The Offshore Compliance Advisory Committee (OCAC) has published its report on the CRA’s Voluntary Disclosure Program, the first of several anticipated OCAC reports in furtherance of the OCAC’s mandate to provide advice to the Minister of National Revenue and the Canada Revenue Agency (CRA) on administrative strategies to deal with offshore compliance.

The OCAC’s recommendations in respect of the voluntary disclosure program include:

  • Less generous VDP relief in certain circumstances
  • Limited access for repeat users
  • Requirement to pay tax and interest within specific time frames
  • Insistence on all necessary and relevant information
  • No relief from transfer pricing penalties (see subsection 247(3) of the ITA)
  • Disclosure of identity of advisors who assisted with non-compliance
  • Consideration of higher-level approval requirements
  • Introduction of procedures for review by specialists in complex cases
  • Elimination of right of objection in respect of VDP reassessments
  • Consideration of amending VDP in respect of failure to file T1135 forms
  • Continuation of similar treatment for domestic and offshore non-compliance

In response, the Minister of National Revenue Hon. Diane Lebouthillier stated,

“I welcome the Offshore Compliance Advisory Committee’s first report and wish to thank the committee for its unique insight and for providing its invaluable experience to help improve the tax system for the benefit of hard-working middle class Canadians.”

“Our government has made it a priority to make the tax system fairer for middle class Canadians and to crack down on those who cheat and who do not pay their share. That is why we created the Offshore Compliance Advisory Committee – to advise us on the best ways to improve our tax system. We will continue with our efforts to crack down on tax cheats. My message is clear: the trap is closing.”