The Canada Revenue Agency (CRA) will pay rewards to catch people who are hiding money or assets offshore.
While it is not illegal to invest or hold money outside of Canada, the CRA points out that Canadian residents are obliged to report their worldwide income when they file their taxes. In a statement released on Jan. 22, the tax authorities encouraged people to make use of its Offshore Tax Informant Program (OTIP) to report those who are trying to circumvent these rules.
Under the OTIP, individuals are asked to provide specific information about Canadians who are not declaring offshore money or assets. If the CRA can collect more than $100,000 in federal taxes as a result of the tip, the informant will receive a reward of 5% to 15% of the amount collected. Since the program was first launched in 2014, the CRA says that it has received calls from more than 600 potential informants and it is now reviewing over 120 cases.
The CRA gives the following examples of when it would be appropriate to call the OTIP:
- Mr X has a business in Canada. You have information that shows that he is only declaring some of the income to the CRA and is sending the undeclared income to foreign country A. You have information on the name and address of the bank where the money is being sent.
- Mrs Y has an investment account and several rental properties in foreign country B. You have information that shows that she makes a lot of money from these investments but is not declaring any of the income to the CRA. You have information about the account (name and address of bank, possibly the account number) and the addresses of the properties.
Informants are encouraged to call OTIP at 1-855-345-9042 in North America or 613-960-4265, calling collect if necessary. The CRA says it does not take any names during the call, and it will also make arrangements so that those who do not speak English or French can use the language in which they are most comfortable.
"When Canadian residents do not report all of their income and when they hide this income and their assets in other countries, it places an unfair burden on those who pay their taxes. Unpaid taxes mean less money for important programs and services including health care, employment insurance, as well as urban and rural infrastructure projects that benefit all Canadians," says the CRA. "The quality of life that all Canadians enjoy is supported by the taxes we pay."