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It is important to be familiar with national laws that can influence your tax situation. The more you are prepared for this by having an experienced tax attorney at your side as soon as you become eligible to meet some of these requirements, the easier it will be to achieve these goals

When you choose to partner with Rotfleisch & Samulovitch for your tax-related concerns, including the management of any past-due offshore reporting requirements, you’ll benefit from our tax knowledge and experience.

Offshore Asset and income Reporting Requirements Explained by Offshore Assets Lawyer

Canadian residents are required under Canada’s Income Tax Act to report all worldwide income on income tax returns, including all: offshore foreign income. This includes unreported foreign pension income even if it is not taxable in the country in which it is paid. There is also a requirement to report offshore assets in excess of $100,000 on a form T 1135.

Some of the most common questions presented by individuals who have Offshore income is what could happen to them if they have not reported it and whether or not they were truly classified as a Canadian resident at the time they earned the unreported Offshore income

Experienced Canadian tax lawyers at Rotfleisch & Samulovitch can assist you with both of these questions as well as any situations that have arisen related to unreported Offshore assets or unreported offshore income. Canadian resident determination and tax liability questions must be handled by an experienced tax attorney who has worked in this field for many years. Many taxpayers are confused about tax residence requirements which differ from immigration law and about the voluntary disclosure program since the information published by the CRA appears to be contradictory about the relief for penalties.

All Canadian residents must report foreign Offshore pension income whether or not taxable in the country of origin and even if they paid taxes to that other country. A Canadian resident could be entitled to a foreign tax credit in order to avoid double taxation if foreign tax has already been paid. In cases like this, the foreign tax credit reduces the Canadian tax, but this does not always necessarily happen to bring the amount due to zero.

This is because of changes in the income tax rates assessed in the country in which the pension comes from and whether or not a tax treaty exists between Canada and the country that pays the pension. A Canadian resident could still have substantial tax liabilities under Canada’s Tax Act and this is why it is recommended that you retain an expert tax attorney. The voluntary disclosures program ( VDP or tax amnesty)may be an option for unreported offshore income including pension income or for failure to report offshore assets.

This allows Canadian taxpayers to come forward and report any incomplete or inaccurate financial details or previously unreported facts about offshore holdings. They can normally avoid civil income tax penalties and file tax returns that would avoid criminal tax prosecution. In order to participate in the voluntary disclosure program, the disclosure must be voluntary (that is to say before any CRA contact), a penalty must apply and the information has to be a minimum of one year overdue, and the information provided must be incomplete.

If you are unsure of whether or not you are a resident for Canadian tax purposes, our knowledgeable Canadian tax lawyers can carrying out a residence determination for you. Schedule a consultation with our top Canadian tax lawyers today to learn more.

Frequently Asked Questions About Offshore Assets and Income

Offshore income is any income earned from a jurisdiction other than Canada. Canadian residents are taxable on worldwide income which means they have to report all of their offshore income on their annual Canadian income tax returns. Failure to do so is tax evasion which is subject to penalties including fines and jail time. A voluntary disclosure can be submitted if you have failed to declare your offshore income and you will not be liable to penalties or prosecution.

Any offshore assets including offshore bank accounts in excess of $100,000 Canadian have to be disclosed annually on a form T1135.Failure to file the form T1135 is subject to penalties.Canadian taxpayers who have failed to disclose their offshore assets can submit a voluntary disclosure to CRA to avoid penalties and prosecution.

All offshore income earned by a Canadian resident including interest earned on offshore bank accounts is fully taxable in Canada.If you have not declared your offshore income you can by filing a voluntary disclosure with CRA and thereby avoid any possible prosecution or penalties.

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Pro Tip

CRA Tax Audits

There are over 350,000 tax audit and review actions conducted by the Canada Revenue Agency on a yearly basis. Around 15,000 of these tax audits deal with “cash only” businesses (i.e. the underground economy). Additionally, an estimated 35,000 are tax shelter audits.

Get your CRA tax issue solved


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2822 Danforth Avenue Toronto, Ontario M4C 1M1