Budget 2013 - Stop International Tax Evasion Program

Yes. The CRA currently accepts information, including information provided anonymously, related to suspected tax evasion and ensures that it is reviewed and provided to the appropriate compliance program. The CRA does not pay for the information that it currently receives.

Under the new initiative, the CRA will enter into a contract with an individual where information is provided to the CRA that leads to the assessment and collection of additional taxes arising from major international tax non-compliance. A payment for a percentage of the federal taxes collected will be made to the individual, subject to certain conditions. Anonymous submissions will not be accepted under this initiative.

Yes. While the initiative is being launched to encourage individuals to provide the CRA with information related to major international tax non-compliance, the CRA will continue to accept all information related to suspected tax evasion.

Aggressive international tax evasion and avoidance is recognized as a significant ongoing problem, which is often difficult to identify and address. The CRA is evolving our approach and developing new tools to effectively combat tax evasion and avoidance. Furthermore, other tax administrations have encountered success in detecting international non-compliance by paying individuals for this information.

Under the terms of the contract, the information related to the non-compliant activity must lead to the assessment or reassessment of additional federal taxes that exceed $100,000. Payments will be made only where the non-compliant activity involves foreign property or property located or transferred outside Canada, or transactions conducted partially or entirely outside Canada.

Under the terms of the contract, a payment will be made if certain conditions have been met, including the following:

• all objection and appeal rights associated with the assessed tax have expired;
• the federal tax, for which a payment is being issued, has been collected; and
• the information is not related to tax evasion for which the individual has been convicted.

A payment under the initiative will be included in taxable income in the year it is received. Individuals who are not resident in Canada for tax purposes at the time the payment is received will also be subject to tax on the payment.

Unless the individual provides the CRA with consent to release his or her identity, the CRA has a legal obligation not to disclose any identification information. The CRA will protect the confidentiality of the individual's identity to the extent possible under the law.

A graduated payment rate from 5% to 15% of the federal tax collected will be used to determine the payment based on the quality and extent of information provided. No payment will be made in respect of penalties and interest or provincial taxes.

There are many factors that affect the length of time that it will take the CRA to evaluate a file and each case will be different. The CRA is prohibited from disclosing information concerning the progress of files, but an individual will be informed once they are eligible for a payment.

The CRA will be making an announcement concerning the initiative with these details in the coming months. The announcement will include information concerning the process to follow if an individual wants to provide information under this initiative.