Under the general program, a taxpayer would benefit from penalty relief for all penalties incurred within the ten-year limitation period. However, under the limited programme, a taxable person would not benefit from a reduction in penalties for gross negligence, but from exemption from other penalties within the ten-year limitation period. Taxpayers who are unsure whether to continue their disclosure may participate in a pre-disclosure discussion on an anonymous basis, but this is not the case for applications under the limited programme. This makes it possible to speak with a representative of the VDP, which is non-binding and general in nature, without revealing the identity of the taxable person. This method allows the person in charge of the VDP to confirm that the information provided does not contain anything that would immediately disqualify the taxable person from the subsequent taking into account of the VDP. However, a definitive finding can be made only when the identity of the taxable person is known and all the facts relating to the four conditions of validity have been verified. Our Ontario tax office was contacted by John d`Oakville, who had been charged with commercial fraud and had not reported the income from that fraud. We pointed out to him that income from criminal activity is fully taxable and that police officers have always reported this type of activity to the CRA. Our tax lawyers in Toronto filed a complaint for the unreported income and he was able to escape prosecution for tax evasion and did not receive penalties.
The Voluntary Disclosures Program (VDP or Amnesty Tax) is a program of the Canada Revenue Agency (CRA) that allows Canadian taxpayers to report and correct their tax errors as long as certain requirements are met. In order for a taxable person`s self-declaration to be accepted, four conditions must be met at present. First, there can be no ongoing enforcement action against the taxpayer with respect to the disclosed matters. Second, disclosure must be complete. Third, disclosure must include the application of a sanction or the possible application of a sanction. Fourth, the disclosure must contain information that has been expected for at least one year. When these conditions are met and the self-declaration of the taxable person is accepted, the RATING agency offers a complete reduction of the penalties, a partial reduction of the interest rates and waives the right to pursue proceedings against the taxable person. The obligation to disclose foreign assets came into force in 1997 and the fine for non-deposit may be high. Paragraphs 35 and 36 of the Circular on voluntary disclosure of the credit rating agency set out the applicability of sanctions as one of the criteria for valid application.
As a result, Canadian taxpayers retain the right to use the Voluntary Disclosure program to disclose their foreign real property that has not been previously disclosed and to obtain interest and penalties. Taxpayers are expected to remain compliant after using the self-report program. The current voluntary disclosure program does not allow a taxpayer to benefit more than once from the relief provided by the program, except in unusual situations […].