On April 26, 2021, CRA updated their website to provide additional guidance on U.S. issues:
“Example: Application of supplemental guidance to Canadian-resident cross border workers” has been added which includes 7 more examples and questions.
“Examples: Other issues” has been added which includes 9 more examples and questions.
On April 1, 2021, CRA updated its guidance on international issues related to Covid-19. CPA Canada submitted 20 questions in respect of the changes. CPA Canada has now posted CRA’s response. The questions covered areas such as definitions of “travel restrictions” and “usual resident of another country”.
On April 21, 2021, CRA updated their CEWS FAQ to provide additional commentary on amending applications after the applicable deadline has passed. Previously, CRA had stated that upward adjustments (increases to claims) subsequent to the deadline would not be permitted, however, this new guidance provides parameters in which they would be. The CERS website notes that these comments would apply to CERS claims as well.
CRA’s detailed responses include:
The CRA will accept your late-filed amended wage subsidy application in certain circumstances.
If you determine that you received a wage subsidy amount in excess of what you are entitled to then you can submit an amended application to reduce your wage subsidy amount (referred to as a downward adjustment) at any time, even after the deadline for the particular claim period. You can submit your amended application using My Business Account or Represent a Client, or by calling Business Enquiries if you filed via the web application.
If, after the deadline for a claim period has passed, you determine that you might have been entitled to a higher wage subsidy amount than what you previously claimed for that claim period, contact the CRA Business Enquiries phone line to see if you are eligible to file an amended application to increase the wage subsidy amount (referred to as an upward adjustment) after the applicable deadline. If you are eligible, you can then submit your amended application using My Business Account or Represent a Client, or by obtaining further direction from Business Enquiries if you filed via the web application.
The circumstances in which the CRA may accept your amended application for review after the filing deadline include:
You made an error in filing your wage subsidy application prior to the filing deadline as a result of an arithmetic error, transposition error, or unintended omission of additional business activities or employment expenses;
You relied upon inaccurate information provided to you inadvertently by the CRA that directly affected your ability to file your amended wage subsidy application on time;
There was an identified outage of CRA secure portals that prevented you from filing the amended application prior to the applicable deadline; or
There was undue delay on the part of the CRA in processing an application or providing required guidance impacting the particular application.
Furthermore,
The upward adjustment request is not the result of professional advice the fee structure for which was dependent on the upward adjustment amount; and
The late-filed amended wage subsidy application request for an upward adjustment was made to the Business Enquiries phone line within 30 calendar days following the later of:
April 21, 2021; and
The applicable filing deadline.
In the case of late-filed amended wage subsidy application that is accepted for review through the secure portal, and after the review is either accepted, adjusted or denied, a Notice of Determination will be issued to you by the CRA. Please see Q #36 for an explanation of your recourse rights when you receive a Notice of Determination.
If your late-filed amended wage subsidy application was rejected for review by the CRA and not processed through the secure portal because you did not meet one of the above noted criteria, you may then seek a further review by submitting your request online by logging into My Business Account and selecting “Register a formal dispute”.
The CRA will accept your late-filed wage subsidy original application only in exceptional circumstances. You must make every attempt to file your wage subsidy application on or before the deadline. If, however, you determine that you are entitled to a wage subsidy amount for a particular claim period for which you did not file an application on or before the applicable filing deadline, contact the CRA Business Enquiries phone line to see if you are eligible to file the application after the applicable deadline. If you are eligible, you can then submit your late-filed application using My Business Account, Represent a Client or via the web application.
The circumstances in which the CRA may accept your original application for review after the filing deadline include:
It is evident that you attempted to file your application before the applicable deadline but there was an identified outage of CRA secure portals that prevented you from filing the application prior to the applicable deadline;
It is evident that you attempted to file your application before the applicable deadline but your specific account was temporarily suspended or there was some other account limitation that prevented the filing of the application prior to the applicable deadline;
It is evident that you attempted to file your application before the applicable deadline, and there was undue delay on the part of the CRA in receiving and processing your wage subsidy application before the deadline; or
You relied upon inaccurate information provided to you inadvertently by the CRA that directly affected your ability to file your original wage subsidy application on time.
