Tax evasion Canada is an act committed by a person or a business entity to evade payment of the taxes, illegally. Tax evasion could be in the form of misrepresentation of earnings and profits by trying to report less than the amount actually earned and also in the taking of deductions that may not be allowed by the CRA. The penalty for tax evasion Canada may be in the form of a fine or a mix of penalty and imprisonment.
A specific example of tax evasion Canada can be illustrated through an individual who earns his or her income in cash and then does not report that income to the CRA with an intention to pay less taxes. Business units will also be found guilty of tax evasion Canada if they intentionally report fewer sales than actual with a motive to avoid taxes on their sales transactions.
Another example of tax evasion Canada is the situation where businesses evade payment of VAT (value added taxes) or GST on account of purchases that are outside of the tax jurisdiction of the region of business operation. In simpler terms, if you buy an item in an area that charges less sales tax or VAT than where you may be residing, you have to report such kind of purchases and then pay the corresponding taxes as per the law. All those consumers or business units who are intentionally making their purchases in lower tax regions with a motive to pay less taxes are also guilty of tax evasion in Canada.
As per Section 238 of the Income Tax Act, an individual is guilty of an offense if he or she does not file an annual tax return within the deadline. He or she could face a fine of anywhere between $1,000 and $25,000. A judge could also pass a sentence to the offender involving up to a year of incarceration.
Besides not completing an annual tax return, an individual could also be considered guilty of an offense if he or she misrepresents or intentionally misleads the CRA by making false statements. Section 239 of the Income Tax Act allocates fines of at least 50% and not more than 200% of the total amount of unpaid taxes in cases of such tax evasion Canada. In such cases, a tax court judge may also pass a sentence to the offender involving a maximum of two years’ imprisonment in addition to monetary fines.
When you face tax evasion Canada charges, it is important for you to consult experienced tax professionals to assess where you stand in the tax case so that you are able to answer all questions and take care of the concerns during this time of turmoil. The Criminal Investigation Program of the CRA scrutinizes violations of tax laws such as tax evasion Canada and other forms of tax frauds. These investigations may lead to convictions, resulting in fines and imprisonment.
The convicted people are not only required under law to pay maximum fines up to 200% of the unpaid taxes but they are also required to pay all the taxes that are owed by them in addition to the interest charges and penalties that may be enforced on them by the CRA for tax evasion in Canada.