Announcements

 

Get caught up with Andrews & Co.

Whether it's tax season or welcoming new team members, we have a lot going on at our firm. We'll keep you connected by sharing our ongoing news.

  • Women’s business network annual charity golf tournament
    Posted

    Andrews & Co. was a proud sponsor of the 23rd annual Women’s Business Network golf tournament held on Wednesday June 21st in support of Healthy Women, Healthy Community, an initiative of the Ottawa Hospital Foundation. Four Andrews staff members attended the event, engaged in a 9-hole round of golf as well as some fun activities and mingled with other professionals, entrepreneurs and businesses.

    A huge thanks to the Women’s Business Network for organizing such an engaging event benefiting a great cause!

    Golf Golf2

    Andrews & Co. was a proud sponsor of the 23rd annual Women’s Business Network golf tournament held on Wednesday June 21st in support of Healthy Women, Healthy Community, an initiative of the Ottawa Hospital Foundation. Four Andrews staff members attended the event, engaged in a 9-hole round of golf as well as some fun activities and mingled with other professionals, entrepreneurs and businesses.

    A huge thanks to the Women’s Business Network for organizing such an engaging event benefiting a great cause!

    Golf Golf2

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  • A quick update on Renee’s travels
    Posted

    Renee has just returned from an art school in Puerto Miguel located in a small Amazonian town inhabited by indigenous communities. For the most part, her travels thus far have been on the outskirts of the main cities, however, she is currently in Iquitos working to bring awareness to LGBTQ group equality rights.

    The following are photos from her visit to the art school:

    Renee3 Renee2 Renee

    Renee has just returned from an art school in Puerto Miguel located in a small Amazonian town inhabited by indigenous communities. For the most part, her travels thus far have been on the outskirts of the main cities, however, she is currently in Iquitos working to bring awareness to LGBTQ group equality rights.

    The following are photos from her visit to the art school:

    Renee3 Renee2 Renee

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  • Walk for ALS
    Posted

    Andrews & Co. is pleased to have helped Tracey Stratton in her annual walk for ALS. Tracey was joined by Lisa Mallet and a passionate community to challenge this devastating disease.

     

    Tracey raised a total of $3,830. Congratulations on a fantastic job!

     

    image001

    Andrews & Co. is pleased to have helped Tracey Stratton in her annual walk for ALS. Tracey was joined by Lisa Mallet and a passionate community to challenge this devastating disease.

     

    Tracey raised a total of $3,830. Congratulations on a fantastic job!

     

    image001

    Read More
  • UBER DRIVERS: Registration for GST/HST
    Posted

    Most businesses must register for a GST/HST account (and therefore collect and remit GST/HST as appropriate) if they earn revenues from worldwide taxable supplies greater than $30,000 within the previous four consecutive quarters, or exceed the $30,000 threshold in a single calendar quarter. However, a special rule applies to self-employed “taxi businesses” which requires them to register regardless of the quantum of revenues.

    There has been some uncertainty as to whether drivers of ride-sharing services, such as Uber, are considered “taxi businesses”.

    The 2017 Federal Budget ended this uncertainty. It proposed that, effective July 1, 2017, ride-sharing services will be defined as a “taxi business” for GST/HST purposes and therefore will be required to charge and remit GST/HST. More specifically, a “taxi business” will now include all persons engaged in a business of transporting passengers for fares by motor vehicle within a municipality and its environs where the transportation is arranged for or coordinated through an electronic platform or system, such as a mobile application or website.

     

    Action Item: Drivers of ride-sharing services should consider registering for GST/HST.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Most businesses must register for a GST/HST account (and therefore collect and remit GST/HST as appropriate) if they earn revenues from worldwide taxable supplies greater than $30,000 within the previous four consecutive quarters, or exceed the $30,000 threshold in a single calendar quarter. However, a special rule applies to self-employed “taxi businesses” which requires them to register regardless of the quantum of revenues.

    There has been some uncertainty as to whether drivers of ride-sharing services, such as Uber, are considered “taxi businesses”.

