Principal Issues: [Tax Interpretations translation] (a) Has the CRA seen a decrease in the number of voluntary disclosures involving the repatriation of funds from abroad since the elimination of the "38% rule"? (b) Does the CRA intend to implement a new approach to the repatriation of funds from abroad under the voluntary disclosure program?
Position: (a) No, the number of disclosures received regarding foreign source income is increasing. (b) The CRA has no new information to provide regarding the voluntary disclosure program.
FEDERAL TAX ROUNDTABLE
APFF CONFERENCE 2010
Question 52
Voluntary disclosure
It was the CRA's administrative practice under the voluntary disclosure program to allow a taxpayer to repatriate money from outside Canada and to apply an overall tax rate of 38% to those amounts. Effective January 1, 2010, that practice is no longer in effect for disclosure files opened after December 31, 2009.
Questions to the CRA
(a) Has the CRA seen a decrease in the number of voluntary disclosures involving the repatriation of funds from abroad since the "38% rule" was abolished?
(b) Does the CRA intend to implement a new approach to the repatriation of funds from abroad under the voluntary disclosure program?
CRA Response to Question 52(a)
In December 2008, CRA - Quebec Region changed its approach in accordance with national policy. In terms of program intake, we continue to see an increase in the number of disclosures received regarding foreign-source income. For example, in the first quarter of this fiscal year, we received the highest number of disclosures since April 2007.
CRA Response to Question 52(b)
At this time, the CRA has no new information to provide regarding the voluntary disclosure program, but we will inform the public and the media if there are any announcements to make regarding the program.
Response prepared by
Kristy M. Nguyen
Income Tax Section - Group 1
Technical Applications and Evaluation Division
Professional Services Audit Directorate
Compliance Programs Branch
Income Tax Rulings Directorate officer responsible:
Guy Goulet
(613) 946-3499
October 8, 2010
2010-037372.