TPS Tax and Accounting
700 Kerr St Unit, 201 L6K3W5 Oakville, ON, Canada

We love working with our clients. We are grateful for their trust in us to help them achieve their goals. We enjoy being a part of their journey. THANK YOU to everyone who voted for us! We are recognized for Best Accounting, Best Income Tax Prep and Kelly Ross, Best Accountant in Mississauga.

Are you eligible for The Canada Recovery Benefit (CRB)? Check out the exert from CRA below and click the link for further information. The Canada Recovery Benefit (CRB) gives income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance (EI) benefits. The CRB is administered by the Canada Revenue Agency (CRA). If you are eligible for the CRB, you can receive $1,000 ($900 after taxes withheld) for a... 2-week period. If your situation continues past 2 weeks, you will need to apply again. You may apply up to a total of 13 eligibility periods (26 weeks) between September 27, 2020 and September 25, 2021. https://www.canada.ca//serv/benefits/recovery-benefit.html #entertainmentnews #entertainmentindustry #entertainmentbusiness #entertainer #filmindustry #artsagram #artistsoninsta #filmmakeup #voiceover #behindthecamera #actingstudent #artstudent

Did you know the CEBA requirements and deadlines changed? Here is a little exert from the government of Canada related to this. As of October 26, 2020, eligible Canadian businesses that currently operating through a personal bank account will be able to apply for CEBA. All applicants now have until December 31, 2020, to apply for CEBA. *COMING SOON* CEBA support is being expanded from $40K to $60K. This expansion will be available to all eligible previous and new CEBA ...applicants. Stay tuned to the CEBA website for more details, including launch details in the coming weeks. If you have already applied for CEBA and have questions, please contact the CEBA Call Centre at 1-888-324-4201. An agent will return your call within 3 business days between Monday and Friday from 10:00 am to 9:00 pm EST For more detailed information, check out the government website at https://ceba-cuec.ca/

TPS has exciting news to share with our clients and friends! We have added a Toronto location to our family under the name Ross Professional Corporation. This location is primarily specialized in providing accounting to the arts and entertainment industry. Please join us in congratulating Kelly and the team! Check out www.rosspc.ca

This year, while it is logistically very different, we are feeling very grateful that we have our health and such wonderful friends and clients. Wishing you all health and happiness this season!

Great news on the extension of payment deadlines for individuals and corporations from CRA. Income tax payments have just been announced as extended to September 30th interest free! Please note this does not include HST payments. It does however include rules for existing debt, take a read at the link here: https://nam01.safelinks.protection.outlook.com/

Are you looking for a quick reference chart for whats happened to the most common filing deadlines and payment due dates? Tax a look at the picture below. In addition, full details from the CRA website are available at the following link: https://www.canada.ca///covid-19-filing-payment-dates.html

Attention Business Owners and Employers: CRA has launched a wage subsidy calculator today and announced that the portal to apply for this will be available Monday April 27th. https://www.canada.ca//services/subsidy/emergency-wage-sub

Help for families with children 12 and under: Remember to apply for the separate ontario benefit to help support parents with cost of support supplies for schooling at home right now. https://www.ontario.ca/page/get-support-families

Great news for corporate owners! Previously announced programs to help such as CERB (Canada Emergency Response Benefit) was not showing eligibility for corporate owners who received dividends only. The government has just announced that you now would be! .....as long as the dividends are non-eligible dividends (generally, those paid out of corporate income taxed at the small business rate). An individual could count this income towards the $5,000 income requirement to be... eligible for CERB. Please keep in mind the other criteria would still hold true for eligibility.

COVID Update: Finance Minister Morneau announcement today: Some further clarity on how to quantify thresholds for the 75% wage subsidy today was announced. 1) your company revenue for the month must be down at by 30% or more which is verifiable by the same months revenue from the year prior... 2) funds will be available (disbursed) in 6 weeks time to companies 3) the announcement was made that companies do not have to pay out the additional 25% in wages to employees if they are not able however they much attest that they will make every attempt to pay the additional 25% if able. 4) a repeat of previously announced amounts available for 75% wages subsidy - 75% of salary to max of 58,700 per employee, amounting to up to $847 per week per employee.

