While many still deal with the repercussions of the Panama Papers scandal, it is no surprise that offshore tax evasion continues to make reoccurring appearances in the media. If you are involved in any form of offshore tax shelter, often considered tax evasion by the Canada Revenue Agency, you may be concerned about your own level of risk.
We came across this Toronto Star article recently and thought it relevant to share. While the Canada Revenue Agency remains vigilant in its attempts to combat offshore tax evasion, the methods and results seem to fall short when compared to several other countries.
According to the article, “the Canadian government has convicted only 49 people and levied just $13.4 million in fines for what it calls offshore activity since 2010.” That is a surprisingly small number, especially given the introduction of the Offshore Tax Informant Leads Program – a program designed to encourage those with knowledge of offshore holdings to come forward to the CRA in exchange for a cash reward.
The reason? The Star argues a lack of resources – some 300 tax auditors were laid off after the Conservative government imposed a two-year budget freeze in 2014.
What does that mean for you? Some tend to assume that, if you are currently using an offshore tax shelter, for whatever reason, your own level of risk is quite low and therefore you have little cause for concern. Our experience, though, leads us to conclude that the CRA will eventually get around to it, and so the longer it is left, the bigger the end problem becomes. The risk also increases if any outside parties are privy to the information and could potentially use it for their own personal gain.
You can check out the article in full here: https://www.thestar.com/news/world/2016/08/01/cra-convicts-a-fraction-of-offshore-tax-evaders-exclusive.html.
A great way to deal with tax evasion is to deal with the unpaid taxes before the CRA finds out and it becomes an issue. The Voluntary Disclosure Program is the way to that. This program allows you to amend the incorrect or unreported tax filings and can save you from penalties.
Worried about an offshore tax evasion charge? Get your taxes in order and protect yourself and your assets by calling Tax Solutions Canada today: 1-888-868-1400.