A voluntary disclosure application (commonly known as a tax amnesty application) allows a taxpayer to correct their tax affairs with the Canada Revenue Agency (CRA) without penalty or prosecution. This can include unreported or underreported income from employment or business (including E-Commerce such as eBay income), unreported capital gains, or any error made on a previously filed tax return. These applications with the CRA can cover both income tax and GST/HST.
A successful voluntary disclosure application offers taxpayers three benefits:
1. CRA will not pursue any criminal prosecution against the taxpayer.
2. CRA will not charge the taxpayer with any civil penalties.
3. CRA may reduce the interest charged on any outstanding balance.
A successful voluntary disclosure application must meet all four of CRA’s criteria:
1. The disclosure must be voluntary.
2. The disclosure must be complete.
3. The disclosure must involve an actual or potential penalty.
4. The disclosure generally must be related to information that is more than one year overdue.
You can find more information on the voluntary disclosure program from the CRA.
You can Contact Us to learn more about the Voluntary Disclosure Program.
The Ontario Ministry of Finance also accepts voluntary disclosure applications with respect to Retail Sales Tax and other taxes it administers. However, unlike its federal counterpart, the Ontario Ministry of finance does not offer any interest relief as part of its voluntary disclosure program.
For further information on this specific area of practice, please contact our specialized and dedicated tax lawyers:
TaxChambers LLP is collaborating with Andersen Global in Canada.