Tax Season is officially here! Read more for recent updates and everything you need to know about the Federal Budget.

New technology slowing Canada's desire for paper money

Reports have determined that there has been a 21 per cent decline of cash payment transactions in Canada since 2012. Back in November 2018, the new $10 bill was released; featuring Canadian civil rights activist Viola Desmond. This is the first time in history that a Canadian woman was to be featured on a circulating banknote. Unfortunately, there will be fewer people to recognize this as more and more Canadians are veering away from cash transactions as digital payments continue to evolve.

Retail industry Expert and University of Toronto Professor David Soberman states that this change is being driven by both convenience and cost. He even points out other industries who have gone cashless almost entirely; Uber and Spotify. Both of which use in-app purchases. Even business owners are deciding to go cashless as the efficiency is far greater than operating with cash. In Toronto, Creeds Coffee Bar made this transition at the start of 2019. The owner, Jonah Creed stated that they would constantly worry about running out of cash, balancing their tills, and having an employee at the register. Being cashless now allows them to serve their customers quicker.

In 2018, Sweden made global news as thousands in the country inserted microchips into their hands in order to make their day to day transactions easier. This includes storing their train tickets, to even using their key cards to get in to their offices. Although Canada may not be at this stage, mobile payment is still on the rise. Some popular payment apps include, Apple Pay Canada, Google Pay Canada, Samsung Pay Canada, PayPal Canada and finally; Starbucks Canada.

https://www.cpacanada.ca/en/news/canada/2019-01-23-cashless-canada?utm_source=CPACanadaNewsletter&utm_medium=email&utm_campaign=MemberNews

Recent amendments to the Canada Business Corporations Act

Back in October 2018, amendments to the Canada Business Corporations Act (CBCA) were introduced. These amendments received royal assent on December 13, 2018 and will come affect as of June 13,2019. Each private CBCA corporation is now required to prepare a register (list) of all individuals who have significant control over the corporation. This would include individuals who are beneficial shareholders in the company and have the ability to impact the corporation in a major way. According to the government, the reason for these new rules is to assist with combating tax evasion, money laundering, and terrorism financing. 

To outline some of these rules:

• To qualify as a significant individual of a CBCA Corporation, the individual must be a registered or beneficial owner of the corporation, have direct or indirect control and to be specific; the individual would have  either 25% or more of the voting rites, and/or 25% or more of all the corporation's shares measured by fair market value.
• Two individuals can be considered as individual's with significant control rather than just one, if they have an agreement to act jointly or are joint owners.
• The Corporation is required to annually identify it's individuals with significant control,and furthermore it is mandatory to record these updates within 15 days of any change.
• If the Corporation requests the related information from a shareholder, this shareholder has the obligation to reply promptly and accurately to the best of their knowledge.

The information that will be required of the significant individual is as follows:

• Name, date of birth and last known address.
• The day that the individual obtained significant influence over the company
• A description of their interests and rights in accordance with the shares of the corporation
• The "jurisdiction of residence for tax purposes" for each specified individual

Failure to comply with these rules has potential penalties of up to $200,000 or 6 months jail time, or even both. 

Budget 2019

This year's Federal Budget was about spending and not about tax. All budgets have tax measures and here are the highlights.

Personal Tax Initiatives:

Stock Options

• Currently, employees receiving stock options are taxed similar to capital gains
• Budget proposes to change this treatment for benefits realized in excess of $200,000 annually, now will be treated as regular employment income if earned from large, well established companies
• Full details are to be released summer 2019

Canadian Training Credit

• Refundable credit equivalent to the lesser of:
  • a) Tuition fees paid in the year
  • b) Individuals “training amount limit” balance for the year
• Training limit balance is a notional amount equal to $250 per year to a maximum of $5000 in one’s lifetime
• An individual is eligible for the credit if:
  • a) they are resident in Canada throughout the preceding year
  • b) files an income tax return
  • c) older than 25 years of age and under 65
  • d) has working income, scholarship income and employment benefits for parental leave greater than $10,000
  • e) total income does not exceed the top of the third tax bracket limit

• Note than tuition fees are not eligible if paid to a university/college outside of Canada

Home Buyers Plan

• Amount that can be withdrawn from an RRSP to purchase a first home is increasing to $35,000 from $25,000 effective after March 19, 2019
• The eligibility for the HBP has expanded to include individuals who are living separate and apart from their spouse due to a marriage breakdown. Certain conditions must be met to be eligible

Medical Expenses

• Cannabis has now been added to the list of allowable medical expenses
• To be eligible however, it must be purchased from a licensed vendor and the patient must have a “qualifying medical document”

Corporate Tax Initiatives

Zero emission vehicles 

• enhanced deduction of 100% of the acquisition price in the purchase year has been granted
• The vehicle must be acquired on or after March 19, 2019 and before 2028
• The deduction starts to be phased out in 2023 and will be gone by 2028
• The purchase price eligible for full deduction is $55,000 plus taxes or less
• The tax payer has the option to stay with regular depreciation rates if desired

There are additional changes in the budget but the above mentioned represent the broadest reaching measures.