Canadian Tax Evasion Landscape
In the recent years, the Canadian tax evasion landscape has been changing dramatically. With increasing international cooperation and the Canada Revenue Agency’s ambitious plan to prosecute tax evaders, it has been making many Canadians nervous. In addition, Canada has recently joined an international agreement to give those hiding income from offshore investments more reasons to stay awake at night.
Multilateral Competent Authority Agreement (MCAA)
Starting 2018, your offshore tax havens may longer be a secret. This past month, Canada’s Minister of National Revenue signed the international Multilateral Competent Authority Agreement (MCAA), which will allow automatic exchange of financial account information with more than 90 jurisdictions starting in 2018. This will inevitably make it easier for the tax authorities to discover where you are hiding your assets.
Offshore Tax Informant Program
The CRA’s ambitious plan to prosecute tax evaders is also evidenced by their recent Offshore Tax Informant Program (OTIP), which provides significant financial rewards to those who give tips about Canadians avoiding taxes in offshore accounts. This undoubtedly makes some nervous as it could be anyone including an ex-partner, a disgruntled employee, or a bitter business partner.
CRA Voluntary Disclosure Program
Canadians still have a chance to come forward, but the time to do so is running out. If you are hiding offshore income, you should strongly consider the voluntary disclosure program before it is too late.
The CRA’s voluntary disclosure program allows Canadians who are avoiding taxes in offshore accounts to come forward voluntarily, and in return, the CRA will reduce accrued interests and waive penalties and potential criminal prosecution for tax evasion. This is a significant incentive as the penalties could amount to more than the amount invested in the offshore account. A voluntary disclosure application will only be accepted if CRA has not already taken compliance action.
With Canada joining the international MCAA, and allowing 90 jurisdictions to share financial account information, the time for filing a voluntary disclosure application may be running out.
Contact our tax litigation lawyers to begin your voluntary disclosure program today.
This article is for informational purposes only and does not constitute legal advice. If you wish to discuss your issue with a lawyer, contact today. +1 (613) 706-1757