Voluntary disclosure in Quebec, particularly regarding foreign assets, allows taxpayers to regularize their tax situation with Revenu Québec without facing significant penalties. Here are the key details about voluntary disclosure with Revenu Québec in case of omissions in your tax filings.
What is Voluntary Disclosure?
Voluntary disclosure by Revenu Québec is a program that allows taxpayers to voluntarily correct omissions or errors in their tax filings. This includes undeclared income, undisclosed foreign assets, or other incorrect tax information.
Why Disclose Foreign Assets?
Quebec taxpayers, like all Canadian residents, are required to declare their worldwide income and disclose foreign assets. This includes bank accounts, real estate, shares, bonds, and other assets located outside of Canada.
Advantages of Voluntary Disclosure
First, penalties for failing to disclose foreign assets can be severe. By choosing voluntary disclosure, taxpayers can avoid these penalties.
Additionally, voluntary disclosure also protects against potential legal actions. Finally, it ensures compliance with tax obligations and prevents future issues.
What are the Eligibility Conditions?
For voluntary disclosure to be accepted by Revenu Québec, it must meet certain criteria:
- Voluntary: The disclosure must be made before Revenu Québec contacts the taxpayer regarding the undisclosed information.
- Complete: All relevant information must be provided.
- Substantial: The disclosure must involve a potential infraction that could have resulted in a penalty.
- Penalty-Eligible: The disclosure must be submitted before the taxpayer is informed of an audit or investigation.
Voluntary Disclosure Process with Revenu Québec
To correct an error in your tax filing (such as the foreign assets section), follow these steps:
- Preparation: Gather all necessary information about foreign assets, including financial documents, bank statements, property titles, etc.
- Submission: Complete the prescribed form by Revenu Québec for voluntary disclosure and attach the supporting documents.
- Review: Revenu Québec will review the submission to ensure it is complete and meets the program’s requirements.
- Decision: If the disclosure is accepted, the taxpayer can avoid penalties and legal actions.
Consequences of Non-Disclosure
Failure to disclose foreign assets can result in significant financial penalties, interest on amounts owed, and potentially legal actions. Penalties for non-disclosure of foreign assets can reach up to $5,000 per year for each undisclosed asset, in addition to applicable taxes and interest.
Impact of Automatic Information Exchange
With the implementation of the automatic exchange of information between countries, it is becoming increasingly difficult to hide assets abroad. Tax authorities now have access to more information about bank accounts and other assets held by their residents overseas.
Get Professional Assistance
Revenu Québec’s voluntary disclosure program is an important opportunity for Quebec taxpayers to comply with tax requirements and avoid severe penalties. Want to discuss your situation and receive tax advice? Consult one of our tax advisors or a specialized lawyer to navigate this process and ensure the disclosure is complete and compliant with Revenu Québec’s requirements.
