CRA Gets Serious about International Tax Evasion
Canada Revenue Agency (CRA) has never been a fan of tax evasion, but now the agency is pulling out all the stops to take control of the issue. While Canada is among one of the most compliant nations in the world for reporting taxes, international evasion and avoidance techniques are an increasing problem.
According to a recently released infographic on the CRA website, the agency is currently conducting 750 audits that cover more than 20,000 transactions. That’s more than $7 billion in hidden funds! Twenty criminal investigations have resulted from this crackdown so far.
Sadly, international tax evasion is on the rise – to the tune of 400 per cent over the last six years. With such a steep increase, here are just a few of the steps CRA is taking to control this problem:
International electronic funds transfers in excess of $10,000 are now subject to additional scrutiny. In 2016, CRA allocated extra resources in its budget to devote to following up on such transfers.
The Offshore Tax Informant Program (OTIP) is now in place and yes, it’s exactly what it sounds like. Canadians can anonymously call and tip off suspicious transactions or blow the whistle on an international tax evader.
CRA is collaborating with international partners to share data and resources.
The Voluntary Disclosure Program gives Canadians a chance to correct tax returns that don’t reflect monies that may have slipped, sight unseen, over the border.
Tax schemes and scams are being aggressively identified and routed out.
An Offshore Compliance Advisory Committee (OCAC) has been formed.
Why do people risk penalties and possible jail time to engage in international tax evasion? It comes down to those that have more dollars than sense. Pun intended.
We all work hard for our money and want to keep as much of it as we possibly can in our pocket. For the very wealthy and for companies that make millions of dollars a year, handing thousands – even millions – over for the greater good can feel very unfair. It is important to note, however, that those same people also enjoy the same free health care, maintained infrastructure, access to education and other comforts of life that are funded by taxes.
In the end, Canada’s tax system isn’t entirely perfect. What massive, nation-wide system that encompasses millions of people and several tax brackets is ever going to be perfect? But it’s not a bad system and it’s not a broken one either. The system is designed for everyone to pay into the pie, and for everyone to get a slice.
CRA is very serious about catching and punishing tax evaders. Your best strategy for paying your fair share, not more, not less, of the taxes you owe. Consult with an accountant that knows all the legal ways you can save on paying tax while still paying what you owe, in full and on time.