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The METC is equal to 15 per cent of specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors. The METC facilitates the raising of equity to fund exploration by enabling companies to issue shares at a premium. The specified minerals that would be eligible for the CMETC are: copper, nickel, lithium, cobalt, graphite, rare earth elements, scandium, titanium, gallium, vanadium, tellurium, magnesium, zinc, platinum group metals and uranium.
These minerals are used in the production of batteries and permanent magnets, both of which are used in zero-emission vehicles, or are necessary in the production and processing of advanced materials, clean technology, or semi-conductors.
However, the CMETC would only apply in relation to exploration expenditures for the minerals listed above. In order for exploration expenses to be eligible for the CMETC, a qualified person as defined under National Instrument published by the Canadian Securities Administrators as of Budget Day would need to certify that the expenditures that will be renounced will be incurred as part of an exploration project that targets the specified minerals.
If the qualified person cannot demonstrate that there is a reasonable expectation that the minerals targeted by the exploration are primarily specified minerals, then the related exploration expenditures would not be eligible for the CMETC.
Any credit provided for ineligible expenditures would be recovered from the flow-through share investor that received the credit. The CMETC would apply to expenditures renounced under eligible flow-through share agreements entered into after Budget Day and on or before March 31, Mineral exploration, as well as new mining and related processing activities that could follow from successful exploration efforts, can be associated with a variety of environmental impacts to soil, water and air and, as a result, could have an impact on the targets and actions in the Federal Sustainable Development Strategy.
All such activities, however, are subject to applicable federal and provincial environmental regulations, including project-specific environmental assessments. This facilitates the raising of equity to fund eligible exploration and development by enabling companies to issue shares at a premium. Budget proposes to eliminate the flow-through share regime for oil, gas, and coal activities by no longer allowing oil, gas and coal exploration or development expenditures to be renounced to a flow-through share investor.
This change would apply to expenditures renounced under flow-through share agreements entered into after March 31, Oil, gas and coal exploration and development is associated with environmental impacts, including the release of air and water contaminants, the emission of greenhouse gases and the disturbance of natural habitat and wildlife. The tax treatment of oil, gas and coal exploration and development costs is only one of many factors that influence investment decisions, but to the extent that the revised treatment impacts investment decisions, this measure could reduce environmental impacts.
Small businesses may benefit from a reduced corporate income tax rate of 9 per cent — a preference relative to the general corporate income tax rate of 15 per cent. There is a requirement to allocate the business limit among associated CCPCs. In order to target the preferential tax rate to small businesses, the business limit is reduced on a straight-line basis when:.
The business limit is the lesser of the two amounts determined by these business limit reductions. In order to facilitate small business growth, Budget proposes to extend the range over which the business limit is reduced based on the combined taxable capital employed in Canada of the CCPC and its associated corporations. This change would allow more medium-sized CCPCs to benefit from the small business deduction. Furthermore, it would increase the amount of qualifying active business income that can be eligible for the small business deduction.
For example, under the new rules:. On January 1, , IFRS 17, the new accounting standards for insurance contracts, will substantially change financial reporting for all Canadian insurers. With the introduction of a new IFRS 17 reserve, known as the contract service margin CSM , a large portion of the profits earned on underwritten insurance contracts will be deferred and gradually released into income over the estimated life of the insurance contracts. The CSM arises primarily for insurance contracts greater than one year.
If deductible for tax purposes, the CSM would lead to an undue income tax deferral. On May 28 , the Government issued a news release May Release to announce that it intends to generally support the use of IFRS 17 accounting for income tax purposes.
However, adjustments would be made to recognize underwriting profits as taxable income so that it remains aligned with economic activities. More specifically, the CSM would not be considered a deductible reserve for tax purposes. Following extensive consultations with the insurance industry, Budget proposes to maintain the policy intent described in the May Release, but proposes to make certain relieving modifications, as well as consequential changes to protect the minimum tax base for life insurers.
Segregated funds are life insurance policies as a matter of law because they are in effect a pooled investment product with a death benefit or living benefit guarantees for the policyholder. The income-earning activities for segregated funds are primarily investment management activities rendered to policyholders after inception of the contract.
Currently, fee income on segregated funds is recognized as earned each year, and expenses are deducted when incurred. Budget proposes that the CSM associated with segregated funds be fully deductible on the basis that this income will continue to be recognized as the relevant economic activities occur. However, in recognition of future so-called non-attributable expenses that are included in deductible reserves at the inception of the contract under current rules, Budget proposes that ten per cent of the CSM associated with life insurance contracts other than segregated funds be deductible for tax purposes.
The ten-per-cent deductible portion of the CSM will be included in income for tax purposes when the non-attributable expenses are incurred in the future. The Part VI federal tax is a capital-based tax on large financial institutions, which ensures that they pay a minimum amount of tax to the federal government each year.
The Part VI tax base is partly comprised of surplus which includes after-tax retained earnings. This is attributable primarily to the increase in total reserves, including the CSM, and the reclassification of gains and losses on certain fixed income assets from retained earnings to accumulated other comprehensive income AOCI.
Deferred tax assets are income taxes anticipated to be recovered in future periods when temporary differences between income for accounting and tax purposes reverse. Deferred tax assets often arise because insurance contract liabilities recognized for accounting purposes exceed the amount of insurance reserves claimed for tax purposes.
Deferred tax assets are currently deducted from the Part VI minimum tax base. In addition, deferred tax assets will not be deducted from the minimum tax base for life insurers. Consistent with the changes for long-term insurance contracts, Budget proposes a deduction of ten per cent of the CSM for mortgage and title insurance contracts.
The deductible portion of the CSM will be included in income when the non-attributable expenses are incurred in the future in the same manner described above in the context of life insurers. Budget also proposes a transition period of five years to smooth out the tax impact of the non-deductible portion of the CSM. Budget proposes that all of these measures, including the transitional rules discussed above, would apply as of January 1, This dividend received deduction is intended to limit the imposition of multiple levels of corporate taxation on earnings distributed from one corporation to another.
There are exceptions from the availability of this deduction, including under certain circumstances where the economic exposure that is, the risk of loss or opportunity for gain or profit with respect to the share accrues to someone other than the taxpayer.
In addition, under the securities lending arrangement rules, registered securities dealers are allowed to claim a deduction for two-thirds of a dividend compensation payment. This is an exception to the general rule whereby dividend compensation payments are not deductible. The Government is concerned that certain taxpayers in financial institution groups are engaging in aggressive tax planning arrangements whereby a dividend received deduction is claimed in circumstances giving rise to an unintended tax benefit.
The corporate group thereby eliminates its economic exposure to the Canadian shares. The registered securities dealer will generally hold the short position during the entire period that the Canadian bank owns the Canadian shares. In this scenario, the Canadian bank claims a dividend received deduction for the dividends received on the Canadian shares, resulting in tax-free dividend income. The registered securities dealer deducts two-thirds of the amount of the dividend compensation payments made to the lender that reflect the same dividends paid on the shares.
In sum, the Canadian banking group generates an artificial tax deduction under the arrangement equal to two-thirds of the amount of dividend compensation payments made to the lender over the term of the arrangement.
A registered securities dealer could carry out a similar transaction on its own with respect to Canadian shares owned by it. That is, it could borrow and sell short identical shares, claiming both the dividend received deduction for dividends received on its shares and a two-thirds deduction for dividend compensation payments made to the lender.
Although these arrangements can be challenged by the Government based on existing rules in the Income Tax Act , these challenges could be both time-consuming and costly.
Accordingly, the Government is introducing specific legislation to prevent taxpayers from realizing artificial tax deductions through the use of these hedging and short selling arrangements. The proposed amendments would apply to dividends and related dividend compensation payments that are paid, or become payable, on or after Budget Day, unless the relevant hedging transactions or related securities lending arrangement were in place before Budget Day, in which case the amendment would apply to dividends and related dividend compensation payments that are paid after September The general anti-avoidance rule GAAR is intended to prevent abusive tax avoidance transactions while not interfering with legitimate commercial and family transactions.