    The 2017 Federal Budget ended this uncertainty. It proposed that, effective July 1, 2017, ride-sharing services will be defined as a “taxi business” for GST/HST purposes and therefore will be required to charge and remit GST/HST. More specifically, a “taxi business” will now include all persons engaged in a business of transporting passengers for fares by motor vehicle within a municipality and its environs where the transportation is arranged for or coordinated through an electronic platform or system, such as a mobile application or website.

     

    Action Item: Drivers of ride-sharing services should consider registering for GST/HST.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

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  • INVESTMENT MANAGEMENT FEES FOR RRSPs, RRIFs, AND TFSAs: Are Changes Coming?
    Posted

    In a November 29, 2016 Technical Interpretation, CRA opined that where investment management fees incurred by an RRSP, RRIF or TFSA are paid from outside of the plan (such as by the annuitant or holder) the plan’s controlling individual would likely be subject to a tax equal to 100% of the fees paid.

    CRA opined that investment management fees represent a liability of the registered plan trust and should, therefore, be paid using funds from the plan. If paid from outside of the plan, the resulting indirect increase in value of the plan assets would likely constitute an advantage. That is, more assets would be retained in the tax-sheltered vehicle.

    CRA further noted that it is not commercially reasonable for an arm’s length party to gratuitously pay the expenses of another party. As such, there is a strong inference that a motivating factor of the above is to maximize the savings in the plan so as to benefit from the tax exemption afforded to the plan.

    Recognizing that it is common practice for the holder of these accounts to pay the management fees, CRA indicated they will defer the application of this position until January 1, 2018.

     

    Action Item: Be aware of changes in how investment management fees are charged in the near future to avoid this tax.

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    In a November 29, 2016 Technical Interpretation, CRA opined that where investment management fees incurred by an RRSP, RRIF or TFSA are paid from outside of the plan (such as by the annuitant or holder) the plan’s controlling individual would likely be subject to a tax equal to 100% of the fees paid.

    CRA opined that investment management fees represent a liability of the registered plan trust and should, therefore, be paid using funds from the plan. If paid from outside of the plan, the resulting indirect increase in value of the plan assets would likely constitute an advantage. That is, more assets would be retained in the tax-sheltered vehicle.

    CRA further noted that it is not commercially reasonable for an arm’s length party to gratuitously pay the expenses of another party. As such, there is a strong inference that a motivating factor of the above is to maximize the savings in the plan so as to benefit from the tax exemption afforded to the plan.

    Recognizing that it is common practice for the holder of these accounts to pay the management fees, CRA indicated they will defer the application of this position until January 1, 2018.

     

    Action Item: Be aware of changes in how investment management fees are charged in the near future to avoid this tax.

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

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  • A trip to remember
    Posted

    This June, Renee Paquette, one of Andrews & Co.’s employees, has taken the opportunity to backpack in Peru with the organization, Operation Groundswell (OG).

    Operation Groundswell (OG) is a non-profit travel organization geared towards youth.

    Renee will be working personally alongside local indigenous organizations within the Peruvian Amazon to defend indigenous rights, and help strengthen their communities.

    Two of the organizations she will be working with are:

    Radio Ucamara:

    • A community radio project representing the Kukama people in Nauta, Peru. Their goal is to preserve the traditional culture by running a language school that teaches children the traditional Kukama language in effort to preserve its use within the community.
    • The goal is to help increase the impact of Radio Ucamara through increased community outreach and promotion.

    Curuinsi:

    • Organization comprised of indigenous youth who fight in defence of indigenous rights, they strive to keep their cultural practices alive and aim to strengthen their communities by supporting young community members who wish to obtain professional university degrees.
    • The goal is to help improve the existing meeting and cultural space in order to give them a usable space to live and work

    Renee is excited at the fact that she will be part of an experience that shares her values and mentions: “I feel extremely privileged to be able to visit this wonderful country while also being able to be a part of the resolution to their local challenges. This will truly be an adventure of a life time and I look forward to sharing it with all of you.”

     

    Check back in July for updates on Renee’s volunteering efforts in Peru.

