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The Kitco Raid and even Why It Is Not Safe to Store Gold canada

I know that my articles have many readers inside North America instructions both from typically the USA and through Canada. Personal Accountant Edmonton provides a very respectable image internationally (the Canadian government almost never stirs up problems outside its borders), and the Canadian banking system will be admittedly much more stable compared to the PEOPLE. Even the foreign currency has been carrying out well, backed inside part by Canada’s huge wealth associated with gold and some other natural resources.

An individual might think, after that, that Canada would certainly be the perfect asset protection dreamland. In fact, many of us frequently receive enquiries from US Us citizens asking how in order to open checking accounts in Canada, or thinking that the Canadian buck is a risk-free haven against break of the PEOPLE dollar. But folks who think Canada is a great investment alternative in order to US instability and systemic insecurity are usually seriously mistaken. The raid on Kitco last week amply demonstrated this, if that wasn’t already obvious.

Considering the amount of money Canada makes from important metals and exploration companies, you would certainly think they might respect the precious metal business. Indeed, it’s no coincidence that one of the world’s largest rare metal trading and study firms is Canadian – and that was this company, Kitco, that was raided by authorities inside Quebec last week. Practically every precious alloys site out there links towards the renowned Kitco charts.

A new friend of acquire who has a new gold investing blog recently warned about how the US Government was looking to “regulate” silver trading companies. Regulate, he says, “is a code-word for, take-over, destroy or perhaps monopolize. “

He previously been warning against this trend in typically the US, but they probably wasn’t astonished that Canada got the lead. More than 175 Revenu Quebec, canada , agents conducted raids related to Kitco on homes, workplaces, accountancy firms plus bankruptcy trustees inside the Montreal area. In other phrases, Kitco was raided big-time by typically the equivalent of the IRS, and a court-appointed receiver is today controlling the company.

Kitco has not been formally recharged with anything. As my friend Jeff observed, “Kitco has recently been a highly well known and reputable precious metals dealer for decades in Canada and that is highly, extremely unlikely that these people have done anything improper. inch

Typically the allegations, as I realize them, apparently middle on supposed sales tax evasion. Because scrap gold is controlled by tax but of these isn’t, allegedly Kitco was buying discard gold, paying typically the florida sales tax to the particular sellers (local gem firms or small gold dealers) well then legitimately reclaiming the sales tax paid. Since Kitco had been selling bullion, we were holding not obliged to be able to charge sales tax. Therefore they might have been getting large tax refunds on a regular basis – something governments obviously hate!

All this is definitely quite legal in addition to normal, but it’s possible that the sellers of the particular scrap gold simply disappeared, as opposed to giving over the florida sales tax to the federal government because they were supposed to be able to. Therefore on typically the one hand typically the government are not getting the tax, however they were paying out it to Kitco. In Europe this kind of is called “missing trader fraud” or even “carousel fraud” and even also reached epidemic levels a few of years ago on easily tradeable high value products like microchips, until governments needed to bring in special regulations in this regard (as a side take note, readers might remember how a closure of the Netherlands-Antilles based bank First Curacao International Bank in 2006 and typically the arrest of billionaire banker and oil trader John Duess was also apparently down to this kind of fraud. )

I would point out it is really unlikely that Kitco were deliberately involved in this, yet they probably manufactured the mistake of expecting the Canadian government to play by the key facts. Once Kitco features paid the taxation and received a valid invoice, it’s most certainly not Kitco’s responsibility to be sure the third party actually pays typically the taxes due. Kitco didn’t design typically the system. Unfortunately, Revenu Quebec doesn’t appear to see it in this way.

Basically, the particular raid is concerning teaching people the lesson. Those included in the precious metal business are not necessarily popular with governments. Those receiving duty rebates are not popular either. In addition to the Canadian taxman has learned through the US regarding high profile, marketing seeking cases in which you accuse first of all, destroy somebody’s enterprise, then later glance at the facts.

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