The CRA will tighten the eligibility criteria for the Voluntary Disclosures Program (VDP), Minister of National Revenue Diane Lebouthillier announced Friday.

In June, the CRA sought comment on its proposed changes to the VDP, which is intended to help taxpayers correct “honest” errors. The changes will be effective March 1.

The program has “been used by certain wealthy individuals and corporations as a way to avoid the consequences related to their aggressive tax planning,” the agency said in a release.

In March, the limited program will apply to taxpayers who have avoided their tax obligations. Under this new program, the CRA will seek to determine whether efforts by such taxpayers have been made “to avoid detection through the use of offshore vehicles or other means.” The agency will also look at “the total dollar amounts involved, the number of years of non-compliance, [and] the sophistication of the taxpayer,” the release says.

Further, “Corporations with gross revenue in excess of $250 million who will apply to the VDP will be considered under the limited program.”

Changes to how the VDP process works will include the following.

  • CRA will require payment of the estimated taxes owing as a condition to qualify for the program; this payment was not required in the past.
  • CRA will cancel relief if it is subsequently discovered that a taxpayer’s application was not complete due to a misrepresentation.
  • CRA will no longer allow taxpayers and authorized representatives to make disclosures on a no-names basis.

The tax agency says it has the “the resources, staff and tools to gather information.” As well, it plans to “re-examine the VDP in the coming years, with the goal of further restricting the relief it offers,” it adds.

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