On July 18, 2017, the federal Minister of Finance, Bill Morneau, announced extensive proposed changes to the taxation of private corporations in Canada. These changes likely will impact you, and will likely result in you having to pay significantly more in taxes starting in 2018. For more information, please visit the following links:
These changes were proposed to ensure the wealthiest of Canadians pay their fair share of taxes. Unfortunately, the proposed changes impact ALL private corporations, not just those that are owned by the wealthiest of Canadians. In fact, the majority of private corporations in Canada are owned by “middle-class” Canadians, the very group of Canadians that the Government promised to protect.
We do not believe that these proposals are fair, and are counter-productive to the Canadian economy as a whole for the following reasons:
- The proposals are based on the unsupportable argument that an employee and a private corporation owner should be taxed the same. We believe that a private corporation owner carries significant additional risks and responsibilities that an employee does not, hence warrants the current tax regime;
- The proposals argue that spouses who are not directly involved in the business do not share in the risks and rewards of the corporation;
- The proposed changes casts a tax net at the wealthiest of Canadians that is so wide that it is going to catch hundreds of thousands of Canadians in the middle-class, resulting in the largest tax increase in decades to the middle-class;
- The proposed changes take away an important incentive for people to take risk and to innovate in Canada;
- The “trickle-down” effect on the economy will be far in excess of the tax revenues generated;
- A 75-day consultation window, in the middle of summer, is not properly consulting with the Canadians affected, especially given the changes proposed are changing tax law that has been in place for over 40 years;
- The proposed changes are overly complex, thus resulting in significant tax uncertainty for all impacted.
We think that you, as a private corporation owner, should be aware of these proposals and how they may affect your business, your family, and your future. It is a very good time to contact your Member of Parliament (Pamela Goldsmith - Jones - [email protected] or 604.913.2660) to express your concerns before the consultation period ends on October 2, 2017.
Some of these proposals are scheduled to come into law on January 1, 2018, which will likely impact your 2017 tax planning decisions. As there may be significant amendments to the proposed legislation (or hopefully abandoned altogether depending on the response from Canadians during the consultation period), we do not recommend any action with regard to your business structure at this time. However, we will be in touch with you after the consultation period closes and once it becomes clear as to the extent of the final proposed changes.
It has come to our attention that a CRA scam purporting to be endorsed by TCG Chartered Professional Accountants LLP has been distributed via email.
Be advised that neither TCG nor CRA is involved in any way with this illicit activity.
Please visit the following CRA resource to learn how to best protect yourself online and how to identify fraudulent activity:
Have you been a victim?
You should report deceptive telemarketing to the Canadian Anti-Fraud Centre online or by calling 1-888-495-8501.
Do you own a business?
If you do own a business, you have probably had to pay CRA at one time or another. See the link below for helpful information on how to make a payment to CRA, or in cases where you cannot make a payment right away, how to arrange for payment options.
New for 2016 – teachers and early childhood educators may be eligible for the Eligible Educator School Supply Tax Credit which will allow you to claim a refundable tax credit of 15% on up to $1,000 of school supplies purchased. Click the following link for more information including which educators are eligible to claim the tax credit.
Effective tax year 2016, you now have to report the sale of your principal residence on your tax return. See the link below for more information.
CPP changes are coming which will mean more money when you retire, but increased payroll CPP deductions now.
See below link for more information
Did you know you can now get a proof of income statement online?
Financial institutions or government departments may ask to provide a proof of income statement when applying for student loans, grants, subsidies or mortgages. Having online access to your CRA account will speed up this process as you would be able to login and print your proof of income statements instead of calling and waiting for one in the mail.
Online access also allows you the option to check on your income tax return, view personalized benefit and credit information and check RRSP & TFSA contributions limits.
See the link below for steps to registering for your CRA account online.
Are you a non-resident home owner? Purchasing a home from a non-resident?
We are all well aware of how hot the real estate market is on the Sunshine Coast and Vancouver at the moment. There are many people taking advantage of this fact and selling their homes. However, if you are a non-resident who owns a home in Canada, or you are purchasing a home from a non-resident, there are important things you need to know! See the link below for more information:
Disposing of or acquiring certain Canadian property
If either of these scenarios apply to you, it is always best to contact a tax advisor to aid you in your transaction to ensure the necessary steps are taken to avoid any unpleasant surprises in the future.
If you own a small business, or if you are self-employed, it is likely that the topic of whether or not to incorporate has come to your attention.
Incorporation can be completed at either the provincial level or at the federal level. By deciding to incorporate, your business will become a separate legal entity and the liabilities of the company will become limited. Seeking legal advice before deciding to incorporate is also advisable, as each individual’s situation is unique. There are both advantages and disadvantages that should be considered in the decision of whether or not to incorporate.
Want to keep reading? Click the link below for more information on whether the decision to incorporate is right for you!