May 28th, 2020
Feb 16th, 2016
By Steven Sitcoff
On January 25, 2016, the Canada Revenue Agency (CRA) released its Annual Report to Parliament for the years 2014-2015 . The Report contains certain statistics of particular interest as regards voluntary disclosures of offshore accounts, as follows:
The Offshore Tax Informant Program, which offers financial awards to whistleblowers, generated over 1,900 calls and led to 110 active cases in its first year.
Mandatory reporting by certain financial intermediaries to the CRA of international electronic funds transfers of $10,000 or more, beginning in January 2015, led to the reporting of approximately 3 million such transfers in the first three months alone.
In the fiscal year 2014-2015, 19,134 voluntary disclosures were received (an increase of 21% over the prior year), representing over $1.3 billion of unreported income (up 65% from the prior year). Included in the latter amount was $780 million in offshore income (an increase of 157% from the prior fiscal year); this large increase was attributed by the CRA to international efforts to share tax data (a trend that we expect to have continued into 2015, especially as large Swiss banks in particular began to pressure clients to disclose their accounts by year’s end or face account closure).
Of the voluntary disclosure files received in the fiscal year 2014-2015, 95% were completed, which indicates that the CRA has been processing files in a timely and effective manner.
Steven Sitcoff is a tax lawyer at Spiegel Sohmer who works on a variety of corporate and personal tax planning matters, as well as handling disputes with tax authorities. He has extensive experience in making voluntary disclosures to the federal and provincial tax authorities regarding offshore accounts.