Tax Alert

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Come to us, before we go to you

The Canada Revenue Agency (CRA) wants to make you aware of the Voluntary Disclosures Programs (VDP) as we move forward to aggressively address non-compliance internationally and domestically.

Here are some examples of what the CRA did to address non‑compliance in the 2008-2009 tax year:

• The CRA conducted over 370,360 audit and review actions, including over 12,800 underground economy audits;
• The CRA completed 1,439 international audits, and 34,111 audits of tax shelters;
• The CRA identified a total dollar value of $5.2 billion in non‑compliance for international and large business and $2.2 billion for small and medium-sized enterprises; and
• The CRA completed 148 interprovincial tax avoidance cases, which resulted in more than $300 million worth of taxes being recovered.

These accomplishments led to results in the courts, including significant fines and - for some people – jail time.

• In 2008-2009, the CRA referred 164 income tax and GST/HST investigations to the Public Prosecution Service of Canada;
• The CRA referred 58 GST investigations to the ministère de la justice du Québec;
• These and referrals from previous years resulted in 323 convictions for fraud or tax evasion (including 66 cases in Quebec courts);
• Courts across Canada imposed fines of close to $29.2 million;
• The offenders were sentenced to more than 81 years in prison collectively; and
• Convictions were obtained in 98% of the cases prosecuted.

In cases of gross negligence, the Income Tax Act and Excise Tax Act allow the CRA to assess a penalty of up to 50% of the unpaid tax or the improperly claimed benefit. In addition, the court may, on summary conviction, fine them 50% to 200% of the tax evaded, and sentence them to a jail term of up to two years.

The CRA is a member of international organizations that work to tackle the abusive use of tax havens. International partnerships help us uncover schemes that are developed abroad and marketed in Canada. Taxpayers with unreported assets and income offshore could face penalties up to 50% of the unreported tax on income and 5% per year for any unreported assets.

You can come to us to correct your tax affairs before we go to you. Under VDP, individuals who have not reported all of their income can voluntarily correct their tax affairs. They will not be penalized or prosecuted if they make a full disclosure before they become aware of compliance actions being initiated by the CRA against them. These individuals may only have to pay the taxes owing, plus interest. More information on the (VDP) can be found on the CRA's website at www.cra.gc.ca/voluntarydisclosures.

This document is also available for download in PDF format.

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Date modified:

2010-01-20