On January 1, 2017, changes to Canadian tax rules come into force that will impact how certain annuity payments are taxed. For prescribed annuities purchased after that date, more of each payment will become taxable as a result of these changes…
Tag: Tax
Qualified Foreign Pension Fund Exemptions for Certain U.S. Investment Offerings
Canadian pension funds are continually seeking investment opportunities abroad with a view to diversifying their portfolio and maximizing risk-adjusted returns. Offerings of investments in U.S. real estate and infrastructure projects will likely increase as a result of recent U.S. legal reforms which aim to attract foreign investment in these areas. Under the U.S. Foreign Investment in Real…
Update on Timing of Proposed Changes to Taxation of Stock Options
In remarks accompanying the new federal government’s first fiscal update, on November 20, 2015, Canada’s Minister of Finance provided further guidance on proposed changes to tax rules that would limit the annual deduction from income that employees can claim upon exercising stock options. Significantly, Minister Morneau indicated that any such changes would only apply to…
New CRA Technical Direction Published for Health and Welfare Trusts
The Canada Revenue Agency (“CRA”) has posted an updated technical direction regarding Health and Welfare Trusts. Effective July 27, 2015, Income Tax Folio S2-F1-C1: Health and Welfare Trusts replaces and cancels CRA’s prior administrative position, as outlined in Interpretation Bulletin IT–85R2, Health and Welfare Trusts for Employees. The new Technical Direction incorporates a number of…
Updated CRA Form For Direct Transfers Between Registered Plans
On December 24, 2014, the Canada Revenue Agency (“CRA”) published a new electronic version of form T2151, “Direct Transfer of a Single Amount Under Subsection 147(19) or Section 147.3.” Deferred profit sharing plan trustees or registered pension plan administrators recording the direct transfer of a single amount for an applicant should ensure that the correct…
2015 EI Maximum Insurable Earnings Rate Set
On September 12, 2014, the Canada Employment Insurance Commission (“CEIC”) announced that the 2015 Employment Insurance (“EI”) Maximum Insurable Earnings rate will increase to $49,500 from $48,600 in 2014. Premiums will be reduced by $0.34 per $100 of insurable earnings for residents of Quebec covered under the Quebec Parental Insurance Plan. Accordingly, those residents will…
Small Business Job Credit and New EI Rate-Setting Mechanism Announced
On September 11, 2014, the federal government announced the introduction of the Small Business Job Credit (“Credit”), which is intended to provide tax relief for small employers. The Credit effectively lowers the Employment Insurance (“EI”) premium rate for eligible businesses from the current, legislated rate of $1.88, to $1.60 per $100 of insurable earnings in…
Ontario Passes Employer Health Tax Act Amendments, Royal Assent Granted
On December 12, 2013, the Ontario government passed Bill 105, the Supporting Small Businesses Act, 2013. As previously reported, the Bill amends the Employer Health Tax Act to increase the exemption amount for eligible employers to $450,000 for the calendar years 2014 to 2018, after which an exemption amount would be adjusted every five years…
Federal Government Proposes Mandatory e-filing ITA Regulation Amendment
Further to a Budget 2009 initiative, on December 7, 2013, the federal government published proposed amendments to subsection 205.1(1) of the Income Tax Regulations. Regulations Amending the Income Tax Regulations (Mandatory Electronic Filing – Prescribed Information Returns) would expand mandatory electronic filing (“e-filing”) for prescribed information returns for the purpose of subsection 162(7.02) of the…
New Federal Graduated Late-Filing Penalty for Certain Employment-Related Tax Filings
On November 20, 2013, the federal government registered Regulations Amending the Income Tax Regulations (Late Filing Penalty – Prescribed Information Returns). The regulatory amendment relates to the government’s Budget 2009 and subsequent legislative initiative (via Budget Implementation Act, 2009 amendments) to provide for a “separate, less severe, graduated penalty that would be applicable where ‘prescribed’…