Harper Government Provides Continued Tax Relief in 2013

Ottawa, Ontario, January 2, 2013... The Honourable Gail Shea, Minister of National Revenue, today highlighted the tax relief measures that the Harper Government has made available to Canadians through Canada's Economic Action Plan. As Canadians prepare to file their 2012 taxes, they will be able to claim the Family Caregiver Tax Credit for the first time. This new tax relief measure is only one of many introduced since 2006 to keep taxes low for Canadian families and businesses.

"Our Government is committed to supporting hardworking Canadians and their families," said Minister Shea. "We will continue to provide tax relief so that Canadians can keep more of their hard-earned dollars and invest in the economy."

Claiming these credits by filing online and using direct deposit will, in most cases, help individuals receive a refund in as little as eight days, compared to four to six weeks for a paper return.

The Harper Government has introduced or improved a number of tax relief measures for Canadians, including:

• The Family Caregiver Tax Credit – Is a 15 per cent non-refundable tax credit on an amount of $2,000 that provides tax relief to caregivers of infirm dependant relatives. This includes, for the first time, infirm spouses, common-law partners, and minor children. Canadians can claim this new, non-refundable tax credit for the first time when filing their 2012 taxes.
• The Medical Expense Tax Credit – In order to fully recognize the medical and disability-related costs incurred by caregivers, the Harper Government has removed the $10,000 limit on the amount of eligible expenses a caregiver can claim in respect of financially dependent relatives.
• The First-Time Home Buyers' Tax Credit – Assists first-time home buyers with the costs associated with the purchase of a home, such as legal fees. More than 550,000 Canadians have taken advantage of the First-Time Home Buyers' Tax Credit.
• The Children's Fitness Tax Credit – Canadian families can claim a 15 per cent non-refundable tax credit on an amount up to $500 for the cost of registering a child in eligible physical activity programs, such as soccer or hockey teams. For the 2011 tax year, over 1.5 million families took advantage of the Children's Fitness Tax Credit.
• The Hiring Credit for Small Business – Small businesses that meet certain criteria and paid more in Employment Insurance premiums in 2012 over 2011 are eligible for the credit, which puts up to $1,000 back into the accounts of job creators. As of September 30, 2012, over $200 million has been credited to over 500,000 eligible employers.
• The Children's Arts Tax Credit – Canadian families can claim a 15 per cent non-refundable tax credit on an amount up to $500 for the cost of registering a child in eligible artistic, cultural, or other programs, such as music lessons or tutoring. Over 460,000 families claimed the Children's Arts Tax Credit in the 2011 tax year.
• The Apprenticeship Job Creation Tax Credit – Provides employers with a tax credit of up to 10 per cent of the eligible wages payable to eligible apprentices. The maximum credit an employer can claim is $2,000 per year for each eligible apprentice. For the 2011 tax year, more than 10,000 employers across Canada used the Apprenticeship Job Creation Tax Credit.
• The Tradesperson's Tool Deduction – Allows tradespeople to deduct from their income part of the cost of tools purchased throughout the year.
• The Textbook Tax Credit – In order to better recognize the cost of textbooks, this credit provides increased tax relief to students in addition to the Tuition and Education Tax Credits. Students must first claim their credit on their own returns, but may be able to transfer unused amounts to a parent, grandparent, spouse or common-law partner.
• The Universal Child Care Benefit (UCCB) – Gives families with young children more choice in child care by providing $100 per month for each child under age six. Canadians received almost $2.7 billion in UCCB payments in 2011.
• The Tax-Free Savings Account (TFSA) – Allows all Canadians to earn tax-free income through a range of investment products. TFSAs have become increasingly popular, with approximately 8.2 million Canadians having opened an account and roughly 2.5 million Canadians contributing the maximum in 2011. Starting on January 1, 2013, Canadians will be able to contribute $5,500 to their TFSAs annually.
• The Registered Disability Savings Plan – A long-term savings plan to help Canadians with disabilities and their families save for the future. Since being introduced by the Harper Government in 2008, over 60,000 plans have been opened.
• The Canada Employment Credit (CEC) – A 15 per cent non-refundable tax credit on an amount of $1,095 in employment income, the CEC was introduced by the Harper Government to recognize employees' work expenses for items such as home computers, uniforms and supplies.
• The Public Transit Tax Credit – Allows Canadians to claim the full amount they spend on eligible transit passes for the year. In 2011, more than 1.6 million Canadians claimed this credit.
• The Volunteer Firefighters' Tax Credit – Available to any volunteer firefighter who serves at least 200 hours per year at one or more fire departments in their community. In 2011, more than 37,000 Canadian volunteer firefighters took advantage of this new tax credit.

"Our Government is proud of the tax relief we have put in place over the last number of years to reduce the tax burden on Canadians families and businesses," said Minister Shea. "We encourage all Canadians to claim the credits to which they are entitled when they file their 2012 taxes."

