The CRA has a new ‘project’ underway. This time the target is employees who deduct employment expenses under section 8 of the Income Tax Act. The CRA seems to be on the lookout for employees who are also shareholders of…
Getting tracked
These days, in so many aspects of our lives, we are the product (as the saying goes). Retailers, for example, offer loyalty programs because, among other things, they allow our spending habits to be tracked. It turns out that the…
Elective dividend refund
Donald Cherniawsky, in “Are Dividend Refund Claims by Dividend-Paying Corporations Elective?” 17:4 Tax for the Owner-Manager (October 2017), refers to CRA technical interpretation 2016-0649841E5. The TI states that a dividend payer could elect not to claim a dividend refund in…
Employee discounts
Kathryn Walker, “Employee Discounts for Merchandise: The Law” Canadian Tax Focus 7:4 (November, 2017) argues that the CRA’s new policy in Income Tax Folio S2-F3-C2, “Benefits and Allowances Received from Employment” on employee discounts simply reflected a change in the…
Cell phone costs for employees
Neal Armstrong draws our attention to Meberatu v R, 2017 TCC 211. The Court allowed the taxpayer-employee to deduct amounts in respect of her work-related use of a cell phone. The amounts permitted were estimates because the taxpayer failed to…
55(2) ‘double taxation’
In 101139810 Saskatchewan Ltd. v R, 2017 TCC 3, an individual owned all of the shares of DC, which held some shares of Targetco. The individual undertook a series of transactions that ended with the sale of Targetco shares to…
Agreement to issue shares to employees
In Dino Infanti “Employee Stock Option Rules and Legally Binding Agreements” Tax for the Owner-Manager 17:2 (April 2017), the author summarizes CRA technical interpretation 2016-0641841I7 (September 19, 2016). The technical interpretation, in light of Transalta Corporation v R, 2012 TCC 86, states that s 7 and s 110(1)(d) of the Income Tax Act (Canada) apply only if there is a legally binding agreement to issue shares.
T1135 penalty applies automatically
The CRA has concluded that the s 162(7) penalty for late-filing a T1135 applies automatically. Answer to question 14 at the APFF Roundtable on October 6, 2017.
Spousal rollover
Tax Interpretations reports that the CRA believes it is possible to rollover property to a common-law spouse under section 73 of the ITA or the RRSP rollover rules pursuant to a written separation agreement. This is true, the CRA thinks,…
TOSI Wonderland
Let’s see what the harassed tax adviser (or front-line CRA auditor) must do to answer basic client questions about the new tax-on-split-income (TOSI) rules.