Canada: Canada-Swiss Information Exchange For Unreported Offshore Income

Canada and Switzerland have entered into an agreement which will commence in 2018 for the automatic exchange of information. Swiss banks are already requiring Canadian clients to provide evidence that their Swiss offshore bank accounts have been reported in Canada on form T1135 and offshore income reported on a T1 tax return, or that a voluntary disclosure has been initiated. This is generally done by having a Canadian income tax lawyer confirm to the bank that a tax amnesty application for the foreign bank account has been submitted to the Canada Revenue Agency (CRA). Some Swiss banks have advised that they will liquidate Canadian owned bank accounts in early 2016, and mail a cheque to the Canadian client’s last known address if this confirmation has not been provided. If you have not previously done a voluntary disclosure for unreported offshore assets or unreported offshore income you should contact one of our top Toronto income tax lawyers to do so by December 31, 2015. If CRA audits you then you are no longer eligible to benefit from the voluntary disclosure program, which provides for no prosecution and no penalties and potential interest relief. If you receive a cheque and deposit it into your Canadian bank account, it will probably trigger a tax audit. CRA receives information from financial institutions on offshore transfers in excess of $10,000, and it audits offshore transactions. In some cases, the CRA has begun an audit very quickly, in some cases only weeks after the transfer was made.