    This June, Renee Paquette, one of Andrews & Co.’s employees, has taken the opportunity to backpack in Peru with the organization, Operation Groundswell (OG).

    Operation Groundswell (OG) is a non-profit travel organization geared towards youth.

    Renee will be working personally alongside local indigenous organizations within the Peruvian Amazon to defend indigenous rights, and help strengthen their communities.

    Two of the organizations she will be working with are:

    Radio Ucamara:

    • A community radio project representing the Kukama people in Nauta, Peru. Their goal is to preserve the traditional culture by running a language school that teaches children the traditional Kukama language in effort to preserve its use within the community.
    • The goal is to help increase the impact of Radio Ucamara through increased community outreach and promotion.

    Curuinsi:

    • Organization comprised of indigenous youth who fight in defence of indigenous rights, they strive to keep their cultural practices alive and aim to strengthen their communities by supporting young community members who wish to obtain professional university degrees.
    • The goal is to help improve the existing meeting and cultural space in order to give them a usable space to live and work

    Renee is excited at the fact that she will be part of an experience that shares her values and mentions: “I feel extremely privileged to be able to visit this wonderful country while also being able to be a part of the resolution to their local challenges. This will truly be an adventure of a life time and I look forward to sharing it with all of you.”

     

    Check back in July for updates on Renee’s volunteering efforts in Peru.

    Read More
  • 2017 ALS Walk
    Posted

    This March marked the fifth anniversary of the passing of our partner Andy Foreman.  Andy struggled with ALS and ultimately lost the fight as do so many others afflicted by this terrible disease.

    Tracey Stratton, one of the firm’s managers, will be participating in the Ottawa Walk for ALS which takes place on June 10th.  Walking with Tracey will be Andy’s wife and other members of his family.  She has set herself a goal of raising $3,000 to try and beat last years $2,845.01.  If you feel called to make a donation the details can be found in this link.

     

    https://secure.alsevents.ca/registrant/FundraisingPage.aspx?registrationID=3751777&langPref=en-CA

    This March marked the fifth anniversary of the passing of our partner Andy Foreman.  Andy struggled with ALS and ultimately lost the fight as do so many others afflicted by this terrible disease.

    Tracey Stratton, one of the firm’s managers, will be participating in the Ottawa Walk for ALS which takes place on June 10th.  Walking with Tracey will be Andy’s wife and other members of his family.  She has set herself a goal of raising $3,000 to try and beat last years $2,845.01.  If you feel called to make a donation the details can be found in this link.

     

    https://secure.alsevents.ca/registrant/FundraisingPage.aspx?registrationID=3751777&langPref=en-CA

    Read More
  • Important filing dates 2017
    Posted

    Download our 2017 filing dates to ensure you stay on track for the rest of the year!

    Download our 2017 filing dates to ensure you stay on track for the rest of the year!

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  • charitable donations
    Posted

    Have you ever wanted to check a charitable organization’s identity and tax status before you donate?  In Canada all Registered Charities have key information made publicly available.  You can use the Charities Listing (Link below) to find out if a Charity is registered, revoked, annulled, suspended, or penalized.  You can even find a Charity’s contract information, general activities and financial information.

     

    http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Have you ever wanted to check a charitable organization’s identity and tax status before you donate?  In Canada all Registered Charities have key information made publicly available.  You can use the Charities Listing (Link below) to find out if a Charity is registered, revoked, annulled, suspended, or penalized.  You can even find a Charity’s contract information, general activities and financial information.

     

    http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Read More
  • CRA Tax Alert: Telephone Scams
    Posted

    The Canada Revenue Agency (CRA) is warning Canadian tax payers of an increase in telephone scams where the caller is impersonating a CRA representative. These callers are requesting personal and banking information that can result in identity and financial theft.

    A clear indication of a scammer will be if they request unusual or suspicious information from you. This information includes your credit card information – including prepaid credit cards, and your passport, health card, or driver’s license details. In addition, the CRA will never leave personal information in a voice mail message or request you to do the same.

