Income Tax Act

News & Analysis as of

New Rules Provide Relief from Canadian Withholding on Salary Paid to Cross-Border Employees

Proposed amendments to the Income Tax Act (Canada) (ITA) will provide relief from Canadian payroll withholdings for many non-resident employers whose employees work in Canada on a temporary or short-term basis....more

Bill 186: Ontario Retirement Pension Plan Act (Strengthening Retirement Security for Ontarians), 2016, Introduced

On April 14, 2016, the Ontario government introduced the Ontario Retirement Pension Plan Act (Strengthening Retirement Security for Ontarians), 2016, as Bill 186 (Bill or Act) in the Ontario legislature. The government...more

Update On The Exemption For Non-Residents From Payroll Withholding

The Canada Revenue Agency (“CRA”) recently introduced a program to ease the administrative burden associated with Canadian withholding on the salary, wages, or other remuneration paid to non-resident employees performing...more

CRA: Drones Depreciable at 25%

Aerial drones appear to have many commercial uses. If you use a drone in your business, you may be able to deduct capital cost allowance in respect of the drone. In CRA Document 2016-0633111E5 “CCA Class of a Drone”...more

2016 Federal Budget – Selected Tax Measures

On March 22, 2016, the Minister of Finance tabled Canada’s 2016 Federal Budget (the 2016 Budget). This was the first budget presented by the newly-elected Liberal government, which won a strong majority in the fall 2015...more

FC Dismisses JR Application for Delay

A party may bring an application pursuant to section 18.1 of the Federal Courts Act for review of a discretionary decision of a government board, commission or other tribunal.  Generally, the application must be made within...more

New UK Withholding Tax Exemption For Qualifying Private Placements

On 1 January 2016, a new exemption from UK withholding tax for interest paid on “qualifying private placements” came into force. The conditions to the new exemption focus on various attributes that HMRC consider to be...more

Kruger: Appeal Allowed … Crown Awarded Costs

How should the Tax Court award costs where the taxpayer’s appeal was allowed but no changes were made to the assessment at issue? This unusual situation was considered by the Tax Court in Kruger Incorporated v. The...more

CRA Positions on Deferred Share Unit Plans and Private Health Services Plans

In November of this year at the Canadian Tax Foundation’s 67th Annual Tax Conference (Conference), the Canada Revenue Agency (CRA) announced its current positions on Deferred Share Unit (DSU) conversions; payment events for...more

Rectification in a Tax Context: The Intention Standard Prevails

A drafting mistake in an agreement can result in significant and unintended tax consequences. In the recent case of Baytex Energy Ltd. v. Canada (Attorney General) (Baytex), the Court of Queen’s Bench of Alberta (Court)...more

CRA Publishes Reminder on Charities’ Political Activities

Political activities have been a hot topic for the CRA’s Charities Directorate in the last few years. In the CRA’s 2015 Program Update, the Charities Directorate stated that its recent political activity audit included...more

SCC Dismisses Appeal in Tax Advisor Penalty Case

The Supreme Court of Canada has dismissed the appeal of the taxpayer and determined that the tax advisor penalty in section 163.2 of the Income Tax Act is administrative in nature. The Court’s 4-3 decision in Guindon v. The...more

Labour Fund Reporting Requirements Enacted

The Income Tax Act was recently amended to enact unprecedented and potentially onerous public disclosure obligations on labour organizations and investment funds in which labour organizations or persons represented by a...more

SCC to Decide Tax Advisor Penalty Case on July 31

What is the nature of the third-party penalty in section 163.2 of the Income Tax Act? That question will be answered by the Supreme Court of Canada when it decides the case of Guindon v. The Queen (Docket No. 35519) on Friday...more

CRA: Bitcoins may be Specified Foreign Property

The CRA recently provided its views on whether digital currency, including Bitcoins, are considered “specified foreign property” under the foreign property reporting rules in section 233.3 of the Income Tax Act. Under...more

McNally: CRA Does Not Have Unfettered Discretion to Delay Assessment

In McNally v. Canada (National Revenue) (2015 FC 767), the taxpayer brought an application to the Federal Court for an order requiring the Minister to assess his tax return. The Federal Court allowed the taxpayer’s...more

BP Canada: CRA Entitled to Tax Accrual Working Papers

In BP Canada Energy Company v. Minister of National Revenue (2015 FC 714), the Minister brought an application pursuant to subsection 231.7(1) of the Income Tax Act (Canada) (the “Act”) before the Federal Court of...more

Baytex: ABQB Grants Rectification

In Baytex Energy Ltd. et  al. v. The Queen (2015 ABQB 278), the Alberta Court of Queen’s Bench considered whether rectification and/or rescission were available to address mistakes that could result in the taxpayer being...more

Loss Determinations: No Time Like the Present

Under subsection 152(1.1) of the Income Tax Act, a taxpayer may apply for a determination of losses for a tax year. A taxpayer typically requests a loss determination after the CRA has issued a nil assessment. ...more

McKesson: Taxpayer Seeks to Raise Additional Issue on Appeal

The transfer pricing case of McKesson v. The Queen has raised procedural issues that are without precedent in Canadian tax cases. This week, those procedural issues became a central part of the matters that will be considered...more

Maddin: Failure to Inquire Leaves Director Liable

In Maddin v. The Queen (2014 TCC 277), the taxpayer was a director of a corporation in the marble and granite industry (the “Corporation”) which failed to remit nearly $300,000 of source deductions related to salaries, wages...more

Guindon: SCC Hearing Scheduled for December 5, 2014

The highly-anticipated appeal to the Supreme Court of Canada in Guindon v The Queen has been scheduled for hearing on December 5, 2014, and the parties have now filed their factums in the appeal. The appeal concerns...more

Tax Court: Storage Not a “Small Business”

The small business deduction (“SBD”) is a tax-preference provided to certain privately-held Canadian corporations, and only in respect of certain types of income. More specifically, the SBD provides for a reduction of the...more

A Clarifying Development – “Canadian Content” Tax Credit Regulations Amended

The October 4, 2014 Canada Gazette (being vol. 148, no. 40), contained something of note for Canadian film and TV lawyers: amendments to the Income Tax Act regulations which govern the “Canadian content” tax credits for...more

1057513 Ontario Inc.: The Clear Meaning of Subsection 129(1)

At the heart of tax integration in Canada is the refundable tax and dividend refund mechanism in subsection 129(1) of the Income Tax Act (the “Act”). Generally, to avoid undue deferral of tax on investment income...more

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