Individual and business taxpayers often do not file their tax returns on time or sometimes, they overstate their deductions or expenses to receive a higher refund. The tax amnesty program is the voluntary disclosure program which is designed to help these kind of taxpayers to volunteer and come forward to pay their arrears taxes with penalties which may be reduced.
There are things that you need to know about tax amnesty:
What kind of taxes qualify for the tax amnesty program in Canada?
All personal or corporate taxes that have been evaded in Canada qualify under the tax amnesty and the Voluntary Disclosure Program. They include income tax on income which has not been declared before and can even include income from even criminal activities. It will also include the general sales taxes and the HST on income which was not declared before or which was collected and not remitted.
What are the principal benefits of applying for?tax amnesty?
You may not be prosecuted. There may not be any penalties and interest may be reduced. Your case will be treated with confidentiality.
The?tax amnesty?program is to encourage people make the right decision to pay their back taxes and file their returns in arrears. In such cases, the taxpayers may be required to sign an agreement where they will have to agree to file and pay all taxes in the future, on time.
Do you need to report your back taxes through tax professionals who handle tax amnesty?
It is not mandatory but it is highly recommended. Acting on your own could lead you into tough situations with the CRA who may deny your application for tax amnesty and inflict penalties on you.
What are the penalties involved when you file late tax returns?
Filing tax returns after their due date could attract a late filing penalty of up to 17% of the taxes which are unpaid. The penalty amount can incur further interest. For those taxpayers who repeat their late filing in the succeeding years, the penalty increases to up to 50%.
Do non-Canadian residents qualify for tax amnesty program?
All residents who are non-Canadian but have a tax liability as a result of living in Canada previously or those who have Canadian source income may qualify for the tax amnesty program in Canada.
What happens in the case of not being able to produce all the records?
Absence of relevant records may not disqualify you from applying for tax amnesty and making a voluntary disclosure but you will have to establish your earnings to the best of your abilities.
What is the procedure for applying for tax amnesty?
An official written explanation has to be provided to make sure that confidentiality is maintained in the Voluntary Disclosure application with all relevant information of tax amounts which may not have been disclosed by you previously. If you seek professional help, there will be a representative who will be exclusively assigned to your case to maintain on your behalf the privileged ninety days to submit your information in detail or apply for extension period if required.