New
Measures to Increase Fairness and
Efficiency of the Sales Tax System
2006-073 (November 27, 2006) -
includes a Backgrounder, the Notice
of Ways and Means Motion to
introduce an Act to amend the Excise
Tax Act, the Excise Act, 2001 and
the Air Travellers Security - Charge
Act and to make related amendments
to other Acts; and Explanatory Notes
Minister
Flaherty to Participate in Online
Chat
2006-072 (November 27, 2006) -
includes a link to the Invitation by
the Honourable Jim Flaherty,
Minister of Finance, to participate
in an Advantage Canada online chat
Canada’s
New Government Renews
Inflation-Target Agreement With the
Bank of Canada
2006-070 (November 23, 2006) -
includes the Economic and Fiscal
Update 2006, the Joint Statement of
the Government of Canada and the
Bank of Canada on the Renewal
of the Inflation-Control Target, and
Advantage Canada - Building a
Stronger Economy for Canadians.
Canada’s
New Government to Ease the Burden of
Taxpayers
2006-057 (October 16, 2006) -
includes Notice of Ways and Means
Motion to Implement Certain
Provisions of the Budget Tabled in
Parliament on May 2, 2006 and
Explanatory Notes Relating to
Remaining Budget 2006 Income Tax
Measures, Dividend Taxation and
Canadian Vintners and Brewers
Harper
Government Launches National Web-Based
Pre-Budget Consultations: A First for
Canada
April 6, 2006 For
the first time ever, a federal government
is encouraging Canadians from coast to
coast to coast to participate in the
budget process online. Minister of Finance
James M. Flaherty today launched
an online consultation process on the
Department’s website to give Canadians
an opportunity to provide their views
to the Government during the pre-budget
consultation period... 2006-004
For
further information
===>
Invitation by
the Honourable James M. Flaherty, P.C., MP
Minister of Finance to Pre-Budget Web
Consultations
April 6, 2006 Thank you for sharing
your views with me. It’s an important
opportunity to continue the dialogue that
Prime Minister Stephen Harper started
during the last election. It’s important
that I get your views and advice as I
craft our government’s first budget, and
set the stage for future budgets... For
further information
===>
Official
International Reserves March 3, 2006The
Department of Finance announced today that
Canada's official international reserves
decreased by an amount equivalent to
US$279
million during February to US$32,684
million. 2006-003 Official
International Reserves 2006 ... For
further information
===>
Department of
Finance February 21, 2006 December 2005:
budgetarysurplus
of $1.0 billion There was
a budgetary surplus of $1.0 billion
in December 2005, up $0.8 billion
from December 2004. Total budgetary
revenues rose $0.7 billion or 4.5 per cent,
reflecting strong gains in personal income
tax receipts, which were $0.7 billion
or 8.3 per cent higher. Program
expenses were relatively unchanged in
December, rising $0.1 billion or 0.4 per cent.
Public debt charges were $0.1 billion
lower. The December results incorporate
$0.3 billion in tax reduction
measures—the increase in the basic
personal amount and the reduction in the
16-per-cent tax rate to 15 per
cent—which pertain to the month. ... For further
information
===>
Format for
Visually Impaired - CRA - New multiple
format service for visually impaired
persons offered by the Canada Revenue
Agency Ottawa, February 16,
2006…The Canada Revenue Agency (CRA)
and the Canadian Human Rights Commission (CHRC)
announced today that effective
immediately, the CRA will offer a new
multiple format service for visually
impaired individuals... For further information
===>
Help on
Saturdays - CRA - The Canada Revenue
Agency offers business tax help on Saturdays
February 16, 2006
... The Canada Revenue Agency (CRA) will
provide service on its business enquiries
telephone lines on two Saturdays, February
18 and February 25, 2006, from 10:00 a.m.
to 4:00 p.m. (local time). This
extended service will assist employers who
need help preparing T4 slips for
employees... For further information
===>
Tax Tips -
CRA
February 13, 2006
...Don't limit yourself! Did
you know… You can start
saving now for your retirement, education
or the purchase of a home with a
registered retirement savings plan (RRSP).
Until March 1, 2006, you can make
contributions in order to benefit from
your RRSP on your 2005 income tax return... For further
information
===>
Official
International Reserves February 3, 2006The
Department of Finance announced today that
Canada's official international reserves
decreased by an amount equivalent to US$59
million during January to US$32,959
million. 2006-002 Official
International Reserves 2006 ... For
further information
===>
Taxpayer Alert -
CRA
January 18, 2006
...The Canada Revenue Agency (CRA)
is warning the public to beware of an
email scam in which individuals are
informed that they have won a large sum of
money in a lottery or sweepstakes, usually
from a foreign country... For further information
===>
*Important
Advisory on Partisan Political Activities
from CRA
Charities Web site.
2006 Indexation
Adjustment for Personal Income Tax System
Ottawa, December 9, 2005
2005-087...All personal income tax
amounts will be adjusted by 2.2 per cent
in 2006 to ensure that inflation does not
cause people to pay more income tax.