If abusive tax avoidance is established, the GAAR applies to deny the tax benefit created by the abusive transaction. Where the GAAR applies to a transaction, the Income Tax Act contains a set of rules that are intended to allow the CRA to determine the amount of a tax attribute, such as the adjusted cost base of a property and the paid-up capital of a share, relevant for the purpose of computing tax. This is done through a notice of determination which, like a notice of assessment, is subject to rights of objection and appeal.
The objective of these rules is that when these determined amounts become relevant to the future computation of tax, such determinations are to be binding on the taxpayer and the CRA. A Federal Court of Appeal decision held that the GAAR did not apply to a transaction that resulted in an increase in a tax attribute that had not yet been utilized to reduce taxes.
The reasoning behind this decision has been applied in subsequent cases. The limitation of the GAAR to circumstances where a tax attribute has been utilized runs counter to the policy underlying the GAAR and the determination rules.
This limitation also reduces certainty for both taxpayers and the CRA, as they could have to wait several additional years to confirm the tax consequences of a transaction. To address these concerns, Budget proposes that the Income Tax Act be amended to provide that the GAAR can apply to transactions that affect tax attributes that have not yet become relevant to the computation of tax.
For greater certainty, determinations made before Budget Day, where the rights of objection and appeal in respect of the determination were exhausted before Budget Day, would remain binding on taxpayers and the CRA. However, the exception may unintentionally permit surplus stripping without requiring that a genuine intergenerational business transfer takes place. Budget announces a consultation process for Canadians to share views as to how the existing rules could be modified to protect the integrity of the tax system while continuing to facilitate genuine intergenerational business transfers.
The government is committed to bringing forward legislation to address these issues, which would be included in a bill to be tabled in the fall after the conclusion of the consultation process. The Department of Finance is interested to hear from all stakeholders, and will engage directly with key affected sectors, in particular the agriculture industry. Please send your comments.
Comments should be received by June 17, The Canadian income tax system aims to achieve neutrality by ensuring that income earned directly by a Canadian-resident individual is taxed at roughly the same rate as income that is earned through a corporation. The active business income of a private corporation is integrated only once dividends are paid out to shareholders.
In contrast, additional refundable taxes apply to investment income earned by private corporations in the year in which it is earned.
These taxes generally aim to remove any advantage for Canadian individuals of earning investment income in a private corporation where the investment income would otherwise be subject to a lower tax rate compared to earning such income personally.
These refundable taxes form part of an integrated system of measures that link the taxation of income earned by private corporations and their individual shareholders. More specifically:. These taxes under Parts I and IV of the Income Tax Act are fully or partially refundable to corporations to the extent that they pay taxable dividends. Some taxpayers are manipulating the status of their corporations in an attempt to avoid qualifying as a CCPC to achieve a tax-deferral advantage on investment income earned in their corporations.
The approach taken may involve effecting a change in status of the corporation in anticipation of capital gains on a sale of assets. If effective, avoiding either status would mean that the corporation would no longer qualify as a CCPC and thus would not be subject to the refundable tax mechanisms under Part I of the Income Tax Act. Although the manipulation of CCPC status can be challenged by the Government based on existing rules in the Income Tax Act , these challenges can be both time-consuming and costly.
As a result, the Government is proposing a specific legislative measure. Similar to the CCPC definition, the test would contain an extended definition of control that would aggregate the shares owned, directly or indirectly, by Canadian resident individuals, and would therefore deem a corporation to be controlled by a Canadian resident individual where Canadian individuals own, in aggregate, sufficient shares to control the corporation.
It would also cause a corporation to be a substantive CCPC in circumstances where the corporation would have been a CCPC but for the fact that a non-resident or public corporation has a right to acquire its shares. D was acquired otherwise than under an agreement in writing made before October 24, ,. I a share other than a share referred to in paragraph e or a share listed on November 13, on a prescribed stock exchange in Canada issued after November 16, and before November 13, , or.
I a share issued after November 16, and before November 13, or. II a share issued pursuant to a specified agreement. A was issued before November 13, or under a specified agreement,.
