A young French auditor who blew the whistle on secret tax deals between Luxembourg and Apple, Starbucks, and several powerful Canadian multinationals has been given a hefty fine and a suspended sentence by a Luxembourg court for his troubles.
"Canadian taxpayers and taxpayers across the globe deserve to know to what extent multinationals are avoiding taxation,” Antoine Deltour told Canadians for Tax Fairness earlier this year. The junior accountant admitted he copied unencrypted tax files from PriceWaterhouseCooper (PwC)in 2010. The information contained in those files became known as LuxLeaks. They blew the lid off the tax dodging practices of the world’s most powerful multinationals. And although governments, including Canada’s, now acknowledge the breadth of the problem, tax dodging continues to flourish.
Six years after copying those files, the only people to be charged were Deltour, a second auditor, and the French journalist who initially reported on the story. The journalist was acquitted.
And even though the documents showed a global trail of corporate secrecy, not one multinational faces charges in any country.
“It is maddening that the only person paying the price at this time is the whistleblower – that has to change,” says Dennis Howlett, executive director of Canadians for Tax Fairness. “Lack of transparency and secrecy plagues our tax system here in Canada and globally. Until our political leaders act, we have to count on whistleblowers and those who leak data because they know something is wrong."
Scott Chamberlain agrees. As legal counsel for the Association of Canadian Financial Officers, he helped file complaints with the Chartered Professional Accountants Association, about another mega-accounting firm. KPMG concocted an offshore tax scheme that the government submits was a sham meant to deceive. None of that information would have been made public if there hadn’t been an information leak to a CBC investigative journalist.
“This punishes those who sought to do the right thing for the public good,” says Chamberlain, who also sits on the C4TF board of directors. “I worry that it will deter others from doing the same.”
He is also concerned about the message it sends to corporate cheaters. “Those who would cheat their nations of the tax revenue necessary to provide quality public services are protected", he says. "It is a green light to repeat the behaviour.”
Ultimately, tax fairness activists say the case shows, once again, that the bar on what constitutes avoidance and evasion must be clearer and raised much higher.
“It is imperative that our political leaders show courage,” says Chamberlain. “They need to rewrite laws to encourage whistleblowers. And they need to be clear that gaming the tax system is both immoral and illegal.”
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