Canadians Volunteering Tax Info
The Canadian tax authority’s latest investigation into undeclared offshore bank accounts has already resulted in 19 individuals coming forward with details of their unreported bank holding at the Swiss division of HSBC.
As we reported earlier, on September 30th 2010 the Canadian Revenue Agency (CRA) announced that they had received banking and personal information on 1800 Canadians with potentially undeclared accounts at the HSBC bank in Switzerland. The CRA has already initiated investigations into the information, hoping to uncover evidence of tax evasion committed by Canadian taxpayers. Since the announcement, 19 Canadians have voluntarily come forward and provided the tax authority with information on their accounts. Preliminary investigations conducted on 15 of these accounts have revealed evidence of at least CAD 1 million in unreported incomes.
On October 19th Keith Ashfield, Revenue Minister of Canada, stated that in 2009 approximately 3000 Canadians voluntarily came forward and revealed information on their unreported earnings and hidden assets. He also stated that the CRA is expects to see at least twice the number of volunteers come forward this year. He went on to comment on the volunteers and the ongoing investigations into the HSBC data, saying, “We’re being very proactive on the file and things are happening.”
The CRA is hoping to capitalize on the increasing international pressure exerted by governments against taxpayers hiding their assets in offshore accounts. As the CRA spreads its tax investigations to an increasing array of jurisdictions worldwide, and the number of international tax information exchange agreements develops, the tax authority hopes to apply pressure and encourage holders of undeclared accounts to come forward voluntarily. As further motivation, Stephen Harper, Prime Minister of Canada, has announced that on October 22nd he will hold talks with Swiss President Doris Leuthard regarding instating further bilateral information exchange agreements between the two countries, which would make further tax evasion investigations more robust and effective.
The CRA currently runs a Voluntary Disclosures Program, which is aimed at encouraging tax payers with hidden assets to reveal their undeclared information in exchange for only being held liable pay their taxes owing and any accrued interest, bypassing further penalty fees.
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