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Who is more GILTI, Biden or Trump?
The Biden administration’s “Made in America Tax Plan” and what it could mean for U.S. citizens residing in Canada
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David Downie joins Baker Tilly as principal
Toronto, ON – Baker Tilly in Toronto is pleased to announce the arrival of David Downie in the role of principal. With more than two decades of tax experience, he brings his expertise in tax planning (both international and domestic) and reorganization, with a focus on Canadian multinationals and their global operations.
The Latest at Baker Tilly Dartmouth
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Intergenerational transfers with less strings attached (a limited time offer)
Many family-owned businesses have faced higher tax burdens when transitioning their business within their family. This effect has been due, in part, to two anti-avoidance provisions in the Income Tax Act (ITA) that are designed to prevent unapproved transactions deemed abusive by the Department of Finance. Section 55 prevents unapproved, tax-deferred capital gains stripping; section 84.1 prevents unapproved, tax-free surplus stripping. In a nutshell—an oversimplified nutshell—these two complex anti-avoidance provisions recharacterize what should be tax-free transactions into taxable ones.
2021 Federal and provincial budget highlights
Baker Tilly Canada is pleased to continue our tradition of providing valuable commentary and analysis of federal and provincial budgets. Click on any flag below to see corresponding 2021 budget highlights – from changes to personal and corporate tax measures to indirect tax updates and more. Speak to your Baker Tilly Canada advisor to understand how these policies could affect your business.
Easing the transition
The Canada Emergency Wage Subsidy (CEWS) has been an important program for businesses struggling with the economic fallout of the pandemic. This program (which began on March 15, 2020) was designed to keep employees on the payroll during a time when businesses were experiencing unprecedented disruption in revenue. The federal government is phasing out this program by reducing the subsidy rate over the remaining four periods, from June 6 to Sept. 25, 2021.
Five in five with: Mike McIsaac
“We believe in continual education and improvement of our processes. This ensures we are prepared to deliver the best results for our clients every time.”
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Get the latest news and updates
Get the latest news and updates from the experts at Baker Tilly.
Tax changes to the Canadian digital economy
In recent months, the tax treatment of non-resident and resident suppliers (i.e., Wayfair) engaged in e-commerce sales has undergone significant changes. While many of these suppliers were not required to register to collect provincial or Canadian federal sales tax in the past, those obligations have changed.
How to attract and retain talent in the new labour market
As society advances through the pandemic, 2021 could see the highest number of people (re)entering the workforce and changing jobs in recorded history.
Five in five with: Sandy Kirkwood-Pearce
“My talent is being a driving force and creator of excitement about growing, whether it’s our firm or a client’s business.”
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Four reasons to consider renting farmland
The advantages of buying property are well known to most farmers. It is a great way to build equity in your business and it usually grows in value over time. In addition, owning farmland offers more tax planning options down the road, allows you to avoid rent increases, gives you more freedom in the way you use the land and protects you from losing access to the land, in the event your landlord decides to sell the land or rent to someone else. However, in spite of all these advantages, there are also several reasons it might be preferable to rent farmland.
New tax savings for farmers buying capital assets
Farmers who are thinking of buying a major capital asset like machinery or equipment may soon see significant tax savings. In the 2021 federal budget, important changes were proposed to the capital cost allowance rules. Before these changes were introduced, capital assets were depreciated according to their class. For example, if a farmer purchased a Class 10 tractor or combine, the capital cost allowance on that asset in the year of purchase was 45 per cent. However, the new rules no longer organize assets by class, instead allowing farmers to fully expense capital assets up to $1.5 million in the year of purchase.
The drawbacks of deferring taxes
Most businesses must pay taxes on all income, including accounts receivable and inventory in the year they are created. However, farm businesses are one of the few exceptions, as they are permitted to pay taxes on a cash basis. As a result, they have the unique ability to deduct prepaid expenses and push income into future years. Rather than pay tax on inventory, they can wait until this inventory has been sold. While most farmers prefer to take advantage of this deferral opportunity, this is not always the best option.
A hot housing market and a change in use equals tax with no cash. But there is a solution.
Most Canadians know that selling their home normally will not result in income tax thanks to the principal residence exemption (PRE). Unfortunately, people tend to extend this "knowledge" into a feeling that they need never worry about tax when dealing with their principal residence.