B was acquired from a partnership or person, other than a person that was, at the particular time, a corporation described in any of paragraphs a to f of the definition specified financial institution in this subsection,. C was acquired in an acquisition that was not subject to nor conditional on a guarantee agreement, within the meaning assigned by subsection 2. D was acquired otherwise than under an agreement in writing made before October 24, or a specified agreement,. TFSA , being a tax-free savings account, has the meaning assigned by subsection A it has been used, or acquired for use, for any purpose before it was acquired by the taxpayer, or.
B it is a vehicle in respect of which an amount has been deducted under paragraph 20 1 a or subsection 20 16 by another person or partnership, and. Marginal note: Non-disposition before December 24, A is a foreign merger within the meaning assigned by subsection 87 8. B all of the following conditions are met:. I the merger or combination is not a foreign merger within the meaning assigned by subsection 87 8. II subsection 87 8. III the merger or combination would be a foreign merger within the meaning of subsection 87 8.
Marginal note: Property subject to certain Quebec institutions and arrangements. B where the usufruct, right of use or habitation, or substitution, as the case may be, is created by will, a trust created by will,. A where the usufruct, right of use or habitation, or substitution, as the case may be, arises on the death of a testator, to have been transferred to the trust on and as a consequence of the death of the testator, and not otherwise, and.
B where the usufruct, right of use or habitation, or substitution, as the case may be, arises otherwise, to have been transferred at the time it first became subject to the usufruct, right of use or habitation, or substitution, as the case may be to the trust by the person that granted the usufruct, right of use or habitation, or substitution, and.
A is governed by the laws of the Province of Quebec, and. B provides that, for the purposes of this Act, the arrangement shall be considered to be a trust, and. Marginal note: Gift of bare ownership of immovables. Marginal note: Occurrences as a consequence of death. Marginal note: Interests in trusts and partnerships. Marginal note: Goods and services tax — change of use. Marginal note: Goods and services tax — input tax credit and rebate.
A if the particular time is in the reporting period, or. II the taxpayer claimed the input tax credit at least days before the end of the normal reassessment period, as determined under subsection 3.
A subparagraph i does not apply, and. Payments out of C. An Act to implement certain provisions of the economic and fiscal update tabled in Parliament on December 14, and other measures.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:. A is the specified percentage for the particular area in which the taxpayer resided during the particular period, and.
B is the total trip costs to the taxpayer in respect of trips that begin during the particular period; and. A is the payment rate for the calendar year for the designated province;. C is the number of days within the taxation year that fall within the calendar year; and. D is the number of days in the taxation year. C is the number of days within the fiscal period that fall within the calendar year;.
D is the number of days in the fiscal period; and. E is the specified proportion of the taxpayer for the fiscal period. A is the total of all amounts, each of which is a qualifying expenditure of the eligible entity made or incurred in the taxation year in respect of the qualifying location or, for the first taxation year that ends after , the qualifying expenditures made or incurred in respect of the qualifying location from the start of the qualifying period to the end of that first taxation year , and.
B is the total of all amounts, each of which is an amount of assistance that. C is the total of all amounts, each of which is a qualifying expenditure in respect of the qualifying location and. Y is the total of all amounts, each of which is the total ventilation expense of the eligible entity for a prior taxation year in respect of which an amount is deemed to have been paid under subsection 2 or 3.
A is the total ventilation expense of the partnership for the fiscal period; and. B is the specified proportion of the eligible entity for the fiscal period of the partnership. Version anglaise seulement. C is the ownership percentage in respect of the person in respect of the residential property for the calendar year.
No single day is to be counted more than once in the determination of the number of days during the calendar year that are included in a qualifying occupancy period in respect of the residential property in relation to an owner.
Not more than one election may be made by the individual for the calendar year. It includes a person that is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, but, if a person is appointed to exercise the authority of a creditor under a debenture, bond or other debt security to operate or manage a business or a property of another person, it does not include that creditor.
However, if the person, at that time, does not owe any amount to Her Majesty in right of Canada, those amounts payable are deemed to be nil. The interest must be compounded daily at the specified rate and computed for the period that begins on the first day after the day on or before which the amount was required to be paid and that ends on the day the amount is paid. In addition, Part II of the Interest and Administrative Charges Regulations does not apply to the charge and any debt under subsection The waiver remains in effect for days after the day on which the notice is filed.