Restoration of full indexation of the
personal income tax system was announced
in Budget 2000 and took effect that same
year. Since that time, personal income tax
amounts have been indexed to inflation
every year using Consumer Price Index
data, as reported by Statistics Canada.
Changes to tax bracket thresholds and
non-refundable credits will take effect as
of January 1, 2006. Adjustments to the
Canada Child Tax Benefit (including the
National Child Benefit supplement and the
Child Disability Benefit) and the goods
and services tax credit will take effect
as of July 1, 2006, to coincide with the
beginning of the "program year"
for these benefits.
A backgrounder containing further
information on full indexation of the
personal income tax system is attached.
Also reflected in the backgrounder are
changes that go beyond indexation due to
tax measures announced in Budget 2005 as
well as in the recent 2005 Economic and
Fiscal Update. For further information
more
===>
Automobile
Deduction Limits and Expense Benefit Rates
for Business Confirmed Ottawa, December 6, 2005
2005-086... The automobile expense
deduction limits and the prescribed rates
for the automobile operating expense
benefit will apply in 2006 as follows:
The ceiling on the capital cost of
passenger vehicles for capital cost
allowance (CCA) purposes will remain
at $30,000 (plus applicable federal
and provincial sales taxes) for
purchases after 2005. This ceiling
restricts the cost of a vehicle on
which CCA may be claimed for business
purposes.
The limit on deductible leasing
costs will remain at $800 per month
(plus applicable federal and
provincial sales taxes) for leases
entered into after 2005. This limit,
which ensures that the level of
deductions for leased and purchased
vehicles is consistent, is one of two
restrictions on the deduction of
automobile lease payments. A separate
restriction prorates deductible lease
costs where the value of the vehicle
exceeds the capital cost ceiling.
The maximum allowable interest
deduction for amounts borrowed to
purchase an automobile will remain at
$300 per month for loans related to
vehicles acquired after 2005. This
limit reflects the reasonable cost of
financing a vehicle for business
purposes.
The limit on the deduction of
tax-exempt allowances paid by
employers to employees using their
personal vehicle for business purposes
will increase by 5 cents to 50 cents
per kilometre for the first 5,000
kilometres driven and 44 cents for
each additional kilometre. For the
Northwest Territories, Yukon and
Nunavut, the tax-exempt allowance will
rise by 5 cents to 54 cents for the
first 5,000 kilometres driven and
48 cents for each additional kilometre.
The allowance amounts reflect the key
cost components of owning and
operating an automobile, such as
depreciation, financing, insurance,
maintenance and fuel costs.
The general prescribed rate used to
determine the taxable benefit relating
to the personal portion of automobile
operating expenses paid by employers
will increase by 2 cents to 22 cents
per kilometre. For taxpayers employed
principally in selling or leasing
automobiles, the prescribed rate will
be increased by 2 cents to 19 cents
per kilometre. The amount of the
benefit reflects the costs of
operating an automobile. The
additional benefit of having an
employer-provided vehicle available
for personal use (i.e. the automobile
standby charge) is calculated
separately and is also included in the
employee’s income.
The Government reviews these rates and
limits annually, and announces any
planned changes prior to the end of
the calendar year. This practice
ensures that businesses are aware of
the new rates before the beginning of
the year in which they apply.
Department
of Finance Releases IMF Article IV
Preliminary Conclusions Ottawa, December 2, 2005, 2005-084...
The Department of Finance today released
the statement of the International
Monetary Fund (IMF) Mission to Canada,
which has prepared the preliminary
conclusions of its Article IV
Consultations with the Government of
Canada. As required under Article IV of
its Articles of Agreement, the IMF reviews
economic developments and policies of each
member country, usually on an annual
basis. The IMF’s report, known as its
Mission statement, is released at the
discretion of the country being reviewed.
Since 1998, Canada has released this
statement in recognition of the importance
of the IMF’s economic surveillance
activities, and as an expression of
Canada’s commitment to ensuring that
these activities are transparent. A copy
of the IMF statement is available on the Department
of Finance website. The IMF will
release its full report on Canada next
year.
News release ~ Canada
Revenue Agency interest rates for the
first calendar quarter
Ottawa, December 2, 2005... The Canada
Revenue Agency (CRA) today announced
the prescribed annual interest rates that
will apply to any amounts owed to the CRA
and to any amounts the CRA owes to
individuals and corporations. These rates
are calculated quarterly in accordance
with applicable legislation and will be in
effect from January 1, 2006,
to March 31, 2006.
2005
Updates...
Ontario is matching several measures
announced in the 2005 federal budget. These
include medical expenses, disability amounts,
and the treatment of charitable donations for
tsunami relief. There is also a new
non-refundable tax credit for adoption
expenses.
The income threshold used in the calculation
of the Ontario Property and Sales Tax Credits
has been increased for senior couples.
The Ontario home ownership savings plan,
graduate transitions, workplace child care,
workplace accessibility, and educational
technology tax credits expired in 2004.
