Combatting tax crimes
Combatting tax evasion and other serious tax crimes is important on many levels. The quality of life that Canadians enjoy is largely supported by the taxes we pay. Revenues collected are fundamental in supporting essential programs and services such as health care, childcare, education, and infrastructure projects that benefit all Canadians.
Tax evasion explained
Tax evasion occurs when an individual or business intentionally ignores Canada's tax laws. This includes falsifying records and claims, purposely not reporting income, or inflating expenses.
Consequences of tax evasion
Tax evasion is a crime with serious consequences. Tax evaders face prosecution in criminal court, including court fines and/or jail time in addition to having to pay taxes owing, as well as interest and penalties.
In some cases, an individual may be charged with fraud under section 380 of the Criminal Code, which carries a prison term of up to 14 years on conviction.
Court convictions are published in local, regional, and national media to draw attention to the consequences of tax evasion and fraud. The CRA will also publicize criminal convictions and other high-profile enforcement actions through enforcement notifications.
In addition, the fingerprints of individuals charged with, or convicted of, tax evasion are kept in the Canadian Police Information Centre (CPIC) and are available to all domestic law enforcement agencies. Foreign law enforcement agencies with links to the CPIC system may consider such an individual as not admissible to their country. This could limit an individual's foreign travel.
Protecting the tax system
The Canada Revenue Agency's (CRA) Criminal Investigations Program (CIP) investigates significant cases of tax evasion, fraud and other serious violations of tax laws and where appropriate refers cases to Public Prosecution Service of Canada for criminal prosecution.
The CIP focuses on the most serious cases that meet one or more of the following criteria:
- significant cases of tax evasion with an international element
- promoters of sophisticated and organized tax schemes aimed at defrauding the government
- joint investigations with other enforcement agencies, including cases of tax evasion involving money laundering and terrorist financing
- significant cases involving income tax and/or GST/HST tax evasion including the underground economy
The CRA works closely with the Royal Canadian Mounted Police (RCMP), provincial and local police, and other law enforcement agencies on tax cases to crack down on tax cheats and maintain the integrity of the tax system.
In addition, the CRA shares knowledge and expertise with domestic and international partners. This information helps to identify new schemes and challenge those who deliberately evade their taxes. Our intelligence gathering capabilities enhances our ability to identify and address global tax evasion.
Distinguishing an audit from a criminal investigation
An audit is the verification of information provided by taxpayers to the CRA. When an audit is conducted, it is to determine a tax liability and taxpayers may be ordered to pay sums of money to the Receiver General of Canada to correct their tax affairs. Audits are considered a civil matter, and they relate to tax avoidance.
In a criminal investigation, the Crown has to demonstrate that the taxpayer intentionally contravened Canadian tax laws in order to evade taxes. This has to be proven beyond a reasonable doubt. If convicted of tax evasion, a taxpayer may face both court fines and imprisonment, in addition to paying the taxes they tried to evade, penalties and interest owing.
The criminal investigation process
CRA's criminal investigations of tax evasion and fraud are complex and require a significant amount of time to complete. That amount of time depends on a multitude of factors that may be unique to each case.
To learn more about the criminal investigation process, go to The CRA's criminal investigations process.
Learn how you can help
Be aware of your reporting obligations
Taxpayers must report certain foreign assets with a total cost of more than $100,000 on Form T1135, Foreign Income Verification Statement, by the filing due date of their income tax return. They must also make sure that they have properly reported any foreign income and gains on their income tax return.
Submit information to the Offshore Tax Informant Program
If you are aware of a situation or have information regarding international tax evasion, go to Report offshore tax cheating.
Submit information to the National Leads Centre
To learn more, go to Report a lead on suspected tax cheating in Canada. Your identity will not be disclosed and you may provide information anonymously.
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