    To verify if you are dealing with a legitimate CRA representative, request their name and identification number – some collections official may come off as forceful and aggressive, but all valid representatives will provide their identification number.

    You can then call the CRA back at their general enquires line and explain the situation. Once you provide them with the identification number and information received they will be able to authenticate the original call. Due to the high increase in fraudulent calls occurring, it is recommended that you never release the information being requested and following up with the general enquires line at the CRA at once. You can also talk with your accountant and they can provide additional guidance on your specific situation.

    A special note: If you are ever the victim of one of these calls, you should report it to the Canadian Anti-Fraud Centre at once.

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors

    The Canada Revenue Agency (CRA) is warning Canadian tax payers of an increase in telephone scams where the caller is impersonating a CRA representative. These callers are requesting personal and banking information that can result in identity and financial theft.

    A clear indication of a scammer will be if they request unusual or suspicious information from you. This information includes your credit card information – including prepaid credit cards, and your passport, health card, or driver’s license details. In addition, the CRA will never leave personal information in a voice mail message or request you to do the same.

    To verify if you are dealing with a legitimate CRA representative, request their name and identification number – some collections official may come off as forceful and aggressive, but all valid representatives will provide their identification number.

    You can then call the CRA back at their general enquires line and explain the situation. Once you provide them with the identification number and information received they will be able to authenticate the original call. Due to the high increase in fraudulent calls occurring, it is recommended that you never release the information being requested and following up with the general enquires line at the CRA at once. You can also talk with your accountant and they can provide additional guidance on your specific situation.

    A special note: If you are ever the victim of one of these calls, you should report it to the Canadian Anti-Fraud Centre at once.

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors

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  • six things to avoid at tax time
    Posted

    CRA released a Tax Tip summarizing “Six things to avoid at tax time”.

    Read about it here to find out how you could save time and money: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170209-eng.html

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    CRA released a Tax Tip summarizing “Six things to avoid at tax time”.

    Read about it here to find out how you could save time and money: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170209-eng.html

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Read More
  • T3 Filing deadline is fast approaching
    Posted

    The deadline for Trusts filing a T3 Statement of Trust Income Allocations and Designations is March 31, 2017.

     

    Action Item: Please consult with your accountant to determine if this applies to you.

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    The deadline for Trusts filing a T3 Statement of Trust Income Allocations and Designations is March 31, 2017.

     

    Action Item: Please consult with your accountant to determine if this applies to you.

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Read More
  • Phoenix payroll issues
    Posted

    Have you been affected by Phoenix payroll issues?

    If so, the government has issued a question and answer bulletin on how to file your taxes. Please refer to the following link: http://www.cra-arc.gc.ca/gncy/prm/phnx-fq-eng.html

     

    Have you been affected by Phoenix payroll issues?

    If so, the government has issued a question and answer bulletin on how to file your taxes. Please refer to the following link: http://www.cra-arc.gc.ca/gncy/prm/phnx-fq-eng.html

     

    Read More
  • REPEATED FAILURE TO REPORT INCOME MAY RESULT IN A LARGE PENALTY
    Posted

    Currently, a taxpayer (including individuals, corporations and trusts) may be assessed a repeated failure to report income penalty of 10% of the unreported amount of income for a second or subsequent failure to report income on a tax return that occurs within a four-year period.

    For 2015 and subsequent tax years, the penalty would only apply where the amount of unreported income by the taxpayer is $500 or more. The budget also proposes changes to the penalty calculation. Under these changes, the amount of the penalty will be the lesser of 10% of the amount of unreported income; and

    an amount equal to 50% of the difference between the understatement of tax (or the overstatement of tax credits) related to the omission and the amount of any tax paid in respect of the unreported amount.

     

    Example:

    Greg failed to report interest income of $10,000 on both his 2015 and 2016 Personal Income Tax return (T1). Since this was his second failure to report income within the four year window, a penalty of $1,000 plus a provincial/territorial penalty of $1,000 are assessed.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Currently, a taxpayer (including individuals, corporations and trusts) may be assessed a repeated failure to report income penalty of 10% of the unreported amount of income for a second or subsequent failure to report income on a tax return that occurs within a four-year period.

