In June of 2017, Trowbridge reported the proposed changes to the CRA Voluntary Disclosure Program (VDP) that would take effect January 1, 2018, based on the recommendations of the Offshore Compliance Advisory Committee (OCAC) who reviewed the VDP to improve this part of Canada's taxation policies. Trowbridge also encouraged our readers to take advantage of CRA's online consultation on the changes that were proposed. Ultimately, the date that the changes will take effect has been pushed back to March 1, 2018, and the new policies in the final version of the program will likely contain some version of the proposed changes below.
Essentially, the VDP guidelines currently allow Canadians who know they have made mistakes on their previous tax returns, from at least one year prior, to come forward and notify the CRA of their misfiled documents. They can then make the appropriate changes to the information without fear of persecution.
The proposed changes would drastically change these policies, including:
- Cracking down on major cases of non-compliance and providing less relief in such cases
- Adding payment of taxes owed as a condition to qualify for the VDP
- Canceling VDP relief for any applications that are found to be incomplete due to willful misrepresentation
- Making corporations with more than $250 million in gross revenue and/or any whose application involves transfer pricing, excluded from VDP relief
- Changes the calculation of interest relief that accepted applications are eligible for
- Ending VDP relief for applications involving proceeds from criminal acts
The new program will also place applicants in one of two categories:
the general program, which allows full penalty relief and partial interest relief, or
the limited program, for cases of major non-compliance usually citing willful negligence and fault on the part of the taxpayer, which would only qualify the applicant for some reduced relief.
While the changes will now
be taking effect on March 1, filings under current policies will have to be submitted by February 28, 2018
, and we will keep all our clients informed as the new policies become known.
For more information, please contact: