Photo by cottonbro from Pexels As some businesses struggle with cash flow, they may be motivated to prioritize suppliers and other creditors ahead of CRA. A recent court case demonstrates CRA’s power to collect tax arrears and the impact of CRA exercising this power on a business. In a June 11, 2021 Court of Queen’s Bench of Alberta case, the taxpayer had fallen into arrears in respect of both GST/HST and payroll remittances. Payment arrangements were entered into…

CERS provides support to businesses by covering a portion of rent and property ownership costs of qualifying property. The government has recently extended access to this program until October 23, 2021. The CERS program has the following two components: The base CERS subsidizes eligible expenses based on the applicant’s revenue decline compared to pre-pandemic earnings; and, The lockdown support component, which provides an additional subsidy for eligible applicants subject to a lockdown under a public…

Special attribution rules prevent the shifting of income between certain related people (including a spouse, parent, grandparent, sibling, uncle or aunt). Consider the situation where high-earning Spouse A gives investments to low-earning Spouse B so that investment income can be taxed at Spouse B's lower tax rate. The attribution rules prevent this by requiring the earnings to be taxed in the hands of the transferor, Spouse A. However, these rules do not apply where the…

General CRA activity Over the last few years, CRA has focused on purchases and sales within the real estate sector. They are reviewing transactions for several items, such as: property flips on account of income;ineligible principal residence claims;commissions on sales;pre-sale condo assignments; andeligibility for the GST/HST new housing and rental rebates. One method for reviewing such transactions is by requiring taxpayers to respond to a detailed questionnaire. The questionnaire covers items such as: date and…

In an April 14, 2020 French Technical Interpretation, CRA was asked whether amounts paid to an employee for costs of equipment for working remotely would be a taxable benefit. Generally, a reimbursement for a personal purchase of equipment used for working remotely would be a taxable benefit. However, CRA noted that in the context of the COVID-19 pandemic, which has required many employees to work remotely, acquisition of computer equipment may be primarily for the…