Updates to electronic filing and certification of tax and information returns

The 2021 federal budget included measures that would amend electronic filing thresholds for prescribed information returns. These 2021 budget proposals were followed by draft legislation released on February 4, 2022. There was some concern with these proposals, in particular around their effective dates (they were to apply for calendar years after 2021). See our March 3, 2022 news items for further details.

The August 9, 2022 draft legislation has deferred the effective date for the following measures to now apply for taxation years beginning 2023 and payments made or information returns filed after 2023:

• Electronic filing thresholds for income tax returns
  • Proposals to eliminate the mandatory electronic filing threshold for corporate income tax returns (i.e., all corporations except those exempted under ITR 205.1(2)) will be required to file electronically. 
  • Proposals for tax preparers to file returns electronically if, for a calendar year, they prepare more than five corporate income tax returns, more than five personal income tax returns, or more than five estate or trust income tax returns.
• Electronic filing and issuance requirements for information returns
  • Reduction in the mandatory electronic filing threshold for income tax information returns, from 50 to 5 returns of a particular type for a calendar year.
• Electronic payments
  • The requirement for electronic payments for remittances made under the Income Tax Act that are over $10,000.