CRA posts its draft Memorandum on GST/HST voluntary disclosures to its new subsite

The new draft GST/HST Memorandum on the Voluntary Disclosure Program, which would become effective after 2017, is similar to the draft Income Tax Circular which was released at the same time. For example, where there has been “major non-compliance” (determined in accordance with essentially the same vague guidelines) no interest or penalty relief will be provided other than of the gross negligence penalty. One difference is that CRA draws a distinction between “Track 1” transactions which satisfy the CRA wash-trading guidelines (generally, where a registrant with a good history failed for reasons other than negligence to charge GST/HST to a registrant who would have been entitled to a full input tax credit therefor), which are entitled to full interest relief, and other “Track 2” situations (other than of “major non-compliance” – which are “Track 3”), where only 50% interest relief is provided.

A second difference is that in an income tax voluntary disclosure, the taxpayer is required to go back for all the years in which there was deficient disclosure, whereas under a Track 1 and Track 2 GST/HST disclosure, there is only a requirement to go back 4 or 6 years, respectively.

The old CRA website (cra-arc.gc.ca) is being migrated to a subsite on the federal government website (canada.ca). Both the draft income tax circular and the draft GST/HST memorandum were posted to the latter rather than the former.

Neal Armstrong. Summary of June 2017 Draft GST/HST Memorandum 16.5 – Voluntary Disclosures Program under ETA – s. 281.1(2).