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TAX BULLETIN - ARCHIVES 2013
  • Extract from  Canada Revenue Agency web site in connection with interest rates for the fourth calendar quarter of 2013:
    • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 2%.
       
  • Extract from a News Release by Canada Revenue Agency about the new requirements for Canadians with offshore property:
    • The criteria for those who must file a Foreign Income Verification Form (T1135) has not changed; however, the new form has been revised to include more detailed information on each specified foreign property. Increased reporting requirements include: the name of the specific foreign institution or other entity holding funds outside Canada, the specific country to which the foreign property relates and the income generated from the foreign property.
    • In addition to the new filing requirements, Economic Action Plan 2013 proposed other strong new measures to combat international tax evasion and aggressive tax avoidance. These include: the new Stop International Tax Evasion Program, the mandatory reporting of international electronic funds transfers over $10,000 to the CRA and streamlining the judicial process that provides the CRA authorization to obtain information from third parties such as banks.
       
  • Extract from  Canada Revenue Agency web site in connection with interest rates for the third calendar quarter of 2013:
    • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 1%.
       
  • Here's a link which might interest anybody residing in the USA on a part time basis: http://cpa-quebec.com/are-you-in-good-standing-with-the-irs
     
  • Extracts from the Budget in Brief and of the Budget Plan by the Minister of Finance of Canada:
    • tax relief by extending the temporary accelerated capital cost allowance for new investment in machinery and equipment in the manufacturing and processing sector for an additional two years
    • increases support for small business owners, farmers and fishermen by raising the Lifetime Capital Gains Exemption to $800,000 and indexing the new limit to inflation
    • further extending the application of Canada’s thin capitalization rules—which limit the amount of Canadian profits that can be distributed to certain non-resident shareholders as deductible interest payments—to Canadian resident trusts and non-resident entities
    • extending the normal reassessment period by three years for taxpayers who have failed to report income from a specified foreign property on their annual income tax return and failed to properly file the Foreign Income Verification Statement (Form T1135)
    • requiring certain financial intermediaries, including banks, to report to the CRA their clients’ international electronic funds transfers of $10,000 or more
    • new Stop International Tax Evasion Program through which it will be able to pay rewards to individuals with knowledge of major international tax non-compliance. The reward will be a percentage of tax collected as a result of information provided
    • adjust the gross-up factor applicable to non-eligible dividends from 25 per cent to 18 per cent and the corresponding DTC from 2/3 of the gross-up amount to 13/18. Expressed as a percentage of the grossed-up amount of a non-eligible dividend, the effective rate of the DTC in respect of such a dividend will be 11 per cent
    • new penalty of $1,000 be imposed in respect of each SR&ED program claim for which the information about SR&ED program tax preparers and billing arrangements is missing, incomplete or inaccurate. In the case where a third-party SR&ED program tax preparer has been engaged, the SR&ED program claimant and tax preparer will be jointly and severally, or solidarily, liable for the penalty
       
  • Extract from  Canada Revenue Agency web site in connection with interest rates for the second calendar quarter of 2013:
    • The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 1%.
       
  • Extract from CCH Tax Reference Booklet 2012-2013

    Combined Personal Income Tax Rate - Quebec (2012)

    Taxable Income
    $
    Average Rate  %                   Marginal Rate
    Interest & Other Income
    %
     Capital Gain
    %
    Canadian Dividends
    Eligible
    %
    Other Than Eligible
    %
    10 822 0.0 12.53 6.26 -0.02 à 0.00 1.74
    13 656 2.6 28.53 14.26 5.64 à 5.66 11.74
    40 100 19.7 32.53 16.26 11.16 à 11.18 16.74
    42 707 20.5 38.37 19.19 19.22 24.05
    80 200 28.8 42.37 21.19 24.74 29.05
    85 414 29.7 45.71 22.86 29.35 33.22
    132 406 35.4 48.22 24.11 32.81 36.35

    Combined Personal Income Tax Rate - Ontario (2012)
     
    Taxable Income
    $
                     Marginal Rate
    Interest & Other Income
    %
    Capital Gain
    %
    Canadian Dividends
    Eligible
    %
    Other Than Eligible
    %
    9 405 0.00 2.53 -1.86 à 0.00 .69
    10 822 20.05 10.03 -1.89 à 0.00 2.77
    39 020 24.15 12.08 3.77 à 3.80 7.90
    42 707 31.15 15.58 13.43 16.65
    68 719 32.98 16.49 14.19 17.81
    78 043 35.39 17.70 17.52 20.82
    80 963 39.41 19.70 19.88 23.82
    85 414 43.41 21.70 25.40 28.82
    132 406 46.41 23.20 29.54 32.57
    500 000 47.97 23.98 31.69 34.52

    Combined Corporate Income Tax Rate - Quebec (December 31 Tax Year)

      2013
    %
    2012
    %
    Income eligible to SBD 19.00 19.00
    Investment income of a CCPC    
    - Net of dividend tax refund 19.90 19.90
    -  Without dividend tax refund 46.57 46.57
    Other income 26.90 28.40
  • Extracts from the web site of Department of Finance of Canada in connection with 2013 Automobile Deduction Limits and Expense Benefit Rates for Business:
    • The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000 (plus applicable federal and provincial sales taxes) for purchases after 2012.
    • The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business  will increase to 54 cents per kilometre for the first 5,000 kilometres driven and 48 cents for each additional kilometre.
       
  • Changes to the QST system. The QST is currently calculated on the selling price plus the GST. Starting January 1, 2013, however, the QST will apply directly to the selling price not including GST. To ensure the total taxes payable remain the same, the QST rate will rise from 9.5% to 9.975%.
     
  • Limits and Rates Related to the QPP for 2013: The limits and rates related to the Québec Pension Plan (QPP) for 2013 are as follows:
    • The maximum pensionable earnings have been increased from $50,100 to $51,100.
    • The basic exemption is $3,500.
    • The maximum contributory earnings have been increased from $46,600 to $47,600.
    • The contribution rate has been increased from 5.025% to 5.10% for both employers and employees.