Tax Tips – June 2017
Some quick points to consider.
- CRA’s My Account for Individuals and My Service Canada Account are now linked such that users can easily switch between online personal tax information and other benefits (ex. EI, CPP, and OAS).
- Employers will soon be able to distribute T4s electronically (provided certain conditions are met).
EMPLOYMENT INSURANCE: Some Improvements
The 2017 Federal Budget proposed a number of changes to Employment Insurance (EI). Some of the proposals include the following:
A New Caregiving Benefit
This benefit will provide eligible caregivers up to 15 weeks of EI benefits while they are temporarily away from work to support or care for a critically ill or injured family member.
More Flexible Parental Benefits
This will allow parents to choose to receive EI parental benefits over an extended period (up to 18 months) at a lower benefit rate (33% of average weekly earnings). The existing benefit rate (55% over a period of up to 12 months) will remain available for parents who prefer this arrangement. Finally, women will be able to claim EI maternity benefits up to 12 weeks before their due date (expanded from the current standard of 8 weeks).
Education While Receiving EI Benefits
Changes to enhance the ability of EI claimants to pursue self-funded training while maintaining their EI status were proposed.
Action Item: Ensure you are aware of these changes to Employment Insurance.
SHARING ECONOMY: Know Your Tax Obligations
On March 17, 2017, CRA released a Tax Tip reminding those involved in the sharing economy to ensure that they comply with relevant income tax and GST/HST obligations. All income earned through sharing economy activities should be reported.
CRA identified five key sectors, being accommodation sharing, ride sharing, music and video streaming, online staffing, and peer/crowdfunding.
CRA also noted that it is co-operating with industries, the provinces, and the territories to identify and address areas where the tax system and compliance might be affected.
Action Item: If you are involved in the sharing economy, ensure you are compliant with your tax obligations.
UBER DRIVERS: Registration for GST/HST
Most businesses must register for a GST/HST account (and therefore collect and remit GST/HST as appropriate) if they earn revenues from worldwide taxable supplies greater than $30,000 within the previous four consecutive quarters, or exceed the $30,000 threshold in a single calendar quarter. However, a special rule applies to self-employed “taxi businesses” which requires them to register regardless of the quantum of revenues.
There has been some uncertainty as to whether drivers of ride-sharing services, such as Uber, are considered “taxi businesses”.
The 2017 Federal Budget ended this uncertainty. It proposed that, effective July 1, 2017, ride-sharing services will be defined as a “taxi business” for GST/HST purposes and therefore will be required to charge and remit GST/HST. More specifically, a “taxi business” will now include all persons engaged in a business of transporting passengers for fares by motor vehicle within a municipality and its environs where the transportation is arranged for or coordinated through an electronic platform or system, such as a mobile application or website.
Action Item: Drivers of ride-sharing services should consider registering for GST/HST.
DISCLAIMER: The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.
No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents.
For any questions… give us a call.