    For 2015 and subsequent tax years, the penalty would only apply where the amount of unreported income by the taxpayer is $500 or more. The budget also proposes changes to the penalty calculation. Under these changes, the amount of the penalty will be the lesser of 10% of the amount of unreported income; and

    an amount equal to 50% of the difference between the understatement of tax (or the overstatement of tax credits) related to the omission and the amount of any tax paid in respect of the unreported amount.

     

    Example:

    Greg failed to report interest income of $10,000 on both his 2015 and 2016 Personal Income Tax return (T1). Since this was his second failure to report income within the four year window, a penalty of $1,000 plus a provincial/territorial penalty of $1,000 are assessed.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

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  • Employer Health Tax (EHT) DEADLINE FAST APPROACHING – MARCH 15, 2017 DEADLINE
    Posted

    Employer Health Tax (EHT) is an Ontario payroll tax on remuneration paid to employees and former employees in excess of $450,000.  If your total payroll including any associated corporations’ payroll exceeds this balance, a separate tax filing is due by March 15, 2017.

     

    Action Item: Please consult with your accountant to determine if this applies to you.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Employer Health Tax (EHT) is an Ontario payroll tax on remuneration paid to employees and former employees in excess of $450,000.  If your total payroll including any associated corporations’ payroll exceeds this balance, a separate tax filing is due by March 15, 2017.

     

    Action Item: Please consult with your accountant to determine if this applies to you.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

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  • CRA STRATEGIES ON OFFSHORE TAX EVASION: The World is Shrinking
    Posted

    A recent article reported that CRA is reviewing every electronic fund transfer over $10,000 from Canada to four foreign jurisdictions per year. The first two targets were the Isle of Man and the Island of Guernsey, with two more undisclosed jurisdictions to be reviewed by March 31, 2017. CRA has started audits of 166 high-risk taxpayers and sent over 1,000 “nudge” letters to lower risk taxpayers. For 2017-2018, CRA plans on reviewing about 100,000 fund transfers to four other undisclosed jurisdictions.

    The article also noted that the Offshore Tax Informant Program received over 3,000 tips as of October 31, resulting in almost 200 audits and 124 active files under review.

    In addition to these activities, a November 14, 2016 Huffington Post article indicated CRA identified 2,600 documents with a Canadian link, opened 85 investigations into Canadians, and has commenced 60 audits with respect to the Panama Papers.

     

    Action Item: If transferring funds offshore, retain appropriate documentation in case of CRA review.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    A recent article reported that CRA is reviewing every electronic fund transfer over $10,000 from Canada to four foreign jurisdictions per year. The first two targets were the Isle of Man and the Island of Guernsey, with two more undisclosed jurisdictions to be reviewed by March 31, 2017. CRA has started audits of 166 high-risk taxpayers and sent over 1,000 “nudge” letters to lower risk taxpayers. For 2017-2018, CRA plans on reviewing about 100,000 fund transfers to four other undisclosed jurisdictions.

    The article also noted that the Offshore Tax Informant Program received over 3,000 tips as of October 31, resulting in almost 200 audits and 124 active files under review.

    In addition to these activities, a November 14, 2016 Huffington Post article indicated CRA identified 2,600 documents with a Canadian link, opened 85 investigations into Canadians, and has commenced 60 audits with respect to the Panama Papers.

     

    Action Item: If transferring funds offshore, retain appropriate documentation in case of CRA review.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Read More
  • TAXPAYER RELIEF: Financial Hardship
    Posted

    CRA may grant relief from penalties and interest in cases where the timely satisfaction of a tax obligation was not completed due to:

    • extraordinary circumstances;
    • actions of the CRA; or
    • inability to pay or financial hardship.

    In a March 31, 2016 Federal Court Judicial Review, the taxpayer appealed a decision by CRA to refuse relief on penalties and interest.  In this case, the taxpayer argued that the CRA agent did not reasonably appreciate the taxpayer’s financial difficulties.

