Jacques Villeneuve’s multimillion-dollar tax evasions are revealed in leaked documents.
In 2010, the former auto racing champion reported only $6,431 in income and claimed the low-income tax credit.
Jacques Villeneuve’s money was rushing around the world as he zipped around race tracks.
Prize money from winning the Indianapolis 500 and the IndyCar championship in the mid-1990s, a Formula 1 contract with the Williams team from 1996 to 1998, and a hefty $100 million deal to drive for British American Racing for the next five years.
When image rights, a fashionable Montreal restaurant, and a number of expensive Quebec residences are included in, the totals can become dizzying.
Nonetheless, he filed only $6,431 in personal income in 2010 while residing in Quebec – and claimed a tax benefit for low-income families. He recorded income of $3,224 and $5,782 in the following two years.
It turns out that a sizable portion of Villeneuve’s wealth was stashed in offshore havens, mostly to employ tax evasion methods. Villeneuve also spent the majority of his life outside of Canada and thus did not owe taxes during that time.
He was, however, a Quebec resident from 1993 to 1996 and again from 2007 to 2013, and tax authorities have now accused him of failing to register all of his income and assets — including a Swiss bank account — to the government.
According to tax experts contacted by Radio-Canada, the tax avoidance methods he employed, such as moving his image rights offshore, show to significant flaws in the way the legislation is constructed.
Villeneuve’s tax haven dealings were revealed in the Pandora Papers, a massive leak of 11.9 million secret papers from a variety of offshore jurisdictions. The records were leaked to the International Consortium of Investigative Journalists in Washington, which shared them with its partner news organizations worldwide, including CBC/Radio-Canada and the Toronto Star.
According to archives, Villeneuve’s first offshore firm dates all the way back to his early career. In 1992, he was racing in Japan. However, he returned to his birth province of Quebec for a Formula Atlantic race in Trois-Rivières that summer, where he finished third. One month later, in the Bahamas, a corporation called Goldstar Holdings Corp. was formed to hold the driver’s race earnings and sponsorship money.
Villeneuve and his manager, Craig Pollock, were negotiating with Imperial Tobacco to return to Quebec and compete in the Formula Atlantic series on a full-time basis at the time. Having a corporation in the Caribbean may have enabled the racer to avoid paying income tax in Canada on revenues earned by his company in the Bahamas, which has a 0% corporate tax rate.
While such tax strategies are not intrinsically criminal, they nevertheless deprive the government of billions of dollars in income each year that could be used to fund schools, health care, and social programs.
Shareholders who remain anonymous
Then, in January 1994, while still a resident of Canada, Villeneuve and his manager Pollock established a trust in the British Virgin Islands, another tax-free haven.
According to a document leaked as part of the Pandora Papers leak, the trust was founded “to preserve, manage, and protect the family assets of Mr. John Craig Pollock and Mr. Jacques Villeneuve.”
The trust acquired a controlling interest in Goldstar Holdings, Villeneuve’s Bahamas company. However, no paper trace existed. Goldstar’s shares were converted to so-called bearer shares, in which the holder of the physical stock certificates becomes the owner of the company’s equity. The owners’ names are not recorded in any registration, ensuring perfect anonymity.