Just announced by government: 1) There is a retroactive to March 15 - 75% salary subsidy for small and medium sized businesses who qualify 2) Government loans up to $40k interest free for first year... 3) Deferral of GST/HST, duties until June

Clarifying confusion on COVID Tax measures announced: For individuals the return filing due date will be deferred until June 1, 2020. No change to Sole Proprietor or Corporation Filing Deadlines announced There is no relief from corporate filing deadlines, HST & Payroll filings, or any payments related to HST or Payroll (other than the 10% subsidy announced).... Taxpayers will have until September 1st to pay any income tax only (not HST or payroll tax) This includes balances due on income tax returns and any related instalment payments See more

NEW Government Announcement Today: The government announced today one emergency benefit to replace old ones previously mentioned for everyone who qualifies and earned rev 5K or more in last 12 months and have no revenue now due to COVID-19 this benefit would be 2K per month for 4 months more details are not available at this time on specific qualifications but could be available to you. So far timeline is that access to funds will be within 10 days of applying online portal opening soon likely available week of April 6th.....stay tuned!

If you have a business and want some further information on what was announced by the government, please see the link below: https://www.canada.ca//depart/economic-response-plan.html

Here is a link to summarize support to Canadians that was rolled out by the Canadian government: https://www.canada.ca//depart/economic-response-plan.html

The government is rolling out some great programs to help those impacted and in need due to COVID-19. Specific details on who qualifies and what they specifically get are still unclear. As these get clarified we will be letting you know and reaching out specifically to our clients we think that can benefit from these programs. Stay tuned.......

There may be some help coming to taxpayers....stay tuned for a possible announcement on this tomorrow which rumour has it may include an extension to tax deadlines and an interest free period for taxes due. https://nationalpost.com//government-extends-tax-deadline-

Deadline Reminder for all Companies: Your T slips, regardless of your year-end, are due end of February to the CRA annually. This includes T4s, T4As, T5s, etc. If you are unsure if you need to declare any, please let us know and we would be happy to help you determine this.

From our family to yours, Merry Christmas and Happy Holidays! We wish you health, happiness and prosperity in the new year ahead!

Thank you OAKVILLE for welcoming TPS to your city and voting us Readers Choice for Accounting and Income Tax Preparation!

Thank you Mississauga for voting us as your favourite for accounting firm and tax preparation for the 5th year in a row! We are truly grateful for your support and trust in us!

Join TPS Owner Kelly Ross in conjunction with The Oakville, Milton Real Estate Board for an informative workshop. Corporations including Business, Property & Management - OAKVILLE Seminar - FREE Date: Nov 21, 2019... Time: 9:30 AM - 11:30 AM Location: OMDREB OAKVILLE Office - 2nd Floor Classroom 125 Navy Street, L6J 2Z5 Oakville, ON Corporations including business, property and management corporations Timing to Incorporate a Business/Holding Company Tax Elections when moving an existing business from Sole Proprietor to Corporation Share Structures and Income Splitting Options to pay yourself out of a corporation Tax Strategies Intercompany Transactions Investing through your Corporation Bookkeeping Best Practices WORKSHOP LEADER: Kelly Ross, CPA, CGA at TPS Tax & Accounting https://members.omdreb.on.ca/mpower/event/loadevent.action

PREVIOUSLY ANNOUNCED INCOME TAX MEASURES Budget 2019 confirms the governments intention to proceed with previously announced income tax measures. Some of the key measures are summarized below. Measures from the Fall Economic Statement...Continue reading

Intergenerational Business Transfers The government will continue its initiative to develop new proposals to ensure that intergenerational transfers of businesses are better accommodated under the tax system. Budget 2019 specifically mentions Canadian farmers and fishers, but adds that this initiative also applies to other types of business owners.

Trusts Reporting Requirements Budget 2018 proposed extensive new reporting requirement for most family trusts, effective for returns required to be filed for 2021 taxation years.

