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Anthony Layton MBA, CIM

Chairman & CEO, Portfolio Manager

Peter Guay MBA, CFA

Portfolio Manager
Contact
  • T514.875.7566 x 224
  • 1.800.875.7566
  • F514.875.9611
  • Place Alexis Nihon
  • 3400 de Maisonneuve Ouest,
    Suite 1501
  • Montreal, Quebec H3Z 3B8

What is the Voluntary Disclosure Program?

March 20, 2018 - 0 comments

You have probably heard about the Panama Papers, and the Paradise Papers late last year. Millions of documents revealed the offshore tax practices of vast corporations and very wealthy individuals including the Queen of England and more than 3,000 Canadian individuals, corporations and trusts. Why did I bring this up? Because you might have also heard of something called the Voluntary Disclosures Program.

Now before I start talking about the Voluntary Disclosures Program, I want to state that the Canadian Revenue Agency (CRA) has not yet determined if any of the Canadians mentioned in the Paradise Papers has done anything wrong.That’s because using offshore trusts and corporations isn’t illegal if it’s managed properly, But some corporations and people listed in the Paradise Papers perhaps may not have declared everything they should have to CRA. If you do find yourself in a situation where you made a mistake on your taxes or didn’t file and yes, that does happen, you can correct your mistake through the voluntary disclosure program.
For example, many people work abroad for a few years while remaining Canadian residents, but either don’t realize or forget to declare their worldwide earnings on their Canadian tax returns during that period.

The Voluntary Disclosures Program or VDP gives you a second chance to change a tax return you previously filed or to file a return that you should have filed. You can use this channel to ask for relief from interest, prosecution and penalties that might otherwise be charged if CRA had found the mistake themselves.
Almost anyone can apply from individuals, corporations, trusts, and partnerships. The trick to VDP is to apply for it before the CRA comes knocking on your door. That’s because there’s a strong chance that they will find you if you have evaded your taxes.

We all make mistakes, or have been given bad advice in the past. What’s important is that you correct these as soon as you find them. The CRA understands this, which is why they offer the VDP program in the first place. Choosing voluntary disclosure could prevent criminal charges and fines, avoid civil tax penalties, provide significant concessions on interest and immunity against audit. Plus you get peace of mind, which is priceless.

 

By: Peter Guay with 0 comments.
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