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Canada Continues To Aim At Attracting New Investment With Lower Taxes

The Canadian government continues to boast about their plans to further reduce income tax for corporations in an effort to attract additional investment from outside its borders.

Some of the tax changes include:

  • Substantial, broad-based tax reductions that are lowering the federal general corporate income tax rate from 22.12 per cent (including the corporate surtax) in 2007 to 15 per cent in 2012. These tax reductions include the elimination of the corporate surtax in 2008 for all corporations and a reduction in the federal general corporate income tax rate to 18 per cent as of January 1, 2010.
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CRA announces electronic filing requirements for GST and HST

Beginning July 1, 2010, all gst/hst registrants with annual taxable supplies over $1.5 million (in addition to some other less common situations contained within the release) will be required to filing electronically.

Although these changes are only in effect for those mentioned above, the Government encourages all registrant to filing their gst/hst returns electronically.

The full release can be viewed here.

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The Goverment Gives Long-Haul Truck Drivers Additonal Tax Benefits

On December 28th, 2009 the Minister of Finance announced that the eligible deduction portion of meal expenses for long-haul drivers will be increased to 75% from 70% for meals incurred in 2010.

The announcement also discusses an additional increase for meals incurred after 2010 to 80%.

The full announcement can be read here.

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Flaherty Announces New Automobile and Expense Rates for Business

On December 31th, 2009 the Minister of Finance announced the following items:

  • The capital cost allowance cap of $30,000 (plus applicable taxes) for passenger vehicles will remain in affect for vehicles purchased after 2009.
  • The maximum allowable deduction for interest incurred on debt to finance business vehicles will remain at $300 per month.
  • The maximum deduction for leased vehicles will remain at $800 per month (plus applicable taxes).
  • Personal reimbursement rates for vehicle employment use will remain at 52 cents per km for the first 5,000 km and 46 cent per km for each subsequent km.
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The Case For A Canadian Flat Income Tax System

Maureen Bader at the Canadian Taxpayers Federation makes the case for a flat Canadian Tax citing stats from 2004 Statcan data.

The short article can be read here:

http://www.taxpayer.com/blog/11-12-2009/weathy-bear-disproprionately-higher-tax-burden

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CRA Announces Interest Rates For The First Quarter

percentageCRA has announced their interest rates for the first quarter of 2010. The rates include both the penalty rates for overdue balances as well as the prescribed rates for employee and shareholder loans:

  • The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums will be 5%.
  • The interest rate paid on overpayments will be 3%.
  • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 1%.

They’ve also released the rates for overdue taxes and overpayment rates for the following items:

Tax and Duty Overdue remittances Overpaid remittances
  • Goods and Services Tax (GST)
5% 3%
  • Harmonized Sales Tax
5% 3%
  • Air Travellers Security Charge
5% 3%
  • Excise Tax (non GST)
5% 3%
  • Excise Duty (except Brewer Licensees)
5% 3%
  • Excise Duty (Brewer Licensees)
3% N/A
  • Softwood Lumber Products Export Charge
5% 3%

You can read more at CRA here.… Read more...

CRA’s New Mandatory E-Filing Requirements For Corporations

cra2

The CRA has announced that for year-ends ending after January 2009 all corporations with revenues in excess of $1 million will be required to file their corporate T2 returns electronically.

They will however only be assessing penalties to those T2 returns with tax years ending after 2010 that are not filed electronically, in essence giving businesses one year to transition to the new rules with little threat of penalties.

The CRA is strongly encouraging businesses with revenues under $1 million to file electronically even thought they are not required.… Read more...

CRA Is Now Offering Online Payment Services

cra_mypayment

It’s been a long time coming, but The Canada Revenue Agency is now offering electronic payments for individuals and businesses.

Their new MyPayment system allows individuals to pay personal tax installments and balances as well as allowing businesses to pay the following accounts:

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Home Renovation Tax Credit – What Qualifies?

renovationOn January 27th, 2009 Jim Flaherty, Federal Finance Minister announced the introduction of the Home Renovation Tax Credit. The non-refundable tax credit is calculated at 15% of eligible expenses over $1,000 to a maximum of $10,000. The maximum Home Renovation Tax Credit one could receive would be $1,350 e.g. $9,000 x 15%.

Only expenses incurred between January 27, 2009 and February 1st, 2010 will qualify for the credit. This tax credit will help many families reduce the overall cost of home renovations, however you must be aware of which expenses are eligible before claiming the credit for tax purposes.… Read more...

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