What is not covered under this agreement? Generally, these rules may result in the following adverse tax consequences: Additional complex rules provide for the potential application of the foreign affiliate dumping rules on certain indirect investments, the potential ability to avoid deemed dividend treatment through elected paid-up capital reductions, potential reinstatements of previously reduced paid-up capital, and certain exceptions to the rules (including with respect to certain corporate reorganizations). Do you think broader tax reform should be a top government priority?

... Over 70% of the Counties collect revenue below half of the estimated potential In the period between 2013 to 2019, ... Read More.

The government also announced its intention to review the income tax treatment of fertility-related medical expenses under the medical expense tax credit.

The budget announced that the CRA will expand the service across Canada and make it permanent.

“Mutual fund trusts” (as defined in the ITA) are commonly used as pooled investment vehicles for retail investors. As currently drafted, the foreign affiliate dumping rules apply only where the CRIC is controlled by a non-resident corporation. Budget 2019 makes adjustments to excise duties under the ETA.

What more can the CRA do to improve tax administration for tax service providers? This measure would apply regardless of the cost of the redeeming unitholder’s units.

But there are broader, more systemic issues with Canada’s tax system that the government needs to tackle. Budget 2019 proposes allowing the CRA to send requirements for information electronically, as of January 1, 2020, to banks and credit unions where the bank or credit union has provided consent. Proposals relevant to dividend equivalent payments on foreign shares would be effective in respect of amounts paid or payable or credited on or after Budget Day. We will continue to call on the government to commit to a comprehensive review to ensure our tax system is among the world’s fairest, simplest and most efficient. Bottom line: there is still a long way to go before Fiscal Year 2020 is completed, but at least there’s a path forward. The remaining proposals discussed above would be effective in respect of amounts paid or credited as SLA compensation payments on or after Budget Day, subject to grandfathering for payments made prior to October 2019 pursuant to a written arrangement entered into before Budget Day. We will continue to discuss the objections and appeals process with CRA with the aim of improving the system.

CPA Canada Handbook: Standards and guidance collection.

These proposals would apply on or after Budget Day, subject to grandfathering for existing agreements until the end of 2019 similar to the grandfathering provided when the currently enacted derivative forward agreement rules were introduced in 2013. If you have any questions or require additional analysis on Budget 2019, please contact any member of our, Private Equity and Pension Fund Investments, Canada proposes changes to withholding tax on dividend equivalent payments, Budget 2019 limits employee stock option benefits but signals possible tax deductions for employers. As in Budget 2018, Budget 2019 does not include any specific reaction to U.S. tax reform and relatively little is done to assist the business community. Budget 2019 is ambitious in its spending, contemplating a deficit of $19.8 billion for the 2019-2020 fiscal year. measures announced in Budget 2016 on information reporting requirements for certain dispositions of an interest in a life insurance policy.

We offer expert advice on a broad range of taxation matters.

In addition, Budget 2019 proposes to deny a deduction to a mutual fund trust that allocates any amount of ordinary income to a redeeming unitholder in circumstances where the redemption proceeds of the unitholder are reduced on the allocation. FY21 Appropriations Update: A Continuing Resolution is Coming but Will it be Passed into Law? An update to the SR&ED Investment Tax Credit Policy is being prepared. Under existing rules applicable to “securities lending arrangements” (as defined in the ITA), where the borrower is a Canadian resident undertaking such activities in Canada, and the lender is a non-resident, withholding tax consequences under the ITA on dividend equivalent payments made by the borrower to the lender will depend on the type and amount of collateral posted by the borrower under the arrangement. Describes major savings and reform proposals included in the 2019 President's Budget. One outcome of the design jam is a CRA plan to create enhanced digital systems that would allow taxpayers (and their advisors) to track both the receipt and progress of their requests to the CRA. Budget 2019 proposes to extend GST/HST relief in respect of certain health care services and products. In particular, no clarity is provided with respect to the meaning of the phrases “large, long-established, mature firms” and “start-up or rapidly growing Canadian businesses.” In addition, Budget 2019 does not provide any guidance on whether the $200,000 annual limit will be indexed to inflation. The issue has come up in general discussions with members and also in a CRA-CPA “design jam ” brainstorming session last fall.

