As discussed in previous blogs, the Canada Revenue Agency has
been auditing taxpayers who have attempted to shift the taxation of
their income away from their "home" province to a lower
tax rate province – such as Alberta. Canadian courts
are hearing more and more provincial "rate shopping"
cases. Further, declining corporate and personal tax rates,
the introduction of the eligible dividend regime in 2006 and recent
legislative changes to eliminate "tax product" planning
are factors that have influenced owner-managers of private
corporations to seek additional methods to reduce their overall tax
The topics mentioned above, in addition to other noteworthy tax
updates, were covered at The Canadian Tax Foundation Prairie
Provinces Tax Conference, held on May 27 & 28, in the
same city where Moodys recently opened a new office
– Edmonton, Alberta. Partners Kim G C Moody and Greg Gartner
presented at the well attended conference on topics covering Owner
Manager Remuneration and Provincial Residency, respectively.
Greg's presentation reviewed the legislative framework under
which provincial income taxes for individuals are levied. The
definition of "residence" and a number of current cases
with respect to provincial residency were also analyzed. As
well, dispute resolution mechanisms for individuals who wish to
challenge an assessment related to provincial residency were
Please click here to download a paper authored by Greg,
Residence of Individuals.
Kim’s presentation examined the impact of changes to
corporate and personal tax rates, “old rules” vs.
“new rules of thumb” for owner-manager
remuneration, planning strategies to consider and “buyer
Please click here to download a paper authored by
Kim, Owner Manager Remuneration – Current Trends,
Strategies and Challenges.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The new subsection 55(2) regime has now been enacted into law. With these new rules, the ability to pay tax-free dividends amongst related Canadian corporations, once a foundational concept of the Canadian tax system, can no longer be taken for granted for dividends received after April 20, 2015.
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