Canadian tax news

Your source for the latest Canadian tax news and updates on changing tax laws. Working collaboratively with the Canada Revenue Agency (CRA) we aim to bring clarity on pressing tax questions and tax updates.

Please visit our archive page for content from 2020. There are no posts on this page older than 2020.


The CRA has recently informed us that it has revised its guidance, which we originally summarized in our March 8 update, on how to deal with questions 1, 3, 4, 6, 7, 8 and 9 where a note must be attached to a T3 return that is being EFILED. The CRA has now advised us that this information only has to be retained by the taxpayer in their records in the event the CRA asks to see it at a later date.

Further to our March 8 update on T3 EFILE, we have received a communication from the CRA on the proposed changes on electronic filing for tax preparers contained in subsections 150.1(2.2) and (2.3) of the Income Tax Act.

On March 11, Finance Canada released draft legislation on the Luxury Tax that was proposed in the 2021 Federal Budget. Subject to parliamentary approval, the tax will apply beginning on September 1, 2022. Finance Canada’s news release states that “two notable new provisions” are included in the legislation:

  • relief is proposed to be provided to after-sale improvements that are made to vehicles, aircraft or vessels purchased below the relevant price threshold; and
  • relief for aircraft is proposed to be expanded to take into account qualifying flights that are conducted in the course of a business with a reasonable expectation of profit.

We have received additional information from the Canada Revenue Agency (CRA) on T3 EFILE, which we wanted to pass on along with some other issues to keep in mind with the introduction of T3 EFILE.

As noted in our recent tax blog, there are several Budget 2021 proposed tax measures that would impact 2021 personal income tax returns. As these measures have not yet been enacted, there has been uncertainty on how affected taxpayers should file T1 returns.

Further to a recommendation we made last spring, the CRA has recently updated its MFA process by allowing users to opt whether they want to input the MFA passcode each time they sign in, or to just input the “one-time” MFA passcode once every 8 hours if the user is using the same device.

The CRA released the 2021 versions of the T2200S Declaration of Conditions of Employment for Working at Home Due to COVID-19 (T2200S) and T777S Statement of Employment Expenses for Working at Home Due to COVID-19 (T777S) for employee home office expense claims. Both forms are similar to last year’s versions. The CRA has also highlighted the criteria that must be met for employers interested in automating the completion of electronic T2200S forms.

It has come to our attention that during the CRA Q&A session on January 13, there was an issue with an answer provided in respect of T4 reporting, and, in particular, whether amounts are required to be reported for T4 codes 57 to 60 for 2021 T4s. The CRA has confirmed that this additional reporting requirement applied only for the 2020 calendar year and therefore, no additional reporting is required for 2021.

The CRA has updated their webpage on the proposed trust reporting rules with the following message:

The legislation to support this proposed measure is pending. The CRA will administer the new reporting and filing requirements once there is supporting legislation that receives Royal Assent. The CRA will continue to administer the existing rules for trusts, under enacted legislation. The proposed beneficial ownership reporting requirements will not be part of the published 2021 T3 income tax return. This note will be updated when more information is available. You should not delay filing your 2021 T3 tax return.

Yesterday afternoon, CRA sent an email notifying key stakeholders that the CRA is hosting interactive question and answer sessions on the Canada Recovery Hiring Program, the Tourism and Hospitality Recovery Program, and the Hardest-Hit Business Recovery Program.

The CRA recently provided an important update to its My Account (MyA) services. Starting in February 2022, the CRA will require taxpayers to provide their email address to use MyA as an additional security measure to protect taxpayers’ personal information.

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