Monthly Archives: June 2018

Subsidized Meals

Do you have an employee dining room or cafeteria? In a March 21, 2018 Technical Interpretation, CRA stated that they do not consider meals subsidized by the employer to be a taxable benefit provided the employee pays a reasonable charge. This charge should be sufficient to cover the cost of the food, its preparation and… Read more »

Proper Disclosure of Delinquent Account Interest

In a November 10, 2017 Alberta Court of Queen’s Bench case, the amount of a creditor’s claim was challenged after an uncontested default judgment. The claim included interest calculated at 1% per month as stated in the contract. However, where a rate is not stated in per annum terms, the legal maximum is capped at… Read more »

Input Tax Credits

In a May 31, 2018 Tax Court of Canada case, the taxpayer claimed ITCs (arising from the December 2008 quarter-end) which were previously disallowed when claimed by a related party. Within 30 days of that decision, the taxpayer claimed the ITCs on their return for the quarter ending September 30, 2015. Taxpayer loses ITCs must… Read more »

Employer-Sponsored Social Event Taxable Benefits

In an April 9, 2018 French Technical Interpretation, CRA clarified their position on taxable benefits arising from employer-sponsored social events, such as a holiday party or other event.  Where the cost of the social event does not exceed $150/person (previously the limit was $100), excluding incidentals such as transportation, taxi fares and accommodations, there would… Read more »

Donation Receipt Requirements

Charities should ensure that any donation receipts issued are fully compliant with the tax rules. Failure to do so may result in the donor being denied a charitable donation if reviewed by CRA. This could cause operational and goodwill problems for the charity. Receipts for cash gifts must have the following: a statement that it… Read more »

Directors’ Liability for Corporate Income Taxes

A December 11, 2017 Tax Court of Canada case examined whether a taxpayer was liable for unpaid income taxes of the corporation of which he was a director. CRA’s assessment was based on the assertion that the taxpayer was a legal representative of the corporation and had distributed assets of the corporation without having first… Read more »

Personal Use of Business Aircraft

A CRA communication dated March 7, 2018 provided updated commentary on taxable benefits arising from the personal use of a business aircraft. CRA categorized the types of flights into three groups, as follows: Mixed-use flights – If a shareholder or employee takes a flight which has a clear business purpose, they would not generally be… Read more »

Interest Deductability

In an April 20, 2018 Tax Court of Canada case, at issue was whether the taxpayer could deduct interest incurred in 2013, 2014 and 2015 related to $300,000 borrowed in 2007 to purchase mutual funds. From 2007-2015, the taxpayer received a return of capital from the funds, totalling $196,850 over the period. A return of… Read more »