How Does CRA Know I have Foreign Properties
                     How Does CRA Know I have Foreign Properties?
https://www.maroofhs.com/
When paying your taxes annually, you need to include all of your 
foreign income on your return – including details of your foreign 
properties. And this goes to any taxpayer who is required to pay 
taxes in Canada - whether you reside in the country or are a 
Canadian resident who lives abroad. But how exactly does the 
Canada Revenue Agency (CRA) know about your foreign properties? 
Let us find out.
T1135 Form and its Significance
If you live in Canada, your income from all sources is subject 
to tax.
There are severe penalties for failing to disclose your worldwide 
income in Canada accurately. The country's voluntary tax system 
depends on individuals accurately and honestly declaring their 
income and paying their income taxes.
It's why criminal sanctions may occasionally be part of the 
penalties.
If you own foreign property with a value of more than $100,000, you 
are required to submit a Form T1135 Form once a year. This is done 
to ensure that all Canadian residents accurately report their 
worldwide income. These include cash/assets kept in foreign bank 
accounts, stocks, real estate located outside of Canada, and similar 
investments.
How Does CRA Know I have Foreign Properties?
Here is how the CRA knows about your offshore assets:
• To increase access to information about Canadian taxpayers who 
are located abroad and to increase its capacity to collect tax, fines, 
and interest, Canada is negotiating new Tax Treaties and Tax 
Information Exchange Agreements ("TIEA"). Currently, the CRA can 
use the authority granted to it by Canada's 92 treaties and 22 TIEAs 
to gather data on Canadians' overseas assets and offshore bank 
accounts.
• The Offshore Compliance Division created by the CRA is charged 
with identifying tax evasion and non-compliance with offshore tax 
laws. To facilitate this the staff are provided training in data analysis.
• Canadian banks started disclosing information about international 
electronic funds transfers ("EFT") of $10,000 or more to the CRA in 
2015.
• The CRA has started sending "educational letters" to "remind 
chosen taxpayers" of the necessity of filing Form T1135. The CRA 
also reminds them of the severe penalties related thereto through its 
Office Audit Letter Campaign. The CRA Office Audit Letter Campaign 
notifies a select group of taxpayers that, for each year the taxpayer 
failed to complete a Form T1135 Foreign Income Verification 
Statement, the CRA may levy a penalty equal to the greater of 
$24,000 or 5% of the cost or fair market value of the property. The 
CRA may also levy additional civil fines and file criminal tax evasion 
charges.
The CRA has been getting better at discovering hidden cashflow and 
properties – and with new treaties and digitalization, information is 
more readily available. More information visit www.maroofhs.com
You can reach us at:
3-100 Hanlan Road, Woodbridge, ON L4L 4V8
Phone: (647)724-4308
Email: [email protected]
https://www.maroofhs.com/contact/
https://twitter.com/MaroofHS
https://www.facebook.com/MaroofHSCPA