Effective January 1, 2015, new measures will be implemented in the crack down on international tax evasion and aggressive tax avoidance. These new measures, which focus on electronic funds transfers, are in addition to previous initiatives including the paid informants program and the strengthened foreign income verification statement (Form T1135).
Under the new measure, certain financial institutions, including bank will be required to remit information to CRA regarding incoming and outgoing electronic fund transfers in excess of $10,000. Based on the information, CRA will be better able to target higher risk taxpayers and more effectively identify taxpayers who “participate in international aggressive tax avoidance and attempt to conceal income and assets offshore.”
The new reporting are the same reports that are already being providing to FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada) but now they will be submitted to both FINRAC and the Canada Revenue Agency. These reports will be submitted within 5 working days of the transaction occurring and will be required from financial institutions (banks, credit unions, etc), money service business and casinos.
These measures have proven to be working given the increase in the number of taxpayers that are entering the Voluntary Disclosure Program (VDP), a program designed for taxpayers, whether big or small, who want to become compliant without the risk of financial tax penalties as well as potential criminal penalties. One of the main requirements of the Voluntary Disclosure Program is that the taxpayer must come forward voluntarily prior to any contact from the CRA regarding unfiled tax returns or any other investigative measures.
Have questions about the new CRA measures or about the VDP program and getting caught up on your tax returns without the risk of penalties? Give me a call at 250-381-2400 or send me an email at firstname.lastname@example.org.