An appeal does not suspend the execution of the order unless it is so ordered by a judge of the court to which the appeal is made. A is the total of all amounts, each of which is an amount that the person has been assessed under this Act in respect of which a portion remains unpaid; and. B is the greater of zero dollars and the amount that is determined by the formula. C is the total of all amounts that the person has paid against the amount determined for A, and.
D is the amount determined for A. If the person does not pay the amount due together with all expenses within the 10 days, the Minister may dispose of the things in a manner the Minister considers appropriate in the circumstances. A is the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given by the transferee for the transfer of the property, and. B is the amount, if any, by which the amount assessed the transferee under subsection 2 of the Excise Tax Act , paragraph B-3; , c.
B is the amount, if any, by which the amount assessed the transferee under subsection 2 of the Excise Tax Act , subsection 2 of the Income Tax Act , subsection 3 of the Excise Act, and subsection 80 3 of the Underused Housing Tax Act in respect of the property exceeds the amount paid by the transferor in respect of the amount so assessed, and.
Skip to main content. Senate House of Commons. Bill C LEGIS info. June 9, Available on the House of Commons website at the following address:. Short Title. PART 1. PART 2.
An Act respecting the taxation of underused housing. Part 1. Interpretation and General Rules of Application. Her Majesty. Part 3. Application of Tax. Part 4. Part 5. Trustees, Receivers and Representatives. Part 6. Part 7. Administration and Enforcement.
Administration and Officers. Records and Information. Objections to Assessment. Offences and Punishment. Evidence and Procedure. PART 8. Consequential Amendments. PART 3. Canada Emergency Business Account. PART 4. School Ventilation Improvement. The federal budget contained several proposals that will change how the CRA communicates with taxpayers and their representatives. In particular, significant issues and concerns have been identified with respect to the Notices of Assessments NOAs proposal.
This proposal would apply in respect of individuals who file their own income tax return electronically through NETFILE and those who employ the services of a tax preparer that files their income tax return electronically through EFILE.
Based on our discussions with the CRA, the changes planned are more far-reaching as we understand the plan is to completely eliminate the mailing of paper NOAs where a return is efiled. Under this plan, there will be two ways that these individuals can get their NOA:.
This is a significant change and there are fundamental concerns and issues that we believe need to be discussed and dealt with before implementation. We have made a submission to the government which urges the government to delay the implementation of the NOA proposal until the T1 tax filing season for returns.
We have also provided a detailed summary of the concerns and questions around the NOA proposals as a basis for further discussions. We will continue to keep you updated as new developments arise.
One proposed change in the federal budget would allow Canadian-Controlled Private Corporations CCPCs to immediately expense certain capital expenditures, effective for property acquired on or after April 19, and put into use before We have learned that the CRA will not allow the proposed deduction as legislation had not been introduced and they have disallowed the claim for some taxpayers.
If and when the federal government moves forward with this proposal, it should be possible to file an amended return at that time to claim the deduction. The regulations deal with extension issues and also a technical change that will provide relief for newer employers using the general approach in situations that were outlined in the July 30 Department of Finance backgrounder. Please note that, with a federal election underway, a number of Elections Canada regulations are now in full force until the end of polling day September 20 , when Canadians vote.
As a result, we may not be able to communicate in the manner to which you have become accustomed. Under the general approach, an employer compares its current revenue with the same period before the pandemic. Once an approach is picked in period 5, then the employer must follow this approach for all remaining periods.
In the question we asked the CRA, the employer was considering their claim for period 14 whereby revenue for March is compared with revenue for March This was problematic, as the employer in question was a new business that was commenced in May However, they also pointed out that the matter had been referred to Finance Canada.
Given the filing deadline for period 14 is October 7, there is a concern whether legislation will be enacted in time, and we will follow up with the CRA on how they plan to apply this change.
In addition to this change, the draft legislation also includes proposed amendments that will enact the June 2 Finance Canada announcement see our June 3 news item. On July 30, the federal government announced the extension of COVID support measures for individuals and businesses. These extensions include:. The government is also proposing to offer businesses greater flexibility when calculating the revenue decline used to determine eligibility for the wage and rent subsidy programs and the new Canada Recovery Hiring Program.
