On November 15 and 16, 2016, members of TEI’s Canadian Income Tax Committee met with members of the Canada Revenue Agency and Department of Finance Canada to discuss various tax administrative and enforcement issues. CRA and Finance have provided TEI with responses to the questions posed.
On March 17, 2016, TEI submitted a letter to the Canada Revenue Agency recommending certain changes to paperwork requirements surrounding Regulation 102, specifically to Form RC473. The letter discusses concerns that taxpayers might have with completing that form, as well as other requirements that might be counterproductive toward encouraging taxpayer compliance with Regulation 102.
TEI's Canadian Income Tax Committee prepared this letter. Grant Lee chairs the Committee, and TEI Tax Counsel John Schoenecker coordinated the preparation of TEI's comments
TEI Comments on Proposed Canadian Legislation Effecting Reporting of Qualified Non-Resident Employees
On October 12, 2015, TEI submitted a letter to the Canadian Department of Finance suggesting further legislative changes surrounding Regulation 102 in the form of (1) allowing self-certification as to “qualifying non-resident employer” status and (2) eliminating the $10,000 threshold for T4 reporting requirements. The proposed legislation would require employers to obtain advance certification from the CRA before being considered a “qualifying non-resident employer” as well as reporting on form T4 of all “qualifying non-resident employees” who make more than $10,000.
On October 12, 2015, TEI submitted a letter to the Canadian Department of Finance stating that a proposed expansion of the Income Tax Act's subsection 55(2), which is an anti-avoidance provision, would unduly apply to routine transactions that have no anti-avoidance purpose. The proposed legislation would expand the “purpose test” to capture instances in which dividends are paid on a share, not to reduce a capital gain, but instead to (i) significantly decrease the fair-market value of any share, or (ii) significantly increase the total property costs to the dividend recipient.
On August 28, 2015, TEI submitted a letter to the Canadian Department of Finance urging exception for stock-based compensation programs from potential representation requirements at issue in proposed legislation regarding synthetic equity arrangements. The legislation would require participants in synthetic equity arrangements to affirmatively represent that they are Canadian taxpayers in order to claim a dividends-received deduction in certain transactions involving stock hedging.
On June 12, 2015, TEI submitted comments on the Canadian Government's proposals to provide targeted relief from the withholding and remittance requirements that otherwise apply to non-resident employers of non-resident employees who perform work in Canada. TEI expressed appreciation for the Government's interest in reducing red tape and excessive administrative and tax compliance burdens for businesses, but noted several areas where the proposals fall short.
On August 6, 2014, Tax Executives Institute submitted a written statement to the House of Commons Standing Committee on Finance in connection with the 2014 pre-budget consultations in Canada.
On June 27, 2014, TEI submitted a letter to the Canadian Department of Finance observing that requiring foreign e-commerce suppliers to register with Canadian Revenue Authority and collect GST/HST on sales to final consumers would restore neutrality to the Canadian sales tax system and mitigate the pricing difference resulting from the ineffectiveness of self-assessment of the tax. The Institute's comments went on to discuss several areas to be addressed if a mandatory registration system for foreign e-commerce providers is created.
On June 11, 2014, Tax Executives Institute submitted comments on the Consultation on Tax Planning by Multinational Enterprises announced in Annex 2 of the 2014 Canadian Budget Message.
On April 10, 2014, TEI filed comments with Canada’s Minister of Finance Joe Oliver on the 2014 Budget Proposals. TEI’s comments were prepared by its Canadian Income Tax Committee, whose chair is Bonnie Dawe of Finning International. Contributing substantially to the development of TEI’s comments were Carolyn Mulder of Wal-Mart Canada, Corp. and Jason Vincze of General Electric Canada. Also contributing to the comments were Giovanna Baragetti of Hydro One Networks, Inc. and Lynn Moen of Walton Global Investments, Ltd. Senior Tax Counsel Jeffery P.