Posts Tagged ‘compliance’

Gov’t of Canada targeting retail workers with employee discount tax

A spokesperson for Revenue Minister Diane Lebouthillier confirmed that her office is reviewing the proposal, which appears in the latest version of the tax folio from the Canada Revenue Agency.

The proposal is to tax employee discounts as income based on the amount of money saved. Under the proposed change, employee discounts would be counted as income, and the value of that discount would need to be taxed at “equal to the fair market value of the merchandise purchased, less the amount paid by the employee.” Exceptions would only be made on discounts that are afforded to some members of the public at some point during the year.

The latest version of the Canada Revenue Agency’s tax folio advises employers that “when an employee receives a discount on merchandise because of their employment, the value of the discount is generally included in the employee’s income,” with the value of the discount assessed at “equal to the fair market value of the merchandise purchased, less the amount paid by the employee,” unless the discount is “available to the public or a segment of the public, at some point during the year.”

Conservative finance critic Pierre Poilievre issued a statement Monday saying the change means the government plans to tax things like a 10 per cent shoe discount offered to shoe salesmen, a meal discount offered to a waitress or a free gym membership given to a fitness trainer.

Before the change, which some expect to come into effect Jan. 1, employers were advised to tax employee discounts only if the employee was purchasing the merchandise below the employer’s cost.

Not only would the change “target those who can least afford to pay more,” according to Poilievre, but it means local business owners will have the headache of needing to “track all of these discounts.”

Minister of National Revenue Diane Lebouthillier said in a written statement that the CRA’s goal is “to ensure that the agency does not impose additional administrative burdens on businesses.”

With a report from CTV’s Kevin Gallagher

ctvnews.ca/politics

Tax Information Newsletter for Businesses

Businesses – Tax information newsletter, Issue: 2016-03

1- Compliance letter campaign – Message to GST/HST registrants

In December 2016, the Canada Revenue Agency (CRA) will conduct a GST/HST compliance letter campaign pilot project. The CRA will send 250 letters in December followed by 250 in February, 2,500 in May, and 2,500 in August to GST/HST registrants. Those receiving a letter will be asked to review a previously-submitted GST/HST return with suspected errors and confirm whether the amounts they reported are correct or need to be changed.

The campaign supports the CRA’s increased emphasis on helping individuals and small businesses to better understand their tax obligations and encourages them to correct any errors in their past GST/HST returns. This increased understanding of tax obligations will also serve in promoting compliance going forward.

2- 2017 Indexation adjustment for personal income tax and benefit amounts are now available

Each year, certain personal income tax and benefit amounts are indexed to inflation using the Consumer Price Index data as reported by Statistics Canada. The chart provides the indexed amounts for four tax years.

3- Does your business have tax debt? Don’t panic. You have options.

Does your business owe taxes to the CRA? Ignoring your tax debt isn’t the best strategy. Avoiding payment could result in financial and legal consequences for you and your business. Instead of avoiding a payment, check out the video “Keeping Your Business on Track” to find a better option.

4- Businesses take notice: Your tax information just got clearer!

The CRA is redesigning the correspondence it sends to Canadians, including the Corporation, and Goods and services tax/ harmonized sales tax (GST/HST) notices of assessment (NOA) and notices of reassessment (NOR). The CRA has made changes to how the notices are structured, designed, formatted, and written, making the information easier to read and understand.