Transparency, Taxes and the Big Distraction

If Canada’s most famous WWII spy were around today, he might well have been speaking about the federal government's Fall Economic Statement (FES).

This Monday March 21, 2022, CRA released the electronic version of T4002 - Self-employed Business, Professional, Commission, Farming, and Fishing Income for the 2021 tax filing year.  The paper version won’t be available until late April.  The Guide covers pandemic support measures for the self-employed, including CEWS, CERS, CRHP, and government loans.

In an effort to assist Ukrainians who are fleeing the war and wish to come to Canada, the government has streamlined the process for entry. Through the “Canada-Ukraine Authorization for Emergency Travel” program, applications are expected to be processed in as little as two weeks. They will allow approved applicants to stay in Canada for up to three years. Once here, they can apply for permanent residency. Applicants will be allowed to work or study while in Canada.  There are interesting tax consequences for that.

In the market for a Tesla?  Now would be a good time to purchase the luxury model, as  Canada now has a new tax act:  The Select Luxury Items Tax Act, slated to come into effect September 1, 2022 if proposals released March 11, 2022 are passed into law.   The proposed 173 pages of legislation for Canada’s new luxury tax, first introduced in the April 2021 federal budget, targets buyers of luxury cars and aircraft with a retail price tag of $100,000 or more and boats valued at $250,000 or more.  Here are the reasons why you need to pay attention:

Throughout the calendar years 2012 - 2015, a Toronto man named Perry Fousteris and representatives of Fousteris’ corporation defrauded international investors by encouraging international investors to purchase shares of corporation’s owned by Fousteris. This fraud attracted the attention of the CRA, as well as penalties, interest and jail time.  Here is what happened:

When a business hires an employee, it is important for that employee to be “formally” hired, that is with a role description, a rate of pay or salary level and a statement of expectations that define the relationship between the employer and employee,  all well documented and filed in case of audit from the CRA. This is particularly important post-COVID, as CRA will be auditing the Canada Emergency Wage Supplement (CEWS) payments businesses received, right up to the end of 2023.   But it is also very important if you have hired family members.

What’s the biggest difference between a co-borrower and a cosigner? It relates to the degree of investment in the loan. Here are the details: