webtip

CRA - Sale of franchise - Could right to locate a purchaser for a departing partial owner cause association issues?

In an October 7, 2016 French Technical Interpretation (2016-0652971C6, Gladu, Guylaine), CRA addressed the impact of clauses in shareholders’ agreements (SA) in a franchise arrangement. Each franchise is held in a corporation owned equally by the franchisor and the manager of the franchise. Where the manager ceases employment, the SA would provide for the franchisor to arrange a sale of the manager’s shares to a third party, who cannot be the franchisor or an associate of the franchisor. 

CRA confirmed that the proposed right to locate a purchaser for the manager’s shares would not be considered a right for the franchisor to acquire the shares. Similarly, an automatic redemption would not be considered a right of the franchisor to force a redemption provided that the franchisor cannot control the event that would cause the redemption. As such, the proposed clauses would not cause the corporations to become associated or related.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 428

PAYROLL ADVANCES

In an April 26, 2016 Technical Interpretation (2015-0623571I7, Waugh, Phyliss), CRA opined that where an employer provides a payroll advance to an employee in respect of their future earnings, the amount is not generally considered to be a loan. A salary advance is a payment for salary, wages or commissions that an employee is expected to earn in the performance of future services. These amounts are generally included in the employee’s income under Subsection 5(1) in the year the advance is received.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 424

T-SLIP TURNAROUND - E-filed slips - generally 48 hours - Paper filed slips - around 90 days

On February 27, 2017, a CPA Canada blog (FAQs: T-slip turnaround for auto-fill my return) address how quickly T-slips filed with CRA are reflected in the My Account, Represent a Client, and auto-fill my return services, with the following information provided:

  • With 95% of slips being filed electronically, most slips are processed within 48 hours of receipt. Processing delays can occur for quality reasons, such as invalid account numbers, duplicate slips, and other errors.
  • Paper-filed slips, less than 5%, have a general standard of 90 days to process. CRA prioritizes slips which have the greatest impact, such as T3, T4 and T5 slips.
  • Amended slips vary in processing times. Electronically filed amended T3 and T5 slips are usually processed within 48 hours. The service standard for amended T4 slips filed electronically is 60 days. No standard was provided for paper-filed amended slips.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 428

 

Watch! Interview with Dean Blachford discussing Director Liability - Resigning

Dean Blachford, Tax Litigator at HazloLaw, discusses Director Liability and some considerations with regards to resigning as a director.

This video is for general information purposes only and deals with dynamic, time-sensitive and complex matters that may not apply to particular facts and circumstances. The information provided should not be relied upon as a substitute for specialized professional advice in connection with any particular matter. For more information visit videotax.com/disclaimer. ©Video Tax News Inc. 2017, All Rights Reserved.

Watch! Interview with Robert Neilson discussing re-appropriation of refunds

Interview with the counsel on record, Robert A. Neilson of Felesky Flynn LLP, in the Cybernius case; where a judicial review of CRA's rejection of re-appropriation of a withheld refund was not considered reasonable.

This video is for general information purposes only and deals with dynamic, time-sensitive and complex matters that may not apply to particular facts and circumstances. The information provided should not be relied upon as a substitute for specialized professional advice in connection with any particular matter. For more information visit videotax.com/disclaimer. ©Video Tax News Inc. 2017, All Rights Reserved.