Have you or someone you know recently moved to Canada?
With tax season starting up, the Canada Revenue Agency (CRA) is warning of a tax scheme that targets newcomers to Canada.
This scheme advises newcomers of which benefit and credit payments they may claim for periods of time before they arrived in Canada.
The CRA is advising newcomers to be cautious, as promoters offering tax schemes could include tax representatives, tax preparers, or consultants.
Here's what you need to know to protect yourself:
Understanding Tax Schemes
Tax schemes are essentially strategies or plans that violate Canadian tax laws. Those who promote these schemes—often called "promoters"—tempt individuals with promises of tax reductions or access to benefit and credit payments they aren't entitled to.
The Lowdown on Benefit Schemes
Newcomers to Canada are eligible to apply for benefit and credit payments to assist with living expenses. These could include the GST/HST credit, Canada workers benefit (CWB), Canada child benefit (CCB), and more, depending on your situation and residency status.
However, some promoters falsely claim that newcomers can access these benefits for periods before their arrival in Canada. This is incorrect. Benefit and credit payments can only be claimed for periods after arriving in the country, according to specific eligibility criteria.
Potential Consequences
Participating in these schemes can have serious repercussions. If you receive payments you're not entitled to, you'll be required to repay the money. Moreover, you could face penalties, fines, or legal action. The same applies to those promoting these schemes.
Protecting Yourself
To safeguard against these schemes, seek advice from a reputable tax professional. Additionally, familiarize yourself with the benefits and credits available to newcomers. If you suspect tax evasion, report it to the CRA. Remember, it's crucial to ensure your tax return is accurate and supported by proper documentation, even if someone else prepares it for you.
Navigating tax laws as a newcomer can be daunting, but falling victim to fraudulent schemes will only worsen the situation. Stay informed, seek assistance when needed, and always approach tax matters with caution.
