Donna Mazerolle & Associates Newsletter

Issue 7 – November 2011

Every week, you as a business owner have to make dozens of decisions. When it comes to business expenses, taxes, deductions, etc., its best to call our office to get professional advice on how to proceed, rather than finding yourself challenged by the CRA (Canada Revenue Agency) months or even years later for an action or decision you assumed was correct.

The examples in this month’s newsletter show that you can’t make assumptions when it comes to Canada’s tax laws.

Should you have any questions about the topics below, or need guidance on strategy, business plans, accounting or bookkeeping for your business, call Donna Mazerolle at 506-657-4067 or contact us.

Donna Mazerolle

http://DonnaMazerolle.com

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MOVING EXPENSES – NEW SALES TERRITORY

In a May 12, 2011 Technical Interpretation, CRA reviewed a situation where the employee’s sales territory was expanded such that the individual’s most southerly point in her sales territory was now over a two hour drive from her home.

CRA concluded that the expansion of the sales territory was significant enough to conclude that it resulted in a new work location for purposes of the moving expense deduction. Even though there was a two year gap between the time the individual began servicing her new expanded territories and her move, there was a sufficient nexus between the move and the commencement of employment at the new work location to qualify as an eligible relocation. Therefore, the moving expenses would be deductible.

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MOTOR VEHICLE EXPENSES

In an April 4, 2011 Technical Interpretation, CRA notes that employees may deduct motor vehicle travel expenses if required to carry out his/her employment duties away from the employer’s regular place of business and the employee is required by the contract of employment to pay such expenses. A completed Form T2200 is also required.

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NEW FILING REQUIREMENTS

On September 17, 2010, CRA announced that, effective for fiscal periods ending after December 31, 2010, a Canadian Partnership, or a Partnership that carries on a business in Canada, must file a T5013 Partnership Information Return where one of the following conditions are met:

• At the end of the fiscal period the revenues plus expenses are greater than $2 million or, the Partnership has more than $5 million in assets.
• At any time during the fiscal period the Partnership was either a tiered Partnership, had a Partner that was a corporation or a Trust, invested in flow- through shares of a principal business corporation that incurred Canadian resource expenses and renounced these expenses to the Partnership or had received a written request from CRA to file a T5013 Information Return.

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The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a commentary such as this, a further review should be done. Every effort has been made to ensure the accuracy of the information contained in this commentary. However, because of the nature of the subject, Donna Mazerolle & Associates does not accept any liability for the above contents or its use.