Many of the important tax figures have been substantially increased for 2023 thanks to the Covid-19 developments and high inflation. Canadian taxpayers should be aware of some major tax changes when preparing their personal income tax returns in 2023.
In order to increase the transparency of how trusts are used, and on the persons who have created, control and benefit from trusts, the 2018 federal budget proposed new reporting requirements for trusts. The changes are meant to improve the collection of beneficial ownership information with respect to trusts and to help the Canada Revenue Agency (CRA) assess the tax liability of trusts and their beneficiaries.
A non-resident may buy and sell property in Canada. A non-resident may even earn income on an investment property in Canada by turning it into a rental property. Tax on non-residents of Canada are treated separately from permanent residents and Canadian citizens at the time of real properties transactions by the Canada Revenue Agency.
Here’s what you need to know about buying and selling property as a non-resident in Canada.
When a taxpayer moves from his/her principal home into a new home and rents the old home out, or converts part of the home for a different purpose. Alternatively, he/she may move into one of his/her rental properties and turn it into a principal home. While this may not be an issue if the change is short term and temporary, a permanent change could give rise to a deemed disposition of the property for tax purposes. If not carefully managed, this deemed disposition can create undesirable results for these taxpayers.
Foreign companies selling goods and services online in Canada will soon need to contend with new GST/HST rules for e-commerce transactions. With many Canadians locked down due to the COVID-19 pandemic in the past year, the number of us shopping online skyrocketed. In fact, the Government of Canada’s recent Fall Economic Statement says that retail e-commerce rose by nearly 70 per cent in the first eight months of 2020. But the current sales tax rules for digital transactions date back to a time when our economy was strictly bricks-and-mortar, and the government is concerned that the existing rules put Canadian businesses at a disadvantage compared to their foreign competitors. In its 2020 Fall Economic Statement, the federal government invited feedback on proposed legislation that aims to ensure the GST/HST applies fairly and effectively to the growing digital economy.
There has been speculation ahead of each federal budget in recent years that the Liberal government will increase the so-called capital gains inclusion rate, currently at 50 per cent, which is the percentage of capital gains included in taxable income. However, advisors say the unprecedented spending on COVID-19 programs, which has pushed the projected size of the deficit to almost $400-billion, makes a capital gains tax increase more likely.