This measure applies to supplies and imports made after Budget Day.

To reduce the tax efficiency of these and similar transactions, the Government of Canada implemented the foreign affiliate dumping rules in 2012.

have an individual net income for the year that does not exceed the top of the third tax bracket for the year ($147,667 in 2019).

All this would mean the Senate’s long delayed work on FY20 appropriations bills could start to move forward. Currently, the Home Buyers’ Plan (HBP) allows first-time home buyers to withdraw up to $25,000 from their Registered Retirement Savings Plan to purchase a home without having to pay tax on the withdrawn amount. As we reported in the House Fiscal Year 2020 (FY20) Defense appropriations post, the Trump Administration and Congressional leaders were homing in on a budget agreement. Persons who experience the breakdown of marriage or common-law partnership will be permitted to participate in the HBP even if they are not first-time home buyers provided that the separated person lives separate and apart from their spouse or common law partner for at least 90 days.

Individuals can generally earn investment income in a Tax-Free Savings Account (TFSA) on a tax-exempt basis. While mutual fund trusts are treated as separate taxpayers, they operate as flow-through vehicles.

For enquiries, contact us. Budget 2019 indicates that any new measures would only apply on a going-forward basis and will not apply to any employee stock options granted prior to the announcement of legislative proposals. Budget 2019 proposes to invest an additional $150.8 million over five years, starting in 2019–20. CPA Canada has put together resources to help manage your finances and provide you with the tools you need during this crisis – and beyond. Budget 2019 boosts CRA services Budget 2019 boosts CRA services for taxpayers and their advisers.

The proposed changes will come into effect on May 1, 2019 (with the exception of cannabis oil product packaged before May 1, 2019, regardless of the final sale date to a purchaser). Current exemptions for fresh and dried cannabis, cannabis oils that contain no more than 0.3% THC, and pharmaceutical cannabis products remain unchanged. Budget 2019 also contemplates a $4-billion Canada Housing Benefit, the details of which are to follow. Budget 2019 proposes to invest an additional $50 million over five years starting in 2019-2020 to improve its customer service by hiring additional staff to deal more efficiently with taxpayer requested adjustments to tax returns post-filing and extend the dedicated telephone support line for tax service providers. This measure would apply to taxation years that begin on or after Budget Day. It includes both discretionary and mandatory savings proposals.

Get information on CPA Canada’s research and thought leadership on this important issue. measures announced on November 21, 2018, in the Fall Economic Statement to: provide for the Accelerated Investment Incentive; allow the full cost of machinery and equipment used in the manufacturing and processing of goods, and the full cost of specified clean energy equipment, to be written off immediately; extend the 15% mineral exploration tax credit for an additional five years, and.

Interestingly, one of the examples provided in Budget 2019 that explains the operation of the employee stock option proposals suggests that amounts in excess of the $200,000 annual cap may be deductible to the employer that granted the option. With the National Science Foundation and many of the other federal research agencies being in the non-defense side of the federal budget, increases there should translate into increases for research. This page is for individuals and businesses and gives access to The Minister of Finance latest budget. With this service, small and medium-sized tax advisors can get help from experienced CRA staff on tax issues that are more complex and interpretive than those typically handled through the CRA’s general enquiries service. You will not receive a reply. Budget 2019 proposes to curtail this practice by denying a mutual fund trust an offsetting deduction in respect of any portion of a capital gains allocation to a redeeming unitholder that exceeds this amount. Bruce Ball, FCPA, FCA, CFP May 16, 2019 Budget 2019 didn’t announce the comprehensive tax reform that Canada so urgently needs, but it does commit funds for enhancing tax services.