Changes to Voluntary Disclosures
If you are behind on your taxes you may want to pay attention! On June 9, 2017 the Canadian Revenue Agency (CRA) released proposed changes to the Voluntary Disclosures Program (VDP) effective January 1, 2018. The current program is quite lenient and the CRA has concerns that it may actually reward non-compliance.
Under the current rules, if the CRA accepts the disclosure the taxpayer will NOT be charged penalties or prosecuted with respect to the disclosure. Additionally, the CRA may provide some interest relief.
Under the proposed rules two tracks for non-disclosure will be created. The General Program will be very similar to the current program. However, under the Limited Program penalties will be assessed and no interest relief will be provided. This track will apply for disclosures which are considered to be major situations of non-compliance, such as active efforts to avoid detection, large amounts, multiple years of non-compliance and sophisticated taxpayers. Gross negligence penalties and criminal prosecution will still be waived under both streams.
The most common use of this program in my practice, is for taxpayers with multiple years of non-compliance. If these proposed changes are finalized, which I expect they will be, starting January 1, 2018 the cost of making a disclosures will increase significantly.
If you are behind on your taxes, or have a disclosure to make, I encourage you to contact your tax advisor ASAP to see if you may qualify for the program and if a disclosure can be made prior to January 1, 2018.
Helping you see the opportunities in your numbers.
Jonathan Audette, CPA, CA
Jonathan Audette Professional Corporation