Canadian Tax News – CPA Canada

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December 12, 2022

In case you missed it

As we wrap up 2022, here is a summary of some significant tax developments that took place in the second half of the year. (See our July 19, 2022 In case you missed it news item for the last time we provided this round-up.) For ease of access, we’ve included the original news items referenced here in the attached PDF.

Reporting requirements for trusts – The original proposals introduced in 2018 were expanded to include bare trust arrangements. The application of the rules was recently deferred and will now apply to trust taxation years ending after December 30, 2023. See our November 7, 2022 news item.

Mandatory reporting – The effective date of the Reportable Transaction and Notifiable Transaction proposals will be delayed until the date the implementation bill receives Royal Assent. The Uncertain Tax Treatment proposals will apply to taxation years beginning after 2022 as previously announced. See our November 4, October 6, and August 22, 2022 news items.

Tax-Free First Home Savings Account (FHSA) – As part of Budget 2022, the government introduced the new FHSA and, subsequently, revised legislation on the new program was released as part of Bill C-32 (Fall Economic Statement Implementation Act, 2022). Contrary to the original program details in Budget 2022, the latest version of the legislation allows account holders to make use of both the Home Buyers’ Plan and the FHSA to fund the same qualifying home purchase. See our November 11, 2022 news item as well as our blog.

Canada Revenue Agency (CRA) Campaign Focusing on Personal Service Businesses (PSB) – The CRA announced a new campaign focused on PSBs earlier this year. The campaign concentrates primarily on industries that commonly hire service providers who may operate a PSB including trucking, IT consulting, accounting, construction and catering. We understand that the campaign is still underway.

Electronic Notices of Assessments (ENOA) – In Budget 2021, the government proposed legislation that would allow the CRA to provide a notice of assessment (NOA) electronically to an individual who filed their personal income tax return electronically, and has authorized that notices or other communications may be made available in this manner. The original proposals would have affected EFILERs as they would be required to provide NOAs to their clients not using CRA’s My Account. It is our understanding that any changes to the process for issuing personal NOAs will be deferred until at least 2024. See our August 22, 2022 news item.

Excessive Interest and Financing Expenses Limitations – Revised draft legislation was released and is subject to a consultation period that ends on January 6, 2023. It is now proposed that these rules will apply to taxation years beginning on or after October 1, 2023.

In addition to these major developments, some other notable developments that occurred in the latter part of 2022 included:

• Canada Emergency Business Account (CEBA) – Eligibility notices and tax treatment of repayments (November 16, 2022 news item)
• Updated CRA taxable benefit guidance on social events, gifts and awards (November 15, 2022 news item)
• The 2022 Fall Economic Statement that included updates on a number of tax measures and, in particular, a brief update on the OECD Pillar 1 and 2 initiatives (November 4, 2022 news item)
• New questions and answers on Form T1134 (October 26, 2022 news item)
• New process for EFILE authorization requests for My Business Account access (October 7, 2022 news item)
• Questions on the new Form T2054 – Election for a Capital Dividend Under Subsection 83(2) (September 12, 2022 news item)

We know that many are watching for developments related to Bill C-208 that dealt with intergenerational transfers, but there have been no updates at the time of writing.

We’ll continue posting important and relevant news updates on this page so be sure to bookmark this page and check back often. Happy holidays and all the best for 2023.