A voluntary disclosure could be made by any taxpayer in Canada. You can be an individual, a business enterprise or a trust. You can be a resident or a non-resident of Canada. You can be an employer or a payer. You are entitled even to appoint an authorized representative to file a disclosure on your behalf in the Voluntary Disclosure Program Canada.
The types of voluntary disclosure program Canada that you can submit are personal or business income which may be unreported from sources within or outside of the country, source deductions which may be unreported or it could be unreported withholding tax. The voluntary disclosure program Canada also includes information returns that are filed late, expenses that you may not have been entitled to claim or GST/HST omissions.
By filing a valid disclosure with the CRA, you will help yourself pay only those taxes that you owe to the CRA along with the interest that is applicable. Through the voluntary disclosure program Canada, you will be able to avoid those penalties and the possibility of prosecution. A valid voluntary disclosure has to meet this criteria:
- The voluntary disclosure has to be made before you get notified of any compliance action by the CRA
- The voluntary disclosure program Canada may involve penalties; if qualified, you will get full penalties waived.
- The disclosure has to include information that is more than one year overdue.
- The voluntary disclosure has to be complete with information to support your submission. If you fail to give full information, your voluntary disclosure could be rejected.
The voluntary disclosure has to be completed on Form RC199. If an authorized professional representative submits to the voluntary disclosure program Canada on your behalf, that representative has to sign and include a copy of either Form T 1013 which authorizes or cancels a representative or include a copy of Form RC 59 which declares the business consent. These forms could be submitted to the CRA tax centers.
The CRA generally sends acknowledgment letters in receipt of disclosure after it receives your application. The letter of acknowledgement from the CRA usually includes information about what the next steps would be in the disclosure process. The effective date of disclosure is the date CRA actually receives your submission. This date is stamped on the envelope in the CRA mailroom.
The taxpayer will start receiving the benefits of the voluntary disclosure program Canada for the data that has been disclosed on the effective date of the disclosure. The CRA may send out a further letter and it may request more information from your side. You will generally get a month’s time to submit the required information, failing which your voluntary disclosure will be rejected.
Once the CRA reviews your submission on the voluntary disclosure program Canada, you will be advised in writing of their decision to accept or reject your disclosure. If you feel that the decision on your disclosure has not been fair or reasonable, you can request for another review of your disclosure file by writing to the Director of the CRA tax centre that has issued the original decision. If you fail to provide the requested information within a specified time frame, then the CRA will not consider your request for a second review under any conditions.