In April 2025, the Federal Court of Appeal delivered its judgment on Total Energy Services Inc. v HMK, 2025 FCA 77, upholding the decision of the Tax Court of Canada in 2024 TCC 12 in February 2024. This case affirms the application of the general anti-avoidance rule (GAAR) under...
What is an Employer Ownership Trust? An Employee Ownership Trust (EOT) is a Canadian-resident trust designed to hold shares in qualifying businesses on behalf of employees, supporting succession planning and promoting employee ownership in small and medium-sized enterprises. The EOT framework allows employees to borrow from the business to...
Introduction Business owners are often tempted to dip into the corporation’s pockets to pay for personal expenses. A temptation which seems like a relatively insignificant transgression but in reality, is a decision that can create dire tax consequences. A corporation paying amounts for a purpose other than earning income...
The CRA reversed $246 million in COVID benefit debts after taxpayers challenged their decisions The Canadian government has had to annul debts totalling over $246 million for numerous citizens initially deemed ineligible for pandemic benefits. Since 2022, the Canada Revenue Agency (CRA) has been reclaiming funds from individuals who allegedly...
What is an alter ego trust An alter ego trust is an inter-vivos trust, which means it’s created during your lifetime, established after 1999. To qualify as an inter-vivos trust, you (the settlor) must be a Canadian resident aged 65 or older and the sole beneficiary of all income...
Introduction – The Canadian Foreign Tax Credit System An individual who is a Canadian tax resident is liable to pay Canadian income tax on worldwide income. This could result in double taxation where that Canadian taxpayer is also subject to income tax in another jurisdiction on any part of...
What is a retiring allowance? A retiring allowance is a payment made by an employer to an employee when their employment is terminated. This payment is typically based on the employee’s length of service and their position within the organization. While the terms “retiring allowance” and “severance package” are...
Introduction – Tax Exemptions for Charities To promote philanthropic ventures, the Canadian income tax regime offers generous tax benefits for people and organizations engaging in charitable activities. First, under the Canadian Income Tax Act, an organization that maintains registered charity status is tax-exempt on any income it receives. An...
The Canada Revenue Agency (CRA) has revealed that $458 million in funds distributed to employers through a pandemic-era wage subsidy program have either been denied or adjusted. This decision is a consequence of an ongoing tax auditing process that is not yet complete. The CRA published a report on...
Introduction: First Home Savings Account (FHSA) Purchasing a home is a significant milestone in one’s life, often requiring substantial financial planning and saving. With increasing housing prices and stagnant housing supplies in Canada, in August 2022, the Canadian federal government in Budget 2022 proposed the tax-free First Home Savings...