A press release was issued last year highlighting a $30 million “investment” by Canada Revenue Agency (CRA) aimed at combatting those that CRA alleges have committed ‘international tax evasion’ and ‘aggressive tax avoidance.’
This does not mean that CRA is only chasing rich people with offshore companies and shady business dealings. They are chasing many average Canadians. As a nation which is home to many immigrants with ties to other countries, these good citizens have (in some cases completely innocently and unaware of all the tax laws) built up savings accounts, bought retirement homes or invested in businesses in their home country or retained an inheritance there.
In the announcement made by the Honourable Gail Shea, Minister of National Revenue and Minister for the Atlantic Canada Opportunities Agency, and the Honourable Maxime Bernier, Minister of State (Small Business and Tourism), it was made clear that this would be a top priority and CRA would have an unprecedented ability to crack-down on those that they believe fall under this category.
Since this announcement, we have seen an increase in clients seeking help after CRA has begun aggressively pursuing them under this new mandate.
Here is how the investment was distributed:
- $15 million was allocated to put systems in place with the banks and financial institutions so that in the event of electronic fund transfers greater than $10,000, CRA will be promptly notified.
- $15 million was allocated to establish new audit and compliance measures.
CRA established a dedicated team of CRA agents and investigators to implement the program with increased powers to audit, investigate, and pursue individuals and businesses that they believe are hiding money offshore.
These include, but are not limited to:
- A new program – the Offshore Tax Informant Program – that allows CRA to pay for intelligence. CRA will now be able to compensate those who are aware of individuals guilty of international tax non-compliance. Ex-spouses and former business associates are snitching.
- Requirement that financial institutions report any electronic fund transfers in excess of $10,000 to CRA.
- Introduce new and additional requirements for taxpayers with foreign income or properties to provide more information.
- Increase the amount of time CRA has to re-assess individuals who failed to properly report income.
If you believe that you may be impacted by this new program it is vital that you get to CRA before they get to you. The Voluntary Disclosure Program can help you avoid aggressive penalties or prosecution as a result of offshore income, assets or investments.
For more information about international tax evasion, or if you have a tax problem and need help – please visit www.taxsolutionscanada.com or call 1-888-868-1400.