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11 Cards in this Set
- Front
- Back
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Government role in Canadian taxation
1. Federal government 2. Department of Finance 3. CRA 4. Provincial and territorial |
1. initiates proposal for changes in tax legislation 2. Drafts wording of tax legislation 3. Administers and enforces tax laws 4. Sane as federal and administered by the CRA |
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Liability for tax based on residency |
1.Full time residents- worldwide income 2. Deemed full time-travelled and stayed in canada for 183 days; taxed worldwide 3. Part-year- taxed worldwide from the time they became residents 4. Non residents-taxed on Canadian-sourced income |
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Tax treaty |
Agreement on taxation between Canada and another country. Tax treaties override the provisions of ITA to avoid double taxation and to prevent tax evasion. |
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Legal structures for business entities |
1. Sole proprietorship 2. Corporation 3. Partnership 4. Joint venture |
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Tax plannin |
Arrangement where tax reduction is consistent with intent of the tax law |
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Tax avoidance |
arrangement where tax reduction is consistent with the overall intent of the tax law |
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Tax avoidance |
Tax reduction that is illegal and ignores the provisions of tax law |
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GAAR Rules |
1. Benefit: a tax benefit has arisen as a result of a transaction. 2. Avoidance transaction: the transaction or series of transactions is a tax avoidance transaction without any bona fide purpose other than tax. 3. Avoidance transaction: the transaction of series of an abusive tax transaction that is not consistent with the object, spirit, or purpose of the ITA
1 & 2 onus on taxpayers to prove 3 onus on CRA to prove |
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Personal-sources of income |
1. Employment-benefits from employment 2. Business income/loss 3. Property income/loss 4. Other income-retirement, RRSP, CPP 5. Capital gains/loss-50% taxable |
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EMPLOYEE VS CONTRACTOR List criteria |
1.ICOSFOR-Intent, Control, opportunity for profit, subcontract the work, financial risk,ownership of tools, responsibility for investment and management |
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Employee benefits-taxable benefits Counselling Discounts |
1 counselling-financial counselling 2. Discounts-if not applicable to public 3. Frequent flyer points personal-if received from the company’s credit card, if uses personal credit card for company’s expenses which therefore earns points 4. Gifts and rewards-non cash in excess of 500, given for performance, given to non arms length transaction 5. Health care-payment for public health care plan 6. Life insurance-if the employee is a beneficiary 7. Meals-less than the cost of the food-difference is taxable 8. Recreational activities-taxable if employees benefit from it 9. Relocation payments-taxable; actual moving expenses are deductible (other deductions). Reimbursements are not taxed 10. Relocation payment-if relocation results to house sold at a loss, 1/2 in excess of 15k is taxable 11. Severance pay 12x signing bonus 13. Tools if paid by the employer 14. Tuition fees- if courses is not related to role 15. Accidental and sickness plan Group- Employer paid 100%
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