Canada cracking down on foreign assets

published by asingh on Tue, 07/02/2013 - 20:52
The Canadian government has announced the introduction of tougher foreign income declaration requirements, as part of its crackdown on international tax evasion and so-called "aggressive” tax avoidance.
Canadians holding overseas property costing over C$100,000 will have to provide additional information to the Canada Revenue Agency (CRA).
Starting from the 2013 taxation year, they must use a revised Foreign Income Verification Statement (Form T1135) to state which foreign institution or entity holds funds for them outside of Canada. They must additionally hand over details of the specific country to which the foreign property relates, along with information on the income generated from that property.
This new law will impact immigrants who are still holding assets back home. In particular, this law has affected the Punjabi community in cities like Vancouver where many still own and generate income from lands back in India.
The CRA is keen to stress that failure to report any income from domestic or foreign sources is illegal, and that it will actively pursue cases of non-compliance.
This foreign assets policy is part of the Finance Minister Jim Flaherty’s latest budget. It also proposes a three-year extension to the reassessment period for a tax year in cases of improper, late, or non-filing.
Launching the new T115, Parliamentary Secretary Cathy McLeod said: "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."
The Government is also seeking the mandatory reporting to the CRA of international electronic fund transfers over C$10,000.
This requirement will be coupled with reforms to the judicial process that will allow the CRA to obtain information from third parties, including banks. It is investing C$30million in these, and other, initiatives.
Story notes from by Mike Godfrey, Tax-News.com.
 
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