The federal government has unveiled new disclosure requirements for taxpayers with over $100,000 in foreign property, as it aims to crack down on international tax evasion.
The 2013 federal budget proposed a variety of measures to combat international tax evasion. Among them, it’s increasing the amount of information it demands from Canadians who hold foreign property costing over $100,000. Starting with the 2013 tax year, they will be required to provide additional information to the Canada Revenue Agency (CRA).
The criteria for those who must file this sort of information has not changed; however, the new form has been revised to require more detailed information on foreign property, including the name of the specific foreign institution or other entity holding funds outside Canada; the specific country to which the foreign property relates; and, the income generated from the foreign property.
The government says that, “the CRA will use the additional information to ensure all taxpayers comply with Canadian tax laws, through activities including education and audit.”
“Our government is committed to combating tax evasion and getting tough on tax cheats. We have introduced important new measures to strengthen the Canada Revenue Agency’s ability to audit and investigate taxpayers who may be hiding offshore property,” said Gail Shea, minister of national revenue, in announcing the new forms. “Stronger reporting requirements will provide the CRA with more information to crack down on those who attempt to cheat the system.”
The budget also proposes to extend the reassessment period for a tax year by three years if a taxpayer has failed to report income from a foreign property on their tax return and if the foreign income statement was not filed, was late, or included incorrect or incomplete information concerning a foreign property.
In addition to unveiling the new form, Shea also met with members of the Certified General Accountants Association of Canada (CGA-Canada) to discuss taxation issues, including how best to combat international tax evasion and aggressive tax avoidance.
“We are pleased to see the government taking action on this important issue. Increased reporting requirements of large offshore assets will help to ensure that all Canadians are operating on a level playing field when it comes to their taxes,” said Carole Presseault, vice president of government and regulatory affairs at CGA Canada. “Our members support the fight against tax evasion, as it hurts all Canadians by reducing government revenue that other law abiding taxpayers are required to make up, and providing an unfair advantage to those seeking to cheat the system.”