On January 1, 2022, the Select Luxury Items Tax Act, also known as the Luxury Tax Act, came into effect. This new tax, introduced as part of the 2021 Federal Budget, targets high-earning Canadians who can afford to buy expensive goods, making them contribute more to the tax system....
Introduction Home flipping in Canada has been a popular strategy for those looking to invest in real estate, capitalize on market trends, and potentially earn significant profits. However, one of the less discussed but critically important aspects of this practice is the tax implications, particularly when it comes to...
The Canadian Revenue Agency (CRA) has recently announced that bare trusts are not required to file T3 returns and Schedule 15 for the 2024 tax year, extending from a similar exemption for the 2023 tax year. Before the exemption, new tax rules for trusts were scheduled to become effective...
Introduction: An Overview of Case Laws Helps to Understand Circumstances that May Warrant Relief under the CRA’s Taxpayer Relief Provisions for Canadian Taxpayers Under subsection 220 (3.1) of the Income Tax Act and subsection 281.1 (1) of the Excise Tax Act, the Canada Revenue Agency (CRA) has the discretion...
Introduction – Director’s Liabilities Under the Income Tax Act and the Excise Tax Act (GST/HST) A director of a corporation may be held personally liable when the corporation fails to deduct, withhold, remit, or pay certain taxes. Specifically, under section 227.1 of the Income Tax Act, the liability of...
EU Court Ruled that Privilege in Tax Matters Extends Only to Lawyers Mossack Fonseca, the law firm involved in the Panama Papers scandal, was closed, but the scandal’s impact on the legal profession endures. Although little criminal activity by lawyers has been proven, the negative optics surrounding Mossack Fonseca have...
Introduction: When the Subject of Scams Becomes the Victim of Scams Many Canadian taxpayers have encountered scams impersonating the Canada Revenue Agency (CRA), where scammers and fraudsters exploit the agency’s authority and Canadian taxpayers’ fear of tax and administrative penalties. These scams, such as cryptocurrency scams, are crafted to...
Introduction: The Nature of Business Income for Tax Purposes A Canadian tax resident is taxable on income from all sources, including from business and property. A taxpayer’s income from a business or property for a particular taxation year is defined by subsection 9(1) of the Income Tax Act as...
INTRODUCTION Understanding Your Tax Affairs and Vigilance to CRA Communications is Necessary To Avoid Tax Liabilities Failure to understand your tax affairs or check your CRA online account regularly could cause you significant tax liabilities. Ignorance of CRA practices and procedures may also deny you certain procedural rights. At...
Introduction To Trusts: What Are They? In Canada, a trust is a legal arrangement where one party, known as the trustee, holds and manages assets for the benefit of another party, called the beneficiary. The trust is established by the settlor, who creates a document known as a trust...