The term offshore account has such a seedy name in film and TV these days. You say the term and people associate it with tax evasion, shady accounting, money laundering or worse.
The fact remains that an offshore account can be a vital part of your business, and is perfectly acceptable, as long as you stay within the Canada Revenue Agency’s guidelines.
However, people do try to cheat the system, which is why The Federal Government recently announced new guidelines when reporting offshore property and income.
“Our Government is committed to combating tax evasion and getting tough on tax cheats. Since 2006, we have introduced over 75 measures to improve the integrity of the tax system,” said Parliamentary Secretary McLeod.
“The strengthened reporting requirements are just one example of the actions being taken by our Government to crack down on tax cheats. These measures are great news for hardworking Canadians who pay their fair share and bad news for those who may seek to cheat the system.”
Starting with the 2013 taxation year, Canadians with foreign property with a cost of over $100,000 will have to provide additional information to the CRA.
The criteria for those who must file a Foreign Income Verification Form (T1135) has not changed. A new form now includes more detailed information on each specified foreign property.
The new reporting requirements include:
• The name of the specific foreign institution or other entity holding funds outside Canada; • The specific country to which the foreign property relates • The income generated from the foreign property
The Government also announced other new tax evasion measures like:
• The new Stop International Tax Evasion Program • The mandatory reporting of international electronic funds transfers over $10,000 to the CRA • Streamlining the judicial process that provides the CRA authorization to obtain information from third parties such as banks.