INTERNATIONAL TAX MEASURES Cross-Border Securities Lending Securities lending occurs commonly in our capital markets, often seen when investors wish to short-sell securities that are expected to decrease in value. ... A Canadian resident might borrow the shares of a public company from a non-resident lender. The Canadian would be required to make compensatory payments to the lender equal to any dividends paid on the borrowed shares and might be required to post collateral to secure the return of identical shares to the lender. If the borrowing is fully collateralized (defined to mean at least 95 per cent of the value of the borrowed security is collateralized with money or government debt obligations) the compensatory payment is considered a dividend and is subject to the normal dividend withholding taxes. When not fully collateralized, the compensatory payment is treated as a payment of interest, which is not subject to withholding tax if paid to arms-length parties. The Act contains rules intended to ensure the lender is in the same tax position as if the securities had not been lent, including with regards to Canadian withholding taxes on compensatory payments. Canadian securities Where the borrowed security is a share of a Canadian corporation, the Budget proposes to treat all compensatory payments as dividends (regardless of whether fully collateralized). Thus, the dividend withholding rules will come into effect. Under these proposed rules, the lender is deemed to be the recipient of the dividend, the security issuer is deemed to be the payer of the dividend, and the lender is deemed to own less than 10 per cent of the votes and value of shares of the issuer, meaning that the five per cent withholding rate in many treaties will not be accessible and a higher (often 15 per cent) withholding rate will apply. The Budget also expands the application of these rules to specified securities lending arrangements, a concept introduced in 2018 to prevent the creation of artificial losses. Foreign securities Where the borrowed security is a share of a non-resident issuer (a foreign corporation), the current rules require withholding tax on the compensatory dividend payment. However, the non-resident lender would not have been subject to Canadian withholding tax on receipt of a dividend from the non-resident issuer corporation. As a relieving provision, the Budget proposes to expand the exemption for withholding (subsection 212.1(2.1)) to any dividend compensatory payment paid by a Canadian resident borrower to a non-resident lender where the arrangement is fully (95 per cent) collateralized. These new rules apply to payments made after March 19, 2019. For securities loans in place on March 19, 2019, the amendments apply to compensatory payments made after September 2019.

INTERNATIONAL TAX MEASURES Base Erosion and Profit Shifting (BEPS) Update No new legislative changes were announced related to BEPS. ... The government reaffirmed its commitment to actively participate in the OECDs BEPS initiatives. Canada is participating in the review of the country-by-country reports first exchanged in 2018 with other governments and tax authorities. The review is expected to be complete in 2020. The government reaffirmed its commitment to ratify and bring into force the Multilateral Convention to Implement Tax Treaty Related Measures to prevent BEPS (commonly known as the Multilateral Instrument or MLI).

INTERNATIONAL TAX MEASURES Transfer Pricing Order of application of transfer-pricing rules... Transfer-pricing rules in the Income Tax Act generally provide that, where a Canadian taxpayer transacts with non-arms-length parties outside Canada, the price used for the transaction must be established using the arms-length principle. That is, the parties must establish a price that is within the range that arms-length third parties would have used had they transacted under the same terms and conditions. The Income Tax Act contains other provisions which may require adjustment to the income reported on a transaction. Questions arose regarding whether adjustments were made pursuant to general transfer-pricing rules or other more specific provisions. In these situations, it was not clear whether transfer-pricing penalties were applicable. The Budget proposes that the transfer-pricing adjustments shall apply in priority to any other adjustments required under the Act. Presumably, any applicable transfer-pricing penalties will apply in these situations. Current exceptions to the transfer-pricing rules (for example subsection 17(8) which permits certain zero or low interest loans made to controlled foreign affiliates) are retained. This measure applies to taxation years commencing after March 19, 2019. Reassessment period for transfer-pricing transactions: The definition of transaction for transfer-pricing purposes is expanded beyond the normal meaning of that word. The Income Tax Act provides an extended three-year reassessment period beyond the usual reassessment period for transfer-pricing adjustments. However, the definition of transaction for reassessment purposes was not the expanded definition used for transfer-pricing purposes. The Budget proposes to use the expanded definition of transaction in determining whether that transaction can be reassessed in the extended three-year reassessment period. This measure applies to taxation years for which the normal reassessment period ends on or after March 19, 2019, meaning it applies to most transactions that have occurred in the last three to four years.

INTERNATIONAL TAX MEASURES Foreign Affiliate Dumping Canada provides a participation exemption (exempt surplus) on repatriation of earnings from foreign affiliates. Canada simultaneously provides interest deductibility for amounts borrowed to invest in shares of foreign affiliates. Additionally, in our tax treaties, Canada typically requires five per cent or more withholding tax on dividends paid by Canadian companies to foreign parent corporations. ... In the past, multinational parent companies wishing to extract surplus from a Canadian subsidiary could implement planning to sell or dump the shares of their non-Canadian subsidiaries to the corporation resident in Canada (CRIC) in exchange for cash and/or an interest-bearing vendor-take promissory note. The cash or promissory note paid was not subject to withholding tax. The interest on debt would shelter the taxable income of the Canadian operating company. Canada receives no withholding tax on the cash payment and reduced income tax on future business profit. Withholding tax would be collected if interest were paid on the vendor take-back note because the debt would be owed to a non-arms-length party. Foreign Affiliate Dumping rules were announced in 2011 to combat the tax-free extraction of surplus when a CRIC that is controlled by a non-resident corporation, invests in a foreign affiliate. (Similar rules target loans made by a CRIC to non-arms-length non-resident members of a corporate group.) These rules generally deem that where a foreign affiliate is acquired by a CRIC (or the CRIC makes a loan to a non-arms-length non-resident), either the cross-border paid-up capital of the CRIC is suppressed (ground down), or a dividend is deemed to have been paid by the CRIC to the foreign parent corporation. Currently, the rules only apply where the CRIC is controlled by a foreign corporation or group of foreign corporations. The Budget proposes to extend the rules to CRICs that are controlled by non-resident individuals and trusts or groups of persons that do not deal at arms-length with each other, that comprise any combination of non-resident corporations, individuals or trusts. For the purposes of determining if a non-resident trust is related and therefore not at arms-length with other parties, the trust will be deemed to be a corporation and the beneficiaries will be deemed to be shareholders that own shares pro-rata to the relative value of their beneficial interests in the trust. Presumably the measure is aimed at CRICs that are owned by non-resident private equity funds or possibly high-net-worth families that structure their foreign-holding entities as trusts or partnerships rather than corporations. This measure will apply to transactions or events that occur on or after March 19, 2019.

ADMINISTRATIVE MATTERS Electronic Demands for Information by CRA Both the Income Tax Act and Excise Tax Act provide CRA the power to serve notice on taxpayers and non-residents that carry on business in Canada, requiring production of information, including foreign-based information. The CRA may also demand third-party information from institutions such as financial institutions.... The current rules generally require the Minister to personally serve or to send by registered mail the notice demanding the information. The Budget proposes to permit the CRA to serve such notice electronically to a bank or credit union that has provided consent to receive such notices electronically. These measures are applicable to both the Income Tax and Excise Tax Acts and come into force January 1, 2020.

SALES TAX AND EXCISE TAX MEASURES Cannabis Taxation Later this year, edible cannabis, cannabis extracts and cannabis topicals will be permitted for legal sale under the Cannabis Act. The Budget proposes to impose excise duties on these products (including cannabis oils) based on the quantity of tetrahydrocannabinol (THC) contained in the final product. The THC-based duty will be imposed at the time of packaging of a product and become payable when it is delivered to a non-can...nabis licensee such as a provincial wholesaler, retailer or individual consumer. The combined federal-provincial territorial THC-based excise duty rate for cannabis edibles, cannabis extracts (including cannabis oils) and cannabis topicals is proposed to be $0.01 per milligram of total THC. This measure will come into effect on May 1, 2019, subject to certain transitional rules.

