A Quebec billionaire is being sued for nearly two million dollars by Revenu Quebec for having deducted from his taxes the use of a private jet and a sumptuous party organized at his Westmount residence.
Little known to the general public, Sylvan Adams was talked about last year, when he was co-owner of the team that allowed Hugo Houle to win a stage in the Tour de France.
The Quebec tax authorities accuse him in particular of having passed off as business expenses personal expenses related to the use of a private jet.
A jet financed thanks to a $40 million interest-free loan from the businessman to a company.
Photo Adobe Stock
An image of a Dassault Falcon 900EX jet similar to the one used by Adams.
Revenu Québec points out that it cannot deduct certain trips by passing them off as business expenses, since it was used instead for personal reasons, for trips or for its cycling activities.
Big party
The latter disputes the tax assessment notices. The case ended up in court recently. According to the procedure, Revenu Québec talks about expenses for a large party organized at the Adams residence in 2013, which were wrongly deducted.
Among other things, there is an invoice for $43,916 in catering costs for a 200-person event that took place on May 25, 2013. During this event, tents were set up in the courtyard of his Summit Circle residence, in Westmount.
Some of these tents were even installed on the swimming pool.
According to the description, the white tents were set up on an antique brown floor above the pool with beams and scaffolding. The bill reached $6,000 for three days.
This isn’t the first time Sylvan Adams has had a run-in with the taxman. After a legal battle that lasted until 2019, his companies had to pay more than $100 million.
Additionally, Sylvan Adams reportedly failed to report significant benefits received from his companies in 2012 and 2013, totaling $743,000.
Misrepresentation
The plaintiff “has made a false representation of the facts by negligence or by voluntary omission”, estimates Revenue Quebec.
In his application, the businessman claims that he took part in thefts identified by the tax authorities as being carried out for personal purposes “in the context of commercial activities”. He also believes that contributions were issued out of time.
►Counsel for Mr. Adams have requested a stay of two proceedings, on the grounds that Revenue Canada “mirror” assessments are also the subject of dispute. At the end of 2022, Judge Stéphane Davignon, of the Court of Quebec, granted this request until November 2023.
WHO IS SYLVAN ADAMS?
- Former president of the Quebec giant Développements Iberville
- Iberville has developed the Galeries de la Capitale in Quebec and the Carrefour de l’Estrie in Sherbrooke
- Now residing in Tel-Aviv, Israel, Adams is a native of Quebec
- Quoted in 2021 in Forbes as a billionaire
- Co-owner of Israel-Premier Tech, the team with which Hugo Houle won a Tour de France stage last summer
A $100 million tax bill
Groupe Iberville, which belonged to Sylvan Adams until 2015, found itself at the heart of a major dispute with Revenu Québec. He was eventually forced to pay a tax bill of over $100 million.
The dispute dates back to the sale of shopping centers such as the Galeries de la Capitale, the Carrefour de l’Estrie, the Grande-Place des Bois-Francs and land in Dix/30 in the 2000s.
Iberville had implemented a tax strategy called Q-YES, for “Quebec Year-End Shuffle” in English, to avoid paying tax in Quebec on capital gains totaling $728 million.
This strategy exploited a loophole in the law. Due to the fact that it was possible for companies to declare different year-end dates at the federal and Quebec levels, companies in Iberville ended up in fact only paying tax in Ottawa.
In 2016, Judge Daniel Bourgeois of the Court of Quebec agreed with Revenu Québec all along the line.
“There is no doubt, according to the Court, that there was abusive tax avoidance,” ruled the judge in his decision.
Maximum savings
It was Serge Bilodeau, from KPMG, who developed the tax strategy.
“The purpose of the mandate granted to KPMG and its legal advisers was that all these transactions be carried out with the maximum possible savings,” he explained.
The Court of Appeal dismissed an appeal filed by Iberville, and the Supreme Court declined to hear the case in 2019.