Davidow & Nelson Blog

The World is Shrinking: CRA STRATEGIES ON OFFSHORE TAX EVASION

A recent article reported that CRA is reviewing every electronic fund transfer over $10,000 from Canada to four foreign jurisdictions per year. The first two targets were the Isle of Man and the Island of Guernsey, with two more undisclosed jurisdictions to be reviewed by March 31, 2017. CRA has started audits of 166 high-risk… Read more »

Not so Fast:OBJECTIONS

When filing an objection to a CRA reassessment, one of the most frequently-posed questions is “How long will it take?”. The answer, according to the Auditor General, is “too long”.On November 29, 2016, the Auditor General released a report to Parliament focusing on the effectiveness and timeliness of the objection process.Length of Process For the… Read more »

Tax Consequence: PAYROLL ADVANCES

In an April 26, 2016 Technical Interpretation, CRA opined that where an employer provides a payroll advance to an employee, the amount is not generally considered to be a loan. A salary advance is a payment for salary, wages or commissions that an employee is expected to earn in the performance of future services. These amounts are generally included… Read more »

Financial Hardship: TAXPAYER RELIEF

CRA may grant relief from penalties and interest in cases where the timely satisfaction of a tax obligation was not completed due to: extraordinary circumstances; actions of the CRA; or inability to pay or financial hardship. In a March 31, 2016 Federal Court Judicial Review, the taxpayer appealed a decision by CRA to refuse relief on penalties… Read more »

A Taxable Benefit? MEAL REIMBURSEMENTS

In a June 10, 2016 French Technical Interpretation, CRA commented on whether an employer had conferred a benefit to an employee where the employee was reimbursed for their meal expenses.Generally, an employee must include the value of any benefits received or enjoyed in their taxable income. CRA normally considers a taxable benefit to be conferred when: the benefit provides an economic advantage to the… Read more »

Requirements for Deduction: EMPLOYMENT EXPENSES

In a May 26, 2016 Technical Interpretation, CRA summarized the conditions that must be met in order for an individual that earns employment income to deduct employment expenses. Deductible expenses are limited to only a select group described in the Income Tax Act.Generally, an employee may deduct costs of employment related expenses if: under the contract of employment, the employee… Read more »

some quick points to consider… TAX TICKLERS

A review of the Income Tax Act is to be completed by June 30, 2017. The Federal Government has noted it plans to implement initiatives aimed at simplifying the system. Does your corporation make sales to other corporations in which you or another relative has an interest? If so, your access to small business tax rate… Read more »

DOCUMENTS REQUIRED TO CLAIM A U.S. FOREIGN TAX CREDIT:

Prior to the summer of 2015, CRA often accepted copies of the U.S. tax returns, as support to claim a U.S. Foreign Tax Credit (FTC). The “Federal Account Transcript” was selected as alternative evidence the return provided to CRA was filed and assessed as filed. Some practitioners report that obtaining “transcripts” from the Federal Government,… Read more »

Distribution of Funds: REGISTERED EDUCATION SAVINGS PLAN (RESP)

Amounts paid out of an RESP may be taxable, non-taxable, or may trigger a repayment of Government support. The taxation status of a receipt depends on whether it is considered an Educational Assistance Payment, a Refund of Contributions, or an Accumulated Income Payment. Educational Assistance Payment (EAP) – An EAP is a taxable amount paid… Read more »

Ineligible Individuals Can Get Your Organization De-Registered: CHARITIES

CRA holds the authority to suspend receipting privileges and refuse or revoke the registration of a registered charitable organization when an “ineligible individual is a board member or controls or manages the organization”. On March 17, 2016 CRA Guide CG-024, Ineligible Individuals, was updated. It provides 29 pages of description and implications of having ineligible… Read more »