Undisclosed Foreign Assets and Income
If you have undeclared foreign income, you can count on the CRA discovering it and charging tax and penalties on this income. Farber Tax Solutions can help.
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Foreign Income and Assets
It has become easier in recent years for the CRA to find undisclosed foreign income and assets due to tax information exchange agreements that allow the Canadian government to easily share and receive tax information with other countries. Residents of Canada who have foreign income and assets must report them to the CRA as they may be subject to Canadian taxes.
Undisclosed foreign income or assets discovered by the CRA are subject to significant penalties, interest, criminal tax evasion charges and legal enforcement action.
Foreign employment income must be reported as the amount before taxes withheld by the foreign country, in Canadian dollars. Fortunately, there may be foreign tax credits that can be claimed to reduce the taxes payable, and certain types of foreign income are exempt.
In particular, taxpayers who own foreign assets with a total value of over $100,000 at any point during the year must declare those assets on a Foreign Income Verification Statement, which is then submitted along with the annual income tax return. These include, but are not limited to bank accounts outside of Canada, real estate property, shares in foreign corporations, and government or corporate bonds. The failure to declare foreign assets may result in severe penalties and interest.
Solutions to Undisclosed Foreign Income or Assets
Taxpayers have a chance to avoid penalties and interest by coming forward under the CRA’s Voluntary Disclosures Program. The Voluntary Disclosures Program is a last chance opportunity for taxpayers to come forward voluntarily to clean up their tax affairs without punitive consequences.
How We Help
Taxpayers with undisclosed foreign income or assets should file a voluntary disclosure immediately. As the CRA allows only a single chance to make a disclosure, it is crucial that submissions are accurate and consistent. Our team of ex-CRA staff, lawyers, and accountants brings extensive experience to ensure that your voluntary disclosure application is successful and can you navigate the complicated process.
For more information on how to deal with undisclosed foreign income and assets, contact us to schedule a free consultation.
Farber Tax Solutions can help you successfully deal with CRA problems. We utilize the experience of our tax experts to:
- 1| Offer a comprehensive solution that is focused on achieving the most favourable possible outcome for your tax issue;
- 2| Communicate with the CRA on your behalf and navigate the entire CRA dispute process; and
- 3| Offer a complete solution to your tax problems, including ex-CRA professionals, lawyers, and experienced accountants.
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