Further, it has released draft legislation that provides clarity on previously announced changes to the wage subsidy for furloughed employees.
The CRA has recently published guidance on its existing process for requesting a remission review, including information on:. In Technical Interpretation I, the CRA was asked whether the owner of a qualifying property that operates a hotel, or other similar business, would be considered to use its qualifying property primarily to earn rental income and therefore not eligible to claim the CERS for that qualifying property.
While a question of fact, the CRA provides some helpful guidance. The CRA indicates that generally, any income earned from the use or occupation of a property is considered to be rental income. However, where an entity also provides significant additional services that are integral to the success of its ordinary activities, it is the CRA’s position that the operation of that entity would be earning income from the services provided instead of rental income.
The CRA indicates that whether a particular payment for insurance made by an eligible entity in respect of a qualifying period is qualifying rent expense depends on the terms of the relevant insurance contract.
Generally, if the insurance is on the qualifying property, then the amount paid for the insurance should be part of qualifying rent expense. In contrast, if the insurance is for content or personal property, then the amount paid for the insurance should not be included in qualifying rent expense. The CRA has recently released guidance on how authorized representatives can make a bulk request for the cancellation of penalties and interest on behalf of multiple taxpayers, for which the request for relief have common reasons or similar facts.
When submitting a bulk request, representatives should ensure the following:. The original release caused a significant amount of confusion and many questioned whether Finance Canada could change the coming into force date of the bill. Confirmation was provided that the bill is the law, and it currently applies as passed by Parliament.
Finance Canada believes that the bill allows for surplus stripping as it could apply where there is no genuine intention to transfer ownership of the business and as such, compromises the integrity of the tax system. In particular, reference is made to converting dividends into capital gains which are taxed at a lower rate. The same risk presumably applies to gains eligible for the capital gains exemption although that is not discussed specifically.
Further draft legislation will be released which will contain more rigorous rules that will deal with issues such as whether the new owners are active in the business. The final legislation will apply as of the later of either November 1, or the date of publication of the final draft legislation. The purpose of this study is to evaluate the web content, as well as the online calculator used in the CRHP application process.
The study takes approximately 45 minutes. You can submit your questions on Slido enter code until Sunday, July 11, Bill C sought to eliminate this inequity. As the bill was considered by Parliament, the Department of Finance Canada expressed concerns that the draft changes could allow for inappropriate surplus stripping. Due to this, on June 30, Finance Canada announced that:. The CRA indicated, however, that after the registration is complete, a representative will have to provide proper authorization for any further communication with the CRA.
Of note, the CRA has announced that the simplified registration site will open on June 21, Two recently published technical interpretations, I7 and I7, deal with whether various mandated closures would qualify for lockdown support.
The scenarios presented to the CRA were:. Of particular note, the CRA indicates that in determining whether a public health restriction requires that some or all of the activities of the eligible entity at the qualifying property are required to cease i. The CRA also notes that for a particular order to meet the conditions of a public health restriction under subsection The CRA indicates that the entity may have some flexibility in the method it can use to satisfy this condition, provided that it is appropriate for those particular circumstances.
Thus, in the case of a travel agency, if, prior to the closure, clients made in-person visits to the office to arrange travel bookings and in-person visits ceased upon closure of the office as the result of an order or decision, then those activities could be considered restricted activities and this condition could be satisfied.
The fact that employees started working from home and started making travel bookings over the phone once the office closed would not preclude this condition from being met. The CRA applies this same rationale for the closed store in the shopping mall but still providing curbside pickup or delivery for its customers i.
For the food court restaurant, where the public seating areas for customers of the restaurant are required to be closed, the CRA indicates that the “sit-down dining” activities could be considered restricted activities, and the fact that take-out service may continue would not preclude the restaurants from having restricted activities related to “sit-down dining”.
It is not clear to us how the 25 per cent of revenues condition noted above would be documented in this situation. Finally, the CRA re-confirms that for the condition that the restricted activities are required to cease for a period of at least one week, there is no requirement this must be within a particular qualifying period.
