February is Payroll Month at the 17th Floor, so it's a great time to review the latest tax developments from last year and get set for 2023. According to CPA Canada, these are the tax highlights of the last part of 2022:
1. 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.
2. Mandatory Reporting
The effective date of the Reportable Transaction and Notifiable Transaction proposals will be delayed until the implementation bill receives Royal Assent. As previously announced, the Uncertain Tax Treatment proposals will apply to taxation years beginning after 2022.
3. 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. 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.
4. Canada Revenue Agency (CRA) Campaign Focusing on Personal Service Businesses (PSB)
The CRA announced a new campaign focused on PSBs in early 2022. 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. Learn more about this campaign here.
5. Electronic Notices of Assessments (ENOA)
In Budget 2021, the government proposed legislation allowing 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. Learn more about this here.
6. Excessive Interest and Financing Expenses Limitations
Revised draft legislation was released and is subject to a consultation period. It is now proposed that these rules will apply to taxation years beginning on or after October 1, 2023.
Were you aware of all these tax developments? Tell us in the comments how you are preparing for 2023.
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