Tax thought leadership roundup (Winter 2016)

Keep up with the latest thinking on tax from CPAs in Canada with our regular roundup of tax-related alerts, articles, white papers and thought leadership releases.

ISSUE IN FOCUS

Flat tax: The ultimate in simplicity?

How do we reduce complexity in the tax system? Some think a flat tax is the answer. But is it really? Or is this more a matter of “be careful what you wish for”?

GENERAL INTEREST

The Global Tax Reset & BEPS (Base Erosion & Profit Shifting) (Deloitte)

This Deloitte Canada site is designed to help businesses navigate what the firm refers to as a ”global tax reset” as a result of initiatives like the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) project.

Video: A look ahead to the federal budget (PwC)

Chris Kong, PwC’s national managing partner of tax, discusses personal tax initiatives that have already been introduced by the newly elected federal Liberal government, as well as personal and corporate tax measures expected to be tabled in the government’s first budget.

New Ontario Retirement Pension Plan (Grant Thornton)

The Ontario government’s decision to proceed with its rollout of the new Ontario Retirement Pension Plan (ORPP), despite the new federal government’s desire to expand the Canada Pension Plan, increases the urgency for Ontario workers and businesses to understand the ORPP. Grant Thornton analyzes how the ORPP will work and be administered.

CORPORATE TAX

Liberal government implements measures impacting the taxation of CCPCs (Grant Thornton)

Grant Thornton analyzes how the recently tabled Notice of Ways and Means Motion to implement a number of tax measures, including a new top personal income tax rate of 33 per cent, will affect Canadian-controlled private corporations and other private corporations.

Transfer pricing: Ruling highlights importance of arm’s length standard and 'reasonable efforts' (MNP)

Melinda Nguyen of MNP analyzes the impact of the tax decision in Marzen Artistic Aluminum v. the Queen, which involved transactions between a company and its subsidiaries that were deemed not to be at arm’s length, including why this decision should be of particular interest to small- and medium-sized multinational enterprises.

PERSONAL TAX

Unwarranted large personal tax refunds: Wilfully blind and grossly negligent (EY)

Two recent decisions of the Tax Court of Canada examined whether taxpayers were liable for gross negligence penalties in respect of fictitious business losses claimed in their tax returns, and related requests to carry back the available losses to prior taxation years. TaxMatters@EY analyzes the decisions in Taylor v. the Queen and Khattar v. the Queen.

New Liberal government announces tax measures (Grant Thornton)

How will you be affected by the federal government’s proposed personal income tax rate changes — including the new high tax bracket and reduced Tax-Free Savings Account contribution limit? Grant Thornton analyzes these measures and also addresses what might be tabled in the 2016 federal budget.

Automobile expenses and recordkeeping (BDO)

BDO’s automobile log can help you keep track of all your automobile and business driving expenses. This easy-to-use booklet also describes what CRA requires when it monitors this critical expense on tax returns, including applicable benefits, allowances and expense deductions.

Failure to pay tax instalments can be costly (BDO)

BDO reminds individuals about the importance of paying personal income tax instalments on time. In this article, the firm examines who has to make tax instalments, how instalments are calculated and the reasons for paying in instalments.

Tax strategies for a new year (MNP)

With a new federal government in place, several changes to Canada’s tax system have already been introduced, including a tax cut for the middle class and an increase for high-income earners. Darrell Endresen of MNP discusses strategies for managing increased tax rates, and saving tax against the background of these changes.

INDIRECT TAXES

Tracking tax trends within the current commodity cycle (Deloitte)

Deloitte examines the impact of current tax trends on the mining industry, including the OECD’s BEPS project, examining both domestic and foreign issues companies may face.

TAXATION OF TRUSTS

New estate and trust tax regime — Welcome relief announced (KPMG)

Draft legislation from the Department of Finance Canada provides welcome relief for trusts and estates affected by the "graduated rate estate" rules. As KPMG’s TaxNewsFlash-Canada explains, the proposals give more flexibility for a deceased’s estate to claim charitable donations. They also reinstate the pre-2016 tax treatment of deemed capital gains for a life interest trusts.

INTERNATIONAL TAX

U.S. IRS amends regulations allocating partnership foreign tax expense (EY)

The U.S. Internal Revenue Service recently published temporary regulations that expand and clarify the rules relating to the allocation of creditable foreign tax expenditures by a partnership. This EY Global Tax Alert analyzes the content of these regulations and the implications for partnerships.

ACCOUNTING FOR INCOME TAXES

Tax accounting — Handy summary of tax rates for 2015 (KPMG)

KPMG’s listing of federal and provincial corporate tax rates for 2015 covers general corporations and Canadian-controlled private corporations. The status of federal and provincial tax legislation as at December 31, 2015, is also included in this TaxNewsFlash-Canada.

Corporate tax rates and legislation: Q4 2015 accounting status (PwC)

PwC examines key accounting updates, including Financial Accounting Standards Board and International Accounting Standards developments in the last quarter of 2015. This report also looks at legislative changes, and provides a summary of tax-related federal, provincial and territorial bills, and corporate income tax rates across Canada.

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