2005 Ontario
Tax Rates
Taxable
Income
Tax is
Rates
on the first $34,010
$ 0.00
6.05%
More than $34,010
but not exceeding $68,020
$2,058
9.15%
More than $68,020
$5,170
11.16%
Provincial Surtax
20% on tax exceeding $3,929 ($3,747 in 2004)
36% on tax exceeding $4,957 ($4,727 in 2004)
Ontario
Non-Refundable Tax Credits
2005
2004
Basic personal amount
$8,196
$8,044
Age amount
Maximum amount
Net income limit
Reduction rate
$4,002
$29,793
15%
$3,928
$29,237
15%
Spouse or common-law partner
amount or amount for an eligible dependant
Base amount
Maximum amount
$7,656
$6,960
$7,513
$6,830
Amount for infirm dependants
age 18 or older
Base amount
Maximum amount
$9,335
$3,863
$9,181
$3,791
Pension income amount
$1,133
$1,112
Caregiver amount
Base amount
Maximum amount
$17,081
$3,863
$16,762
$3,791
Disability amount
Supplement for persons under 18
Limit regarding child care expenses
and attendant care expenses
$6,622
$3,863
$2,263
$6,499
$3,791
$2,220
Tuition and education amounts
Full time / month
Part time / month
Maximum transferable
$441
$132
$5,562
$433
$130
$5,562
Donations and gifts
First $200
Over $200
6.05%
11.16%
6.05%
11.16%
Medical expenses and allowable
amount for other dependants
Medical expenses paid minus the lesser
of 3% of the net income
Maximum claim for medical expenses for
other dependants
$1,821
$5,000
$1,821
$5,000
Ontario Tax
Reduction
Base amount
$190
($183 in 2004)
Reduction for a dependant born
in 1987 or later
$350
($343 in 2004)
Reduction for disabled or
infirm dependants
$350
($343 in 2004)
Ontario Health
Premium (OHP)
The Ontario Health Premium for individuals is
based on taxable income, premiums range from $300
to $900, with the lowest income bracket starting
at $20,000. For each income bracket, premium
levels are phased in over the income range. At the
lowest income bracket, for individuals with income
over $20,000 but below $25,000, the first level of
premiums are phased in at 6% of taxable income in
excess of $20,000. premium levels for each
subsequent taxable income bracket are phased in
over the first $600 of income in that range at a
rate of 25%. The following table sets out the
income brackets and premium levels of the Ontario
Health Premiums.
Taxable
Income
Premium
First $20,000
no premium
over $20,000 up
to $25,000
(taxable income
- $20,000) x 6%
over $25,000 up
to $36,000
$300
over $36,000 up
to $38,500
$300 + (taxable
income - $36,000) x 25%
over $38,500 up
to $48,000
$450
over $48,000 up
to $48,600
$450 + (taxable
income - $48,000) x 25%
over $48,600 up
to $72,000
$600
over $72,000 up
to $72,600
$600 + (taxable
income - $72,000) x 25%
over $72,600 up
to $200,000
$750
over $200,000
up to $200,600
$750 + (taxable
income - $200,000) x 25%
over $200,600
$900
The premium applies to individual residents in
Ontario on the last day of the taxation year. The
health premium is administered and collected
through the Canada Revenue Agency under the
existing Tax Collection Agreement with Ontario and
is subject to income tax withholding and installment
rules.
Income tax
The interest rate charged on overdue
taxes, Canada Pension Plan
contributions, and Employment
Insurance Premiums will be 7%.
The interest rate paid on
overpayments will be 5%.
The interest rate used to calculate
taxable benefits for employees and
shareholders from interest-free and
low-interest loans will be 3%.
Other taxes
The interest rate on overdue and
overpaid remittances for the following
taxes will be:
Tax & Duty
Overdue remittances
Overpaid remittances
Goods and Services Tax
2.4333%
2.4333%
Harmonized Sales Tax
2.4333%
2.4333%
Air Travelers Security Charge
2.4333%
2.4333%
Excise Tax (non GST)
7%
5%
Excise Duty (except Brewer
Licensees)
7%
5%
Excise Duty (Brewer Licensees)
5%
N/A
Reduced EI rates for 2006 is basic exemption
0, rate is 1.87%, employee maximum is $729.30,
employer maximum is $1,021.02 and
self-employed is 0.
CPP maximum pensionable earnings is up to
42,100.00, basic exemption $3,500.00 and rate
is 4.95%.
November 2005 proposed income tax changes:
reduction of the lowest federal income tax
rate from 16% to 15% - up to $35,595. A $500
increase in the basic personal amount.
Canada
Revenue Agency (CRA) (CRA
date modified: 2004-10-25)
My
Account - The
way to check on the status of your refund
is online at (www.cra.gc.ca/myaccount)
available 24/7 - make sure you have your
access code available.
Tax
Package for 2004 - "Generally,
you have to use the package for the
province or territory where you resided on
December 31, 2004. However, there are
exceptions (see next section) such as if
you had residential ties
(see below) in another place. You should
have received the package you need based
on our records. Getting the right tax
package ... a General forms book and guide
for a particular province or territory,
see "Publications".
In addition, you can get the package for non-residents
and deemed residents of Canada
from CRA or any Canadian embassy, high
commission, or consulate."...
Wiggins
Accounting & Financial Services
