What's included in Budget Bill #1
Corporate tax measures
- Reduce the maximum number of required payments on account of source deductions for more than 50,000 employers
- Require certain financial intermediaries to report international electronic funds transfers of $10,000 or more to the CRA.
Personal tax measures
- Expand the list of eligible expenses under the Medical Expense Tax Credit to include costs associated with service animals that are not specially trained to assist individuals with severe diabetes, such as diabetes alert dogs, as well as amounts paid for the design of an eligible individualized therapy plan
- Extend the 15% Mineral Exploration Tax Credit for flow-through share investors for an additional year
- Introduce transitional rules for the phase out of the federal tax credit for investments in labour-sponsored venture capital corporations (LSVCC) announced in the 2013 federal budget
- Increase the maximum amount of the Adoption Expense Tax Credit to $15,000
- Introduce a Search and Rescue Volunteers Tax Credit for search and rescue volunteers who perform at least 200 hours of service in the year
- Modify pension transfer limits
- Increase the carry-forward period for donations of ecologically sensitive land to conservation charities to 10 years (from five years) for income tax purposes
- Deem the value of a gift of certified cultural property to be no greater than the donor's cost of the property, if it was acquired under a gifting arrangement that is a tax shelter.
Indirect tax measures
- Exempt hospital parking for patients and visitors from GST/HST which was announced pre-budget on January 25, 2014
- Extend the availability of the GST/HST election for closely related persons
- Expand the current GST/HST exemption for training designed to help individuals cope with a disorder or disability to also exempt services of designing such training, such as developing a training plan
- Exempt acupuncturists' and naturopathic doctors' professional services from the GST/HST
- Increase excise duty on tobacco products
- Allow the CRA to automatically determine if an individual is eligible to receive the GST/HST Credit (rather than the individual having to apply)
- Add a new administrative monetary penalty, and amend the existing criminal offence, for making false statements or omissions in an excise tax return and related offences under the non-GST/HST portion of the Excise Tax Act
- Eliminate tariffs on mobile offshore drilling units used in offshore oil and gas exploration and development.
Other tax measures
- Introduce legislation for payments made under the CRA's Offshore Tax Informant Program introduced in the 2013 federal budget
- Implement reporting requirements for international electronic fund transfers of $10,000 or more announced in the 2013 federal budget
- Introduce legislation to require Finance to annually table a list of the Government's outstanding tax measures in Parliament.
What's not included in Budget Bill #1
The NWMM does not include the more substantial tax changes in the budget such as loss of graduated rates for certain trusts, elimination of benefits for immigrant trusts, thin-capitalization, captive insurance, donation credits for certain estates, CCA changes for clean energy generation equipment and certain indirect tax changes such as the new joint venture election. Also not included are any comments on the tax areas for which consultations are still ongoing or which have not yet been announced, such as treaty shopping, offshore regulated banks, non-profit status, eligible capital property and tax transparency and BEPS.
For more information, contact your KPMG adviser.
Information is current to March 25, 2014. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500