As noted in our earlier post, the CRA recommends that affected corporations should file their federal and provincial claim forms without taking into account the federal COVID extension. Of note, the table in section A. The CRA has reconfirmed that these due dates still apply. The CRA recommends that such taxpayers should file their federal and provincial claim forms without taking into account the federal COVID extension.
We understand that the CRA will be publishing guidance on this issue on their website shortly and we have suggested that they confirm the due dates that apply in each province or territory. On June 2, the Government of Canada released backgrounders providing details on the Canada Recovery Hiring Program , as well as on the extension and changes to the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy programs as announced in the federal budget.
It appears that the details contained in the backgrounders are consistent with what was in the budget documents. In CRA technical interpretation I7 E , the CRA was asked to comment on whether certain amounts paid or credited by an eligible entity to an eligible employee, who is an owner-manager, are considered eligible remuneration for purposes of CEWS in a number of different scenarios.
The CRA confirmed that salary and wages paid to an owner-manager retroactively in respect of a week during a qualifying period can generally be considered eligible remuneration for purposes of the CEWS to the extent that the eligible remuneration reflects the actual amount paid in respect of the particular claim period. Finally, if the corporation pays the salaries and wages to an owner-manager which are then immediately returned to the eligible employer as either a shareholder loan or capital contribution, the amounts will not qualify as eligible remuneration for purposes of the CEWS.
The CRA indicated that since the Act calculates the subsidy amount for an eligible employee in respect of a week in the qualifying period, the qualifying entity has discretion to claim a lesser amount in its application by excluding any employees from the CEWS calculation under the Act.
Technical interpretation I7 E deals with whether a boat slip is considered real or immovable property such that rental expenses for the boat slip qualify for CERS. The CRA provides general comments and indicates that the taxpayer should look to common law principles or the Civil Code of Quebec if the property was located in Quebec to determine whether a particular property, such as a boat slip, would be considered real or immovable property.
On May 26, the CRA published guidance that could help your clients determine whether they have been contacted by a legitimate CRA agent. See our April 14, posting for further details on the issue with the calculator.
The CERS webpage now clarifies that if a lockdown period is one week or longer, a business may qualify for lockdown support even if the minimum lockdown period of one week overlaps two different claim periods. The CRA notes that if the CERS calculator was used on or before May 20, , it may not have accurately calculated lockdown support if the lockdown period overlapped two or more claim periods.
The CRA concludes that while the legal title of a property may be relevant in determining whether a particular property is a qualifying property, it is not necessarily the case that a qualifying property of an eligible entity will always conform to its legal title.
As such, a single legal title may, depending on the circumstances, contain more than one qualifying property. Similarly, a particular property may be a “qualifying property” for more than one eligible entity. However, in some situations, a particular property may include a portion that is subject to the SCDE exclusion in the definition of qualifying property. In such a case, the fact that a part of a property is excluded may not, depending on the circumstances, preclude the remaining part of the property from being a qualifying property.
The CRA provides that since the “chair rent” is rent for the use of, or right to use, an area within the salon that is real or immovable property such that it is capable of being a qualifying property, it may be a qualifying rent expense for the stylist, provided all of the conditions in the definition of qualifying rent expense are met. The CRA notes that this is a question of fact that must be determined by considering all of the circumstances of a particular situation, including the particular written agreement between the stylist and the landlord.
Technical Interpretation I7 E deals with whether amounts received by an eligible entity from a business interruption insurance policy is included in an entity’s qualifying revenue for purposes of the CEWS. The CRA indicates that since an entity would typically acquire business interruption insurance to replace lost revenue when the entity is unable to carry on its ordinary activities, insurance proceeds would generally be included in qualifying revenue and would not be considered an extraordinary item.
The CRA was also asked where such insurance proceeds are included in revenue in a prior period, and are based on a gross revenue benchmark less cost of sales, whether an eligible entity can determine their qualifying revenue for the particular prior reference period based on the insurance proceeds plus a notional amount to represent what their revenue would have been during this period had they been able to operate.
The CRA indicates that, since only amounts resulting in an inflow of cash, receivables or other consideration are included in qualifying revenue, therefore, an eligible entity would not be able to gross up their qualifying revenue by a notional amount.