    The Court agreed with CRA that the concept of financial difficulties for a person is a financial insecurity or lack of what is necessary to meet basic living needs (that is food, clothing, housing, and reasonable non-essential elements).

    As it appeared that the taxpayer was able to repay the outstanding tax arrears, without having an undue impact on a lifestyle of a relatively affluent Canadian taxpayer, CRA’s decision to deny the request was deemed reasonable.

    CRA has also noted that relief may be granted:

    • when collection had been suspended due to an inability to pay and substantial interest has accumulated or will accumulate;
    • when a taxpayer’s demonstrated ability to pay requires an extended payment arrangement. Consideration may be given to waiving all or part of the interest for the period from when payments start until the amounts owing are paid, as long as the agreed payments are made on time and compliance with the Act is maintained.

     

    Action Item: In addition to financial hardship, some of the more common reasons why taxpayer relief may be granted include: natural or human-made disaster; death/accident/serious illness/emotional or mental distress; or civil disturbance. If one of these situations apply, an application for interest and penalty relief may be available. Note that taxes would still be owing.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    CRA may grant relief from penalties and interest in cases where the timely satisfaction of a tax obligation was not completed due to:

    • extraordinary circumstances;
    • actions of the CRA; or
    • inability to pay or financial hardship.

    In a March 31, 2016 Federal Court Judicial Review, the taxpayer appealed a decision by CRA to refuse relief on penalties and interest.  In this case, the taxpayer argued that the CRA agent did not reasonably appreciate the taxpayer’s financial difficulties.

    The Court agreed with CRA that the concept of financial difficulties for a person is a financial insecurity or lack of what is necessary to meet basic living needs (that is food, clothing, housing, and reasonable non-essential elements).

    As it appeared that the taxpayer was able to repay the outstanding tax arrears, without having an undue impact on a lifestyle of a relatively affluent Canadian taxpayer, CRA’s decision to deny the request was deemed reasonable.

    CRA has also noted that relief may be granted:

    • when collection had been suspended due to an inability to pay and substantial interest has accumulated or will accumulate;
    • when a taxpayer’s demonstrated ability to pay requires an extended payment arrangement. Consideration may be given to waiving all or part of the interest for the period from when payments start until the amounts owing are paid, as long as the agreed payments are made on time and compliance with the Act is maintained.

     

    Action Item: In addition to financial hardship, some of the more common reasons why taxpayer relief may be granted include: natural or human-made disaster; death/accident/serious illness/emotional or mental distress; or civil disturbance. If one of these situations apply, an application for interest and penalty relief may be available. Note that taxes would still be owing.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

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  • T4/T5 filing deadline
    Posted

    The T4/T5 filing deadline is fast approaching!

    Be sure to provide your accountant with all relevant documents to make sure that your T4s, T5s and other slips are filed on time to avoid penalties.

    The T4/T5 filing deadline is fast approaching!

    Be sure to provide your accountant with all relevant documents to make sure that your T4s, T5s and other slips are filed on time to avoid penalties.

    Read More
  • OBJECTIONS: Not so Fast
    Posted

    When filing an objection to a CRA reassessment, one of the most frequently-posed questions is “How long will it take?”. The answer, according to the Auditor General, is “too long”.

    On November 29, 2016, the Auditor General released a report to Parliament focusing on the effectiveness and timeliness of the objection process.

     

    Length of Process

    For the five-year period ending March 31, 2016, CRA took the following numbers of days, on average, to resolve objections from the time they were filed by the taxpayers:

    • 143 days for low-complexity objections (about 61% of total objections for the period);
    • 431 days for medium-complexity objections (about 37% of total objections for the period); and
    • 896 days for high-complexity objections (about 2% of total objections for the period).

     

    On average, CRA did not assign an objection to an appeals officer until 150 days after the taxpayer had mailed the notice of objection.

    CRA’s performance was also compared to six other administrations using 2009 data. Canada took 276 days compared to an average of 70 days for the other six countries.

