New Voluntary Disclosure Circular Released

On March 21, 2013, the Canada Revenue Agency (CRA) released Information Circular IC00-1R3 which deals with of the Voluntary Disclosures Program (VDP). The Circular cancels and replaces the previous information circular on the same topic that was released in 2007.

The VDP provides taxpayers who have provided inaccurate or incomplete information with the opportunity to bring their Canadian tax filing obligations up to date. As explained by the CRA, the VDP “promotes compliance with Canada’s tax laws by encouraging taxpayers to voluntarily come forward and correct previous omissions in their dealings with the CRA.”

The new Circular does not represent a material shift in the CRA’s position with respect to its administration of the VDP. A submission under the program must still be “voluntary”, “complete”, involve the application of a penalty and include information that is at least one year past due (unless the submission is to correct a previously filed return). If a submission is accepted, the CRA will agree not to pursue tax evasion charges, will waive any other penalties that would otherwise apply and will typically reduce the amount of arrears interest charged.

As explained in the new Circular, submissions under the VDP must now be made to one of three intake centres depending on the location of the taxpayer. For taxpayers in the Pacific Region, the intake centre is the Surrey Taxation Centre. Submissions made in the Atlantic, Quebec and Ontario Regions are to be made to the Shawinigan-South Tax Centre. For taxpayers in the Prairie Region, submissions are to be sent to the Winnipeg Tax Centre.

Thorsteinssons has considerable experience preparing voluntary disclosure submissions and negotiating favourable tax results with the CRA. All communications with us are strictly confidential and protected by solicitor-client privilege. If you have any questions concerning the VDP or wish to discuss a particular situation, we would be pleased to assist.

Prepared by: Alexander Demner

Alexander is a partner practicing in the firm’s Vancouver office. Alexander’s practice covers several areas of taxation, including estate planning, pre-sale and divestiture structuring, owner-manager remuneration, taxpayer representation, and tax litigation. Alexander routinely advises on and implements reorganizations for individuals,… more »