Over the past several years, several incentives permitting enhanced CCA claims in the year property first becomes available for use have been implemented. Claiming the enhanced first-year CCA provides a tax deferral by accelerating the deduction. The phase-out of these incentives will begin for assets that become available for use after December 31, 2023.
Immediate expensing property (IEP)
Many capital assets, other than those with particularly long lives (such as buildings), are eligible IEP. This includes assets used in a business such as vehicles and equipment. CCPCs that acquire IEP that becomes available for use by December 31, 2023, can claim up to 100% CCA on the IEP. The same end date applies to property acquired by eligible Canadian partnerships that had at least one member that was not an individual. No claim is available under this provision after this date.
For individuals and other eligible Canadian partnerships (where all members are eligible individuals), the property must be made available for use by December 31, 2024.
Accelerated investment incentive property (AIIP) – general
Most capital assets are eligible AIIP. AIIP property that is not manufacturing and processing (M&P) or clean energy equipment is eligible for triple the usual CCA claim available in the year of acquisition. For property that becomes available for use after December 31, 2023, this will decline to twice the usual CCA available in the first year. For property made available for use after December 31, 2027, no enhancement will be available.
Zero-emission property and manufacturing and processing (M&P) or clean energy equipment
The 100% CCA deduction applicable to zero-emission vehicles, zero-emission automotive equipment and AIIP that is either M&P or clean energy equipment is only available for property that becomes available for use by December 31, 2023. Property that becomes available for use by December 31, 2025 will be subject to a maximum 75% first-year CCA deduction. Property that becomes available for use in the following two years will be subject to a 55% maximum.
ACTION: Many assets acquired and made available for use by December 31, 2023 will be eligible for an enhanced first-year CCA claim. When the asset is made available for use after this date, enhanced CCA may still be available but at a much lower rate.
Surcharge To Accept Payment Via Credit Card: GST/HST?
As of October 2022, merchants could charge an additional fee for accepting payment via credit card. In a March 28, 2023 Technical Interpretation, CRA opined that the additional fee would be a separate exempt supply of a financial service and, therefore, not subject to GST/HST if all of the following conditions are met:
– the fee is charged to the cardholder solely for the acceptance of the use of the credit card as a payment method and is not charged if another payment method is used;
– the fee is imposed by (and is thus the revenue of) the merchant who provides to the cardholder the property or service that is purchased with the use of the credit card and not by a person who acts as a billing agent or payment service provider in facilitating the payment;
– the fee is subject to the relevant credit card network rules relating to surcharging, including rules regarding the calculation and level of the surcharge; and
– the fee is shown and charged separately to the cardholder.
ACTION: If charging an additional fee to accept credit cards, ensure you satisfy the above conditions to ensure the fee is not subject to GST/HST.
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