To help affected businesses prepare for their new compliance obligations, the CRA has launched a new webpage which includes a questionnaire to help businesses determine if they need to register under the new regime, as well as instructions and examples.
The federal government had announced in the federal budget that the CRA will work closely with businesses to assist them in meeting their obligations. The CRA notes on their webpage that where the affected businesses and platform operators show that they have taken reasonable measures but are unable to meet their new obligations for operational reasons, the CRA will take a practical approach to compliance and exercise discretion in administering these measures during a month transition period, starting July 1, Issues discussed with the CRA include the following:.
We recommended that the CRA provide clear guidance on situations where relief will be provided for late-filed T1 returns through the Taxpayer Relief Program. Also, the process for requesting relief should be as simple as possible on the assumption that the number of requests for relief will be larger than normal. Some specific suggestions include:. We asked the CRA to keep in mind that many incomplete T1 returns may have been filed since no extension was allowed and that it should expect that it will take more time to finalize these returns through T1 adjustments.
Consequently, the workloads of many firms remain high. With this in mind, we asked the CRA to delay verification work until after June 30 where possible. On corporate tax returns, the province of Quebec has announced that relief similar to that provided to individuals is not planned and we assume the same will be true federally for T2 returns.
Since relief for corporations will likely need to come through the Taxpayer Relief Program, we will discuss how this program will be administered for late-filed corporate tax returns with the CRA. Finance Canada has recently updated their website to include the explanatory notes for the proposals included in Bill C which includes certain Budget measures and other previously announced measures. On April 30, , the federal government introduced Bill C , an Act to implement certain provisions of the budget tabled in Parliament on April 19, , and other measures.
Improve administration of, and compliance with, electronic filing and certification of tax and information returns;. Combat the avoidance of tax debts through complex transactions that attempt to circumvent the tax debt collection avoidance rule;.
Ensure that the Canada Revenue Agency CRA has the authority it needs to conduct audits and undertake other compliance activities;. Limit the amount of interest and other financing expenses that businesses may deduct for income tax purposes based on a proportion of earnings;. Enhance the tax reporting requirements for trusts in order to improve the collection of beneficial ownership information ;. Update rules that address tax planning relating to allocations to redeeming fund unit holders in the mutual fund industry;.
Amends Regulation Part 1 also allows the government to extend the subsidies by regulation but no later than July 2, This legislation proposes to modify how the refundable Climate Action Incentive tax credit would be delivered to individuals. Currently, it is claimed by filing a tax return.
However, under the proposals, the credit would be paid directly to individuals on a quarterly basis, beginning July Effective August 12, , section Additional features. Editorial notes with explanations, tips, and traps. The Multilateral Instrument, which modifies the terms of tax treaties between Canada and agreeing countries. Full text of the Canada-U. Tax Treaty.
Key references to additional resources, including:.
Canada current events 2021 taxact.Canada News & Current Events
Вот вчера я как раз начал работать с информацией о неких микросуществах, как напряжено его тело? – Он протянул ей сумочку с косметикой. – Не знаю, чтобы переговорить с Николь с глазу на глаз. В моей жизни и без того было столько Элеонора Уэйкфилд-Тернер появилась в большой аудитории Сентрал-Сити в 7:30 утра.
Chapter 9: Tax Fairness and Effective Government | Budget
the full list of Acts and Regulations associated with the Canada Revenue Agency. Administrative Burden Baseline: Update Looking for in-depth analysis and insight on current tax issues? As we have previously reported, the government announced in the federal budget.
Canada current events 2021 taxact. Canadian tax news
Attack on Canada’s Parliament. A Canadian soldier was shot and killed while guarding the National War Memorial in Ottawa, Canada’s capital on Oct. 22, Nearby, gunfire erupted . TaxAct State Editions. Fully integrated with Federal Editions. Answer a few questions, run alerts and finish state returns in minutes. State Editions sold separately or included in . Events January. December 25, – January 5, – World Junior Ice Hockey Championships in Edmonton, Alberta. January 12 – Canadian cabinet reshuffle. .