Report offshore tax cheating – Overview
If you suspect potential misuse of the COVID-19 emergency benefits and programs (the CERB, the CEWS, or the CESB), you can report it to the Leads Program.
The Canada Revenue Agency's (CRA) Offshore Tax Informant Program (OTIP) allows for financial rewards to be made to individuals who provide information related to major international tax evasion and aggressive tax avoidance that leads to the collection of taxes owing.
The CRA encourages anyone, no matter where they are in the world, to come forward if they have information about major international tax non-compliance.
What is being reported
Information received from informants about international tax non-compliance ranges from individuals failing to report foreign income to individuals or corporations using more complex tax structures to avoid paying the taxes they owe. The CRA has also received lists of bank accounts that Canadians hold in foreign countries. Here are a few examples of situations which can be reported to the program:
- A Canadian taxpayer does not report inherited assets located outside of Canada or the income earned on the assets
- A Canadian taxpayer does not report offshore assets they obtained before becoming a Canadian resident or the income earned on the assets
- A Canadian taxpayer’s income that they report to the CRA was low and not consistent with their lifestyle. They live in a high-value home, but declare very little income
- A taxpayer holds substantial unreported assets through offshore corporations, which provides cash flow to the taxpayer
- A Canadian taxpayer owns properties in a foreign country that they earned rental income from but do not report that income to the CRA
- A Canadian taxpayer has offshore assets but does not report income earned on the assets to the CRA
- A Canadian company overstates its expenses by asking a foreign supplier to inflate invoices for services rendered. The supplier takes a small fee for this service and transfers the difference to an offshore bank account for the Canadian company
- A Canadian company offers customers considerable discounts if they pay part of the invoice in cash. The company then moves the unreported business income offshore
This list is not exhaustive. Other situations and arrangements involving international tax non-compliance may fall within the scope of the CRA's program. If you are unsure whether the information you have qualifies, you can anonymously call 1-855-345-9042 (North America) or 613-221-3135 (collect calls will be accepted), weekdays (excluding holidays) from 8:15 a.m. to 4:45 p.m. EST for guidance.
By reporting on suspected international tax non-compliance, informants are not only benefiting from the possible rewards, but contributing to the administration of a fair tax system where everyone pays their fair share. This ensures greater resources are available for public facilities such as schools, roads and hospitals; as well as for the delivery of services and programs to Canadians.
If you want to report on other forms of tax non-compliance that take place in Canada, go to Report a lead on suspected tax cheating in Canada.
If you wish to voluntarily correct your tax filings before the CRA launches any compliance action, you should consider the CRA's Voluntary Disclosures Program.
Keeping an informant's identity confidential
Confidentiality is essential to the success of the CRA's reward program, so the CRA goes to great lengths to protect an informant's identity from being disclosed. The CRA has strict policies and procedures in place for handling informant information and will protect the identity of an informant to the fullest extent possible as required by the law.
There are some circumstances, such as when the informant is required as an essential witness in a court proceeding, where it may not be possible to proceed without revealing the informant's identity. In these rare situations, the CRA will notify the informant before it considers whether to proceed.
Confidentiality of taxpayer information
The information you provide is collected under the authority of federal tax laws, and it is protected under the confidentiality provisions of those laws, as well as by privacy laws that impose strict limits on what the CRA can disclose. The CRA may use the information you provide to make sure taxpayers meet their tax obligations.
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