee to make the same case about the situation here.
"Individuals and corporations would not be able to use tax havens to hide their wealth without the encouragement and assistance of facilitators. These facilitators include banks, financial institutions, wealth management firms, law and accounting firms. Canada needs additional legislated controls to regulate these 'fixers' who make big money helping wealthy tax avoiders."
The European report recommends that countries adopt legislation to ensure proper and independent supervising authorities for intermediaries. "Self-supervision, often the case for law firms or accounting companies have proven their limits," the report says. It also recommends governments apply stronger sanctions against intermediaries providing assistance to any individual or entity involved in money laundering, tax evasion or aggressive tax planning.