A few weeks ago, we spoke about an announcement made regarding suggested changes to the Voluntary Disclosure Program – a valuable program offered by the government which grants relief of penalties and interest on a tax debt to those who qualify. These suggestions come after harsh criticism that the Canada Revenue Agency has become far too lenient with regard to prosecuting tax cheats – those hiding/keeping income in offshore accounts, then failing to disclose it on their tax filings.
According to the Globe and Mail, “The federal tax-collection agency is testing a new strategy to crack down on tax-evasion schemes, reviewing every single electronic funds transfer (EFT) of more than $10,000 that goes from Canada to four foreign jurisdictions in a given year. The first two targets were the Isle of Man and the island of Guernsey, which are low-tax jurisdictions located respectively west and south of Britain. The review is near completion in these two cases, and two more reviews of undisclosed jurisdictions are under way, to be completed by the end of March, 2017.”
As a result of this new strategy, the CRA has reviewed over 20,000 transfers of more than $10,000, worth a total of about $7-billion, identifying and beginning audits on 166 high-risk taxpayers. This is set to continue, and for 2017-18 the CRA plans to review about 100,000 EFTs in four new jurisdictions, the identity of which have not been disclosed.
You can read more on this here: http://www.theglobeandmail.com/news/politics/cra-launches-new-strategy-to-crack-down-on-tax-havens/article33065307/.
The Voluntary Disclosure Program has been a sort of haven for these individuals for some time, giving them a chance to come clean and report on this income in the hopes of receiving relief from penalties and interest. However, new regulations will see the program being far more discriminatory in its granting of relief, and the CRA has noted that those with more nefarious dealings can expect to be rejected.
If you are currently relying on an offshore holding and sitting with the assumption that the CRA is unlikely to discover it, you may want to reconsider. With these new regulations and the influx of cash the CRA received to help combat such schemes, you may well be on the list – or soon find yourself there.
The Voluntary Disclosure Program is still your best hope for assistance. The best thing that you can do is get an application in as soon as possible, before your actions catch up with you. Our best advice is to get in touch with us today. The process is a formal one, and you only have one chance to get it right.
At Tax Solutions Canada, we can help you navigate the Voluntary Disclosure Program process, giving you the best chance for success. Call us today at 1-888-868-1400.