Furthermore,
The late filed wage subsidy claim is not the result of professional advice the fee structure for which was dependent on the claim amount; and
The late-filed wage subsidy application request was made to the Business Enquiries phone line within 30 calendar days following the later of:
April 21, 2021; and
The applicable filing deadline.
In the case of a late-filed wage subsidy application that is accepted for review through the secure portal, and after the review is either accepted, adjusted or denied, a Notice of Determination will be issued to you by the CRA. Please see Q #36 for an explanation of your recourse rights when you receive a Notice of Determination.
If your late-filed wage subsidy application was rejected for review by the CRA and not processed through the secure portal because you did not meet one of the above noted criteria then you may seek a further review by submitting your request online by logging into My Business Account and selecting “Register a formal dispute”.
The 2021 Federal Budget has now been released, and it was a doozy (weighing in at 724 pages)!
After a long evening of analysis, the VTN team has come up with this top ten list of areas for accountants and small business advisors:
1) CEWS & CERS: Both programs are extended for four more periods, ending September 25, 2021. The rates will be gradually reduced over the last three periods. A special provision has been added to claw back claims of publicly listed entities whose executives’ earnings increased in 2021 as compared to 2019.
2) New Hiring Incentive: The Canada Recovery Hiring Program (CRHP) will provide a 50% subsidy for eligible remuneration paid in excess of that paid in a baseline reference period. The program lasts for six periods and commences June 6, 2021. The percentage is reduced over the last three periods. A revenue decline of over 0% is needed for the first period, over 10% for the remainder. The greater of CRHP or CEWS can be claimed, but not both.
3) Accelerated CCA Claims: Many depreciable assets will be eligible for a 100% write-off if purchased on or after Budget Day, and if they become available for use before January 1, 2024. There is a $1.5 million limit per associated group. Certain long-term assets, like buildings, are not eligible.
4) Zero-Emission Technology Manufacturers: The federal corporate tax rate would be cut in half starting with fiscal years commencing in 2022.
5) Canada Recovery Benefit and Related Programs: These programs will be extended.
6) Expansion of Current Credits/Benefits: Expanded access to, and value of, a number of personal measures, including, the Disability Tax Credit, Canada Workers Benefit, Northern Residents Deductions, and Old Age Security.
7) COVID-19 Benefit Repayment, Timing of Deduction: Individuals will have the option to claim a deduction in respect of the repayment of a COVID‑19 benefit amount for the year when the benefit was received, rather than the year in which the repayment was made.
8) Tax on Select Luxury Goods: A tax on the retail sale of new luxury cars and personal aircraft priced over $100,000, and boats priced over $250,000, will be introduced, effective January 1, 2022.
9) Mandatory Disclosure Rules: While past Budgets have proposed specific anti-avoidance provisions, Budget 2021 proposes broad-based disclosure requirements for tax strategies considered aggressive by the government.
10) Foreign Owner’s Tax on Real Estate: A new national 1% tax on the value of vacant or underused real estate owned by non-resident, non-Canadians would be introduced. The tax would be levied annually beginning in 2022. Annual filings would be required as of 2023.
Bonus Item!
Electronic Communication between CRA and Taxpayers: Individuals will receive electronic Notices of Assessment where they (or their tax preparer) files their return electronically. Businesses using My Business Account will default to online mail. More tax, GST/HST and information returns will be required to be filed electronically. Electronic payments will be required for all amounts of $10,000 or more.
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Over the past few days a number of articles have been published listing items that have been leaked or expected to be in today’s Federal Budget, to be tabled at 4:00 p.m. EDT. Many of the items were included in throne speeches or included in election platforms. They include:
no capital gains rate or principal residence changes
no wealth tax
luxury tax on items like yachts (new cars and private aircraft valued at more than C$100,000)
extension of wage and rent subsidy programs to the autumn
introduction of the Canada Recovery Hiring Program
taxation of vacant residential property owned by non-resident, non-Canadian owners
limitation of interest expense deduction, with exceptions for small businesses
introduction of national childcare program
closing loopholes and tackle tax evasion
sales tax for online platforms and e-commerce warehouses
digital services tax for Web giants
Sources and further information:
Canada's budget to include pandemic and childcare supports, luxury tax - Reuters
Freeland’s budget to include plans for $10-a-day child care, new hiring credit for employers - Globe and Mail
Canada to set aside C$12 bln to extend main pandemic supports in budget - National Post
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