In a December 3, 2015 French Technical Interpretation (2015-0613761E5, Seguin, Marc), CRA discussed the effect of an eligible ecological property gift (Paragraph 110.1(1)(d)) by a corporation on its capital dividend account (CDA).
When such a gift is made, the taxable capital gain pursuant to Paragraph 38(a.2)(i) is deemed to be $0, therefore, the addition to the CDA would be the full amount of the gain.
For further information see VTN Monthly Tax Update Seminar, Issue No. 414
In an October 9, 2015 French Technical Interpretation (2015- 0595671C6, Deslandes, Nancy), CRA noted that when the deductibility of an intercompany management fee is denied, CRA generally accepts the adjustment of the income of the recipient company to reduce the amount if:
To make the adjustment, the beneficiary company must send a written request to CRA and demonstrate that it paid, or has agreed to pay, the equivalent of the amount that was denied.
That said, in certain cases, CRA may not apply this general position if, for example, there is an abuse or deliberate overstatement of fees.
For further information see VTN Monthly Tax Update Seminar, Issue No. 414
An introduction to the Collaborative Divorce Process whereby proceedings are completed with a team of Registered Collaborative Professionals rather than a Judge. Interview with Agnes Leung, CPA CA, CBV, RCP
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In an October 27, 2015 Tax Court of Canada case (Acsis EHR Inc. vs. H.M.Q., 2012- 4645(IT)G), at issue was whether the taxpayer could claim SR&ED expenditures in the amount of $278,104 and $269,690 for the years 2005 and 2006, which corresponded to $125,858 and $113,573 of Investment Tax Credits.
Taxpayer wins
The Court found that the documentary evidence, coupled with oral testimonies, supported the finding that the taxpayer engaged in systemic investigations and undertook tests to resolve the technological uncertainties. The taxpayer identified problems with the project, developed its objectives, formulated hypotheses and testing scenarios, and modified or re-developed its approach in response to the results it obtained.
The Court also noted that although the taxpayer did not retain detailed records, its approach was similar to the scientific method in that uncertainties and objectives were identified, and hypotheses, trials and testing were formulated.
For further information see VTN Monthly Tax Update Seminar, Issue No. 414
Since the advent of personal tax credits, individuals have been entitled to a Federal credit at the lowest personal tax rate (presently 15%) for the first $200 of donations claimed in a year and at the highest Federal rate (historically 29%) on any excess.
The Draft Legislation released on December 7, 2015 (see VTN 413(1)) proposes to increase the highest personal tax rate to 33% and also to change the credit for charitable donations in excess of $200, both effective in 2016. The credit for donations in excess of $200 will be increased to 33%, but only to the extent the individual has taxable income subject to the new 33% personal tax rate (income over $200,000 for 2016).
Only gifts made after 2015 will qualify for the enhanced credit, so donations made in 2015 or prior years and carried forward will not generate this enhanced credit.
For further information see VTN Monthly Tax Update Seminar, Issue No. 413