Under the program as it stands, taxpayers may come forward voluntarily to tell CRA about omissions or mistakes made in reporting income tax, excise tax and duties, source deductions, GST/HST. CRA is using some of its close to $1 billion in new funding to crack down on tax cheats and limit the breadth of the VDP.
The following are under review:
- The CRA will narrow the criteria for who is eligible for penalty and interest relief.
- The pre-payment of the estimated taxes and interest owing will become a condition of qualifying for the program.
- How the interest relief available is calculated will be changed.
- Relief will be cancelled if it is later discovered the application is incomplete due to a willful misrepresentation.
- Severe cases of non-compliance will not qualify for full penalty and interest relief at all; neither will voluntary disclosure of the proceeds of crime.
- Transfer pricing applications will not qualify; nor will corporations with gross revenues in excess of $250 million.
The online consultations specifically ask you to weigh in on two questions about fixing mistakes on tax obligations:
The OCAC recommended a list of scenarios in which non-compliant taxpayers should be treated more severely than those who do comply:
- Cases of deliberate or willful default or carelessness amounting to gross negligence
- Active efforts to avoid detection through the use of offshore vehicles or other means
- Large dollar amounts of tax are avoided, and there have been multiple years of non-compliance
- Taxpayer’s disclosure is motivated by CRA statements regarding its intended focus on compliance or by broad-based CRA correspondence or campaigns
Our tax filers are already compliant with our tax system: 92% of Canadians file and pay their taxes on time according to the CRA. The VDP has also been working: over two years, close to 30,000 voluntary disclosures were processed, representing unreported income in excess of $2 billion.
60-days to share your opinion: