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Ottawa, November 9, 2006
2006-065

Canada’s New Government Strengthens the Income Tax System

The Honourable Jim Flaherty, Minister of Finance, today tabled a Notice of Ways and Means Motion in the House of Commons to prevent tax deferral and avoidance through the use of foreign investment funds and trusts. The Motion proposes to tighten the income tax rules, responding to concerns raised by the Auditor General.

“Our new government is committed to a tax system that is both competitive and fair,” said Minister Flaherty. “The Motion we tabled today will amend existing income tax rules to help ensure that income earned by Canadians through foreign jurisdictions, including tax havens, is subject to tax as if it had been earned in Canada.”

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Listen .. trust your HART …

If you don’t have the money to pay your income taxes, you should still make an effort to file your income tax return ON TIME. This way, it’s only a “collection issue” and you will only be subject to interest on the arrears balances owing. If you file late or after the due date (April 30th for most individuals and June 15th for self-employed individuals), you will have to pay a flat percentage penalty of the balance you owe plus a flat percentage penalty of the balance owing is added for every month you are late. If you’re not only late, but there was a request from Canada Revenue Agency to file your tax return .. generally these penalty rates are doubled!

Some guy once said “The difference between tax avoidance and tax evasion is the thickness of a prison wall.”. There are legal ways to minimize your income tax bill with planning and advice of your professional accountant or income tax preparer .. but keep in mind that there are also laws in place to prevent the avoidance of income taxes. Now, evasion - is much worse than being a deadbeat, because in addition to the penalties and interest that you will be charged (if caught) .. it’s also a criminal offense.

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