Have you been accused of failing to report offshore assets or income? You could be facing significant problems or even penalties depending on the situation. Reporting this information and establishing a system for ongoing compliance is important.
You need to understand the requirements of Canada's Income Tax Act. Canada's Income Tax Act makes it mandatory for Canadian residents to report all income from around the world on their income tax returns. This includes sovereign pension income from offshore.
Some of the most common questions surrounding this process include whether or not the person was a Canadian resident at the time they had offshore income and what to do if they did not report offshore income. Our Canadian tax lawyers have extensive experience in managing these types of cases and understand how to assist when you are being assessed with liabilities or residence determinations.
It can be very difficult to figure out the accurate answer as published by the CRA. The details published by this agency can be confusing for people who are trying to determine whether or not they should participate in the voluntary disclosure program.
It is critical to understand that practically all foreign offshore pension income needs to be reported by a Canadian resident even if that offshore income was not taxable in the origin country or if taxes were paid in that foreign jurisdiction.
You could be eligible to obtain a foreign tax credit if foreign taxes were already paid, however, this does not always happen to reduce the amount owed in terms of your Canadian taxes. You need support from dedicated Canadian income tax lawyers about how to understand the voluntary disclosures program and how to participate in it.
This is extremely important if you have failed to report pension income. Canada Revenue Agency's VDP allows those taxpayers in Canada who may have reported incomplete or inaccurate information to come forward without facing the dangers of criminal tax prosecution or civil income tax penalties.
The conditions for a valid disclosure include that your disclosure is voluntary, that a penalty is being applied, that the information is at least one-year overdue, and that the information is complete. You need to understand whether or not this is a beneficial program for you and whether or not you should have been classified as a Canadian resident for income tax purposes.
Our attorneys can help you with this determination and can assist you when problems have already come on board regarding unreported offshore income.
"These articles provide information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."