Corporate Income Tax, Personal Income Tax

2017 Federal Budget Commentary

The Federal Liberal government released their budget on March 22, 2017.  The government will be spending an additional $523.9 million over 5 years on tax evasion and compliance improvements, with a hope of $2.5 billion in additional taxes recovered.

CPA Canada has highlighted a number of items in the 2017 Federal Budget.

Businesses

  • A commitment to review tax planning using private corporations for things such as: income sprinkling, holding investments, and conversion of regular income into capital gains
  • Professionals will no longer be required to include work in process when computing business income
  • The definition of “de facto” control has been broadened beyond just the ability to change the board of directors or direct influence over shareholders
  • T4 slips can now be distributed electronically (with proper safeguards) without explicit approval from employees
  • Mark-to-market methods will be allowed in recognition of gains and losses on derivatives, as well as the introduction of a specific “stop-loss” rule pertaining to derivatives
  • New capital asset classes 43.1 and 43.2 allow for accelerated CCA on geothermal energy equipment as well as the ability to provide investors a tax credit through a flow-through share mechanism
  • The mining exploration tax credit for flow-through share investors has been extended again
  • Certain oil exploration costs will no longer be eligible for the CEE which is 100% deductible, instead falling into CDE, which is only 30% deductible each year
  • Elimination of non-resident GST/HST rebate for tour package accommodations after a transition period ending January 1, 2018

Individuals

  • Tuition tax credit now available for occupational skills courses taken at post-secondary institutions
  • Caregiver credit system has been simplified for dependent relatives and spouse/common-law partners and minor children
  • Disability tax credit can now be certified by a nurse practitioner
  • Fertility related expenses are now explicitly allowed for medical expenses
  • Public transit tax credit will be eliminated for transit after June 30, 2017
  • New rules on anti tax avoidance for RESPs and RDSPs
  • MLAs are now required to include certain allowances in their income
  • First-time donor super credit will be eliminated after 2017

Click here for the full CPA Canada Federal Budget Commentary 2017

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s