Looking back on every year there are numerous Canadian income
tax developments and changes. However in deciding on the top income
tax stories for the year our Canadian income tax law firm looked
for tax related developments that have the potential to affect a
large number of Canadian taxpayers. With this is mind, here are
Canadian income tax lawyer picks for top tax stories for 2015.
Fraudsters Impersonating CRA Collections Officers
The most important income tax story of the year is the Canada
wide epidemic of phony phone calls from crooks claiming to be CRA
collections officers. You've heard of "phishing"
scams where fraudsters try to get you to click on email links that
then download malware or spyware on your computer.
But the latest wave of fraud has to do with old-fashioned phone
calls made by crooks posing as Canada Revenue Agency (CRA)
collections officers telling that you owe more
taxes—something that strikes fear into the heart of every
Canadian. And fear is the currency of fraudsters. These fraud
artists call Canadian taxpayers and threaten imprisonment if
immediate payments for back income taxes owing are not made.
Payment arrangements using wire transfers, Western Union, prepaid
credit cards or even immediate withdrawals from bank ATMs are then
made. Thousands of Canadian taxpayers have been contacted, and
hundreds of Canadians have been duped into making payments to these
criminals in 2015. Numerous warnings have been issued by CRA, local
and provincial police forces and by the RCMP.
The CRA does not demand payment of income tax debts by wire
transfer or by any means other than cheque or money order payable
to CRA. A tax collections officers will initiate phone calls and
may visit a taxpayer's home or, in the case of corporations,
the office however CRA does not jail Canadian taxpayers for unpaid
income tax debts. If you have tax concerns and don't want to
contact CRA directly, you can always speak to one of our Canadian
tax lawyers who can do so on your behalf.
Income Tax Changes by new Liberal Government
A vigorous debate about Canadian income taxes was a prominent
feature of the 2015 Canadian election. The election of the Liberal
government under new Prime Minister Justin Trudeau brought
immediate tax changes that will affect the majority of Canadians.
The 3 most notable income tax changes, that will affect the
majority of taxpayers, are:
Reduction of taxes for the middle class
Increase of the tax rate from 29% to 33% on income over
Rollback of the tax free savings account (TFSA) limit from
$10,000 in 2015 to $5,500 in 2016
Americans in Canada and the new FATCA rules
This change affects all US citizens in Canada, so it's of
widespread effect. A new Canada- US cross-border tax agreement to
exchange financial information is now in place, and a legal
challenge to the agreement failed. The U.S. Foreign Account Tax
Compliance Act (FATCA) is designed to target tax non-compliance by
U.S. taxpayers with foreign accounts, and this includes US citizens
resident in Canada who may have no other connection with the US.
FATCA requires U.S. persons including Canadian residents holding
reportable accounts at foreign financial institutions, in other
words Canadian banks, to report information on an information form
attached to their annual tax US return. Failure to meet these
reporting requirements could result in fines of up to $50,000, and
the CRA will enforce IRS penalties. The act also requires non-U.S.
banks, that is to say Canadian banks, to provide information about
U.S. citizens to the IRS.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The CRA provides new housing rebates for individuals who have purchased or built a new house or have substantially renovated a house or made a major addition to a house who plan on living in it personally or letting a relative live there.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).