    It was also noted that the tracking system for timing the process was not sufficiently accurate or complete.

     

    Objection Decision Results

    Of the objections accepted and processed by CRA, 65% were decided in favour (in whole or part) of the taxpayer. 0.6% of objections resulted in an increase in income tax owed.

     

    Next Steps

    In the Fall of 2016, CRA commenced a review of its objections process. As an immediate response, CRA indicated that it will implement the standard to respond to taxpayers on low-complexity objections within 180 days, 80% of the time. Also, beginning in the 2017-2018 year, as part of the initial step when objections are received and screened, taxpayers will be contacted (if necessary) to provide missing information to ensure the file is complete when assigned for resolution.

     

    Action Item: As it will likely take a long time to complete an objection, a significant amount of interest on the tax liability may accumulate. Consider making an earlier payment to reduce the interest cost in the event that the objection is not successful. If it is successful, the CRA will pay interest to the taxpayer, albeit at a lower rate.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    When filing an objection to a CRA reassessment, one of the most frequently-posed questions is “How long will it take?”. The answer, according to the Auditor General, is “too long”.

    On November 29, 2016, the Auditor General released a report to Parliament focusing on the effectiveness and timeliness of the objection process.

     

    Length of Process

    For the five-year period ending March 31, 2016, CRA took the following numbers of days, on average, to resolve objections from the time they were filed by the taxpayers:

    • 143 days for low-complexity objections (about 61% of total objections for the period);
    • 431 days for medium-complexity objections (about 37% of total objections for the period); and
    • 896 days for high-complexity objections (about 2% of total objections for the period).

     

    On average, CRA did not assign an objection to an appeals officer until 150 days after the taxpayer had mailed the notice of objection.

    CRA’s performance was also compared to six other administrations using 2009 data. Canada took 276 days compared to an average of 70 days for the other six countries.

    It was also noted that the tracking system for timing the process was not sufficiently accurate or complete.

     

    Objection Decision Results

    Of the objections accepted and processed by CRA, 65% were decided in favour (in whole or part) of the taxpayer. 0.6% of objections resulted in an increase in income tax owed.

     

    Next Steps

    In the Fall of 2016, CRA commenced a review of its objections process. As an immediate response, CRA indicated that it will implement the standard to respond to taxpayers on low-complexity objections within 180 days, 80% of the time. Also, beginning in the 2017-2018 year, as part of the initial step when objections are received and screened, taxpayers will be contacted (if necessary) to provide missing information to ensure the file is complete when assigned for resolution.

     

    Action Item: As it will likely take a long time to complete an objection, a significant amount of interest on the tax liability may accumulate. Consider making an earlier payment to reduce the interest cost in the event that the objection is not successful. If it is successful, the CRA will pay interest to the taxpayer, albeit at a lower rate.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

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  • PAYROLL ADVANCES: Tax Consequence
    Posted

    In an April 26, 2016 Technical Interpretation, CRA opined that where an employer provides a payroll advance to an employee, the amount is not generally considered to be a loan. A salary advance is a payment for salary, wages or commissions that an employee is expected to earn in the performance of future services. These amounts are generally included in the employee’s income in the year the advance is received.

    If a repayment by the employee is required, a deduction is available in the tax year in which the repayment was made. The deduction cannot exceed the advance that was previously included in the employee’s income from employment.

    Action Item: When providing an advance to an employee, ensure that the employee clearly understands the tax implications.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    In an April 26, 2016 Technical Interpretation, CRA opined that where an employer provides a payroll advance to an employee, the amount is not generally considered to be a loan. A salary advance is a payment for salary, wages or commissions that an employee is expected to earn in the performance of future services. These amounts are generally included in the employee’s income in the year the advance is received.

    If a repayment by the employee is required, a deduction is available in the tax year in which the repayment was made. The deduction cannot exceed the advance that was previously included in the employee’s income from employment.

    Action Item: When providing an advance to an employee, ensure that the employee clearly understands the tax implications.

     

     

    This publication is produced by Andrews & Co. as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors.

    Read More