Voluntary Disclosure & CRA Annual Report to Parliament
– General Information
CRA has provided the
latest statistics about the tax amnesty or voluntary disclosure
program (VDP) for the previous fiscal year. CRA provides an annual
report to parliament that provides a wealth of information about
its activities over the past year. The 2014-2015 CRA Annual Report
to Parliament was released in late January 2016 and is tabled in
Parliament annually by the Minister of National Revenue, under the
legal requirements of the Canada Revenue Agency Act. The report
contains comprehensive information on the performance of the CRA.
It is clear from this report that the Canadian voluntary disclosure
program is being utilized more by Toronto tax lawyers and Canadian
Voluntary Disclosure – Toronto Tax Lawyer General
The Voluntary Disclosures Program (VDP) or tax amnesty program
gives Canadian individual taxpayers and corporations with an
opportunity to correct inaccurate or incomplete information, or to
disclose information not previously reported without the risk of
prosecution and with no penalties and a possible reduction in
interest. Included are Canadian taxpayers who have not have met
their income tax obligations because they had unreported income
including offshore or internet based income such as Uber, ebay
sales or airbnb rentals, or they claimed expenses they were not
entitled to, failed to collect or remit payroll source deductions
or GST/HST, or did not file an information return such as a T1135
or T1134 for offshore assets. Canadian taxpayers who make a valid
income tax voluntary disclosure will have to pay the taxes or
charges owing plus interest, but are not subject to civil penalties
Voluntary Disclosure – Statistics for 2014-2015
CRA reports that the total unreported income from all voluntary
disclosures was over $1.3 billion. This represents an increase of
65% over the amount reported in the 2013‐2014 fiscal year
annual report to parliament. The growing importance of offshore tax
enforcement efforts is evidenced by the amount of unreported income
from offshore voluntary disclosures of $780 million, an increase of
157% from 2013‐2014. The number of disclosures and the amount
of undeclared disclosures, in part due to continued international
efforts to share tax data, made up most of the increase.
Finally, the tax department states that there were 19,134
voluntary disclosures received in fiscal year 2014‐2015, an
increase of 21% over the prior year.
Voluntary Disclosure – Timing for Disclosure
In order to qualify for a Canadian voluntary disclosure the
Canadian taxpayer must approach CRA and initiate the voluntary
disclosure, either as a no-names voluntary disclosure or with
identify fully disclosed, before any contact from CRA. If CRA has
initiated an audit or investigation, or even sent an enquiry
letter, it will generally be too late to qualify for the VDP tax
amnesty with respect to the subject matter of the enquiry. If you
have undisclosed income tax issues contact one of our Toronto
income tax lawyers for a consultation before CRA contacts you.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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