If you haven’t filed your Canadian income taxes, for last year or previous year, you have few options. If you know for sure that you don’t owe any taxes and you may be getting a refund it might be as simple as filing the tax return and claiming the refund. However, if you think that you might actually owe tax on any of the late tax returns and may incur penalties, the only real way to avoid penalties would be to file under the Voluntary Disclosure Program.
CRA administers a Voluntary Disclosure Program that allows Canadian taxpayers to catch up with their late Canadian tax return. And if they meet certain criteria, they’ll be eligible for penalty abatement. So what is that criteria? In order to be eligible for the Voluntary Disclosure Program, you need to meet 4 general criteria:
First, the disclosure must be voluntary, which means that you can’t have had CRA ask for tax return yet or being under current audit. Second, a penalty has to apply to the late tax return(s). If there’s no penalty, then you won’t be eligible for the voluntary disclosure, but then again you won’t need it. Thirdly, for the information within the voluntary disclosure there has to be at least 1 year that’s overdue. So if 2011, 12, 13, and 14 are late, but you need to file 2015 as well, you can throw in 2015 as long as one of the years is late. And the last criteria is that the information needs to be complete. So when you file a voluntary disclosure, you need to make sure that all the tax returns are correct, all the disclosures are included because you’ll only get one chance at this.
If you need help in filing your voluntary disclosure, please give me a call at 250-381-2400 or you can email me at email@example.com