SALES TAX AND EXCISE TAX MEASURES Multidisciplinary Health-Care Services Health-care services may be provided by a multidisciplinary health team of licensed health-care professionals consisting of a physician, an occupational therapist and a physiotherapist. When supplied separately, the services rendered by these health-care professionals would generally be exempt from GST/HST. Currently, there is no GST/HST provision that explicitly relieves the service of a multidisciplina...ry team that combines elements of the various practices. The Budget proposes to exempt from the GST/HST, the supply of a service rendered by a team of health professionals, such as doctors, physiotherapists and occupational therapists, whose services are GST/HST-exempt when supplied separately. The exemption will apply where all or substantially all of the service is rendered by such health professionals acting within the scope of their profession. This measure applies to supplies of multidisciplinary health services made after March 19, 2019.

SALES TAX AND EXCISE TAX MEASURES Foot-Care Devices Supplied by Order of a Podiatrist or Chiropodist Certain foot care devices, such as orthopedic devices and anti-embolic stockings, are zero-rated and relieved from GST/HST when supplied on the written order of a physician, nurse, physiotherapist or occupational therapist. The Budget proposes to add licensed podiatrists and chiropodists to the list of practitioners on whose order supplies of foot-care devices are zero-rated.... This measure will apply to supplies of foot-care devices made after March 19, 2019. See more

SALES TAX AND EXCISE TAX MEASURES Human Ova and In Vitro Embryos Donated human ova and in vitro embryos are being used in assisted human reproduction procedures in Canada. The Budget propose to extend GST/HST relief for human ova and in vitro embryos. It is proposed that supplies and imports of human ova be relieved of the GST/HST and that imports of human in vitro embryos also be relieved of the GST/HST. ... This measure applies to supplies and imports of human ova and to imports of human in vitro embryos made after March 19, 2019.

BUSINESS INCOME TAX MEASURES Character Conversion Transactions Converting Income to Capital Gains Capital gains are taxed at half the rate of regular income and typically at a substantially lower rate than dividend income. Consequently, where a choice is available without a change in risk, investors have a bias to earn capital gains....Continue reading

BUSINESS INCOME TAX MEASURES Zero-Emission Vehicles The Budget proposes to introduce a temporary enhanced first-year CCA rate of 100 per cent in respect of eligible zero-emission vehicles. These vehicles will be classified under one of two new CCA classes.... Class 54 will include zero-emission vehicles that would otherwise be included in Class 10 or 10.1. The amount on which CCA can be claimed is limited to a maximum of $55,000 plus sales taxes, per vehicle. Class 55 will include zero-emission vehicles that would otherwise be included in Class 16. This measure will apply to eligible zero-emission vehicles acquired on or after March 19, 2019, and that become available for use before 2028, subject to a phase-out for vehicles that become available for use after 2023. The taxpayer must claim the enhanced CCA for the taxation year in which the vehicle first becomes available for use. The Budget proposes to amend the GST/HST rules to ensure consistency with these measures.

BUSINESS INCOME TAX MEASURES Small Business Deduction Farming and Fishing A CCPC is generally entitled to pay federal tax at the small business rate, which is currently 9 per cent, on its first $500,000 of income from an active business carried on in Canada, provided that the $500,000 threshold is not reduced, nor the income in question restricted, under various rules of the Income Tax Act. Where income is not eligible for the small business deduction, a federal corporate t...ax rate of 15 per cent would apply instead. Enacted in 2016, one such restriction prohibits specified corporate income (SCI) of a CCPC from being taxed at the small business rate. SCI generally encompasses income that the CCPC derives from the provision of services or property to private corporations in which the CCPC or other certain persons hold a direct or indirect interest. However, since the inception of the SCI rules, certain income that a CCPC derives from sales to a farming or fishing cooperative corporation is excluded from the definition of SCI. Budget 2019 proposes to broaden the above-mentioned exclusion from the SCI rules. In particular, the sale of the farming products or fishing catches would no longer need to be made to a farming or fishing cooperative corporation, but merely to an arms-length corporation. This measure will apply to taxation years beginning after March 21, 2016. See more

BUSINESS INCOME TAX MEASURES Canadian Film or Video Production Tax Credit This 25 per cent refundable tax credit is generally available, within limits, to qualified corporations that incur qualified labour expenditures in connection with an eligible Canadian film or video production.... Retroactive to March 12, 2018, joint Canada/Belgium productions will qualify for the credit.