Every year, businesses, the self-employed and all Quebecers must declare their income to the provincial and federal governments.
However, not everyone respects these tax obligations, which greatly reduces the total amount of public contributions collected by the government. As such, some people or businesses use illegal processes to circumvent the law and reduce or eliminate their contributions. For others, it might be a case of oversight or poorly filed tax documents.
Whatever the reason, the Quebec government is putting increased effort into fighting tax evasion. This results in increasingly sophisticated regulations and penalties that can be significant for the taxpayer. But what are the consequences of tax evasion for offenders as well as for Quebec society as a whole?
The consequences of tax fraud in Quebec
Unlike tax optimization, which aims to reduce the amount of taxation through legal means, tax evasion results in a concealment, intentional or otherwise, of information in order to evade or reduce the amount due to the relevant tax bodies.
When an individual or company is accused of such an offence, criminal and administrative sanctions can have serious consequences. A detailed tax audit is then carried out to ensure that the amount reported to the government revenue agencies matches the amount of tax. If screening officers find irregularities in tax returns or the compliance of tax documents, sanctions can range from simple mediation to indictment for financial crime. The judicial process can therefore be time-consuming for the accused. In the case where the fraudster is convicted, he or she risks paying twice the amount that he or she tried to withhold from the government and being sentenced to time in prison.
The consequences of tax fraud for Quebec society
Tax evasion also has a big impact on Quebec society. In fact, the government, citizens and companies are all affected by fraudulent declarations.
First, citizens who have the habit of properly declaring their statements find themselves paying more taxes to make up for the deficit caused by those who practice fraud. In addition, the government loses large revenues, which has the effect of increasing its level of debt, thus limiting its ability to provide more useful public services to society.
As far as businesses are concerned, non-compliance with corporate tax can lead to unfair competition for those who are honest about their tax returns. Essentially, companies with these types of practices can afford to offer their services and products at lower costs, which is more difficult for companies in good standing.
What should you do if accused of tax evasion?
If you are accused of tax fraud, it is important to be well-protected and assert your rights. Hiring a qualified lawyer who can guide you through the laws which govern taxation is recommended, since they can provide a defence for your specific situation.
Do not hesitate to contact the DUI Montreal Lawyer law firm. Our lawyers that specialize in financial crime can represent you effectively with personalized support throughout the judicial process.