Overview of the debt forgiveness rules Sections 80 to 80.04 of the Income Tax Act contain the rules governing the tax consequences of debt forgiveness. These rules are designed to prevent a windfall tax benefit where a taxpayer is relieved of its obligations without recognizing income. A windfall refers...
Improvements to the CRA Authorization Request Service in Represent a Client As part of the Canada Revenue Agency’s ongoing efforts to improve service delivery by making it faster, easier, and more secure for taxpayers and their representatives, the Canada Revenue Agency has enhanced the Alternative process for individuals’ Authorization...
Introduction: Arrears Interest and the Role of Statutory Triggers in Loss Utilization In Bank of Nova Scotia v His Majesty the King, the Federal Court of Appeal (FCA) confirmed the Tax Court’s decision that arrears interest could accrue until the date of a reassessment, even in situations where a...
Introduction: What is a Retirement Compensation Arrangement? Retirement planning is a cornerstone of long-term financial security, especially for high-income earners and corporate executives whose pensionable earnings often exceed the thresholds permitted under traditional retirement savings vehicles. One such advanced planning mechanism available in Canada is the Retirement Compensation Arrangement...
Navigating Common Canadian Tax Issues in the Platform Economy The rise of the platform economy, encompassing gig work, freelancing, online sales, and short-term rentals, has created new income opportunities for many Canadians. However, with these opportunities come income tax and GST/HST tax obligations that can be complex to navigate....
Introduction: What is Share Redemption? What is Share Retraction? Corporate structures in Canada often involve various strategies for managing share ownership, capital returns, and shareholder interests. Two important concepts in corporate law and taxation that frequently arise are share redemption and share retraction. Share redemption occurs when a corporation...
Introduction – Limit on Losses from Shares Held as Capital Property Subsection 112(3) of the Income Tax Act is a stop-loss rule that limits losses from the disposition of shares held as capital property. This provision applies when a taxpayer disposes of a share that has paid a dividend...
Canadian tax evasion may lead to imprisonment of up to 2 years The Canada Revenue Agency (CRA) operates a dedicated unit known as the Criminal Investigations Program. This division is responsible for investigating tax fraud, tax evasion, and other tax-related offences. When appropriate, it refers tax evasion cases to...
Introduction: Tax Litigation & Examination for Discovery The Tax Court of Canada, established in 1983 under the Tax Court of Canada Act, serves as a federal court that adjudicates disputes arising from tax matters between individuals or companies and the Canada Revenue Agency. The court’s jurisdiction primarily encompasses appeals...
Introduction: Canadian Tax Treatment of Foreign Pension Plans and Income from Foreign Pension Plans is Complex and Fact-Specific The 2021 Canadian Census revealed that nearly a quarter of the Canadian population consisted of immigrants, which represents the eighth-largest immigrant population in the world. In 2022, Canada’s population grew by...