As a direct result of the Harper Government's strong record of providing tax relief to Canadians, the average family of four now receives more than $3,100 in extra tax savings. The federal tax burden for all Canadians is now the lowest it has been in half a century.

For more information on the various tax measures supporting working Canadians and their families, go to http://www.cra-arc.gc.ca/taxsavings/.

The Canada Revenue Agency encourages Canadians to take advantage of its fast, easy, and secure online services to file their tax and benefit returns.

Source: Canada Revenue Agency, January 2013

The underground economy (UE) makes it hard for law-abiding Canadian businesses to compete because it gives an unfair, illegal advantage to those who cheat the tax system.

The Canada Revenue Agency (CRA) is taking action to combat the UE to ensure a fair tax system for all.

What is the Underground Economy?

The UE is any legal business activity that is unreported or under-reported for tax purposes. This can include failing to file returns or omitting an entire business activity, also referred to as “moonlighting” or working “off the books.” The UE also includes under-reporting income received, such as “skimming” a portion of business income, bartering, or failing to report a portion of employment income such as tips and gratuities. There are many other names used to describe the UE, including the shadow economy, the cash economy and the unobserved economy.

Why is the UE harmful to businesses?

The UE has a negative impact on businesses, consumers, and the Canadian tax base because it undermines the competitiveness of businesses that follow the law. Businesses that offer lower prices because of their failure to comply with Canada’s tax laws gain an unfair advantage. Tax-cheating employers also gain an unfair competitive advantage by paying wages in cash, under the table, in order to avoid paying the employer portion of employment insurance premiums and Canada Pension Plan contributions. Their employees are also deprived of benefits from these important social programs.

Why is the UE harmful to consumers?

Those who avoid paying taxes are taking money that is needed for important investments in schools, hospitals, and other vital government services.

Doing cash transactions with no written contract or receipt to support a claim makes it difficult for consumers to seek recourse and offers no protection to the consumer. Those who take part in the UE are doing so at the expense of the public. The UE also undermines the public’s perception of the fairness of tax laws. Tax cheating places an unfair burden on law-abiding businesses and individual taxpayers and it jeopardizes the integrity of Canada’s tax base.

What are the consequences of participating in UE activities as a business?

The CRA is committed to administering Canadian tax laws in a fair and equitable manner. When taxpayers do not comply with tax laws, the CRA takes action.

Paying taxes is the law. Evading taxes is illegal and can result in criminal convictions leading to fines and jail time in addition to any taxes, interest, and penalties owing under the Income Tax Act and the Excise Tax Act. For more information about criminal convictions, go to http://www.cra-arc.gc.ca/nwsrm/cnvctns/menu-eng.html.

What is the CRA doing to address the underground economy?

The CRA has a variety of tools to detect those who do not report all of their income, including on-site visits by officers, information obtained from third-party reporting, leads from other audit files, informants, and indications that taxpayers are living beyond the level of income they report.

Identifying and addressing industry sectors where the UE has become widespread, such as construction, home renovation, retail trade, and accommodation and food services will continue to be a priority for the CRA.

The CRA uses a mix of outreach, education, communications, and compliance actions, including audits and criminal investigations, to combat the UE. In doing so, the CRA collaborates with other federal departments, provincial and territorial governments, professional organizations, and key industry groups.

It’s not too late to correct your mistakes.

If you haven’t declared all of your sales and income in the past, you may be able to correct your information using the CRA’s Voluntary Disclosures Program (VDP). If you make a full disclosure before any audit or criminal investigation is started, you may only have to pay the taxes owing plus interest, but not the penalties. The CRA wants Canadians to have the information and tools they need to meet their tax obligations voluntarily. For more information about the VDP, go to www.cra.gc.ca/voluntarydisclosures.

Canada continues to have one of the highest rates of compliance in the world. The CRA is committed to combatting the UE to ensure a fair tax system. For more information on the UE, go to www.cra.gc.ca/undergroundeconomy.

Canada Revenue Agency Reduces the Compliance Burden for Small Businesses

Ottawa, Ontario, May 31, 2012... The Canada Revenue Agency (CRA) has released its fourth and final report on the recommendations of its Action Task Force on Small Business Issues.

A key CRA priority is to make it easier for businesses to comply with Canada’s taxation system, while at the same time maintaining the system’s integrity and fairness. Over the past five years, the CRA has addressed all 61 recommendations made by the Agency’s Action Task Force on Small Business Issues, making significant progress in reducing the paper burden for small businesses.

Established in the summer of 2006, the CRA’s Action Task Force was a joint public/private sector task force composed of small business owners, representatives from a number of key business organizations, and senior CRA and Industry Canada officials. Its mandate was to identify CRA’s administrative practices that imposed the greatest burden on small businesses and to develop solutions that would systemically reduce this burden.

The task force’s recommendations focused on three main goals:

1. To simplify, improve, and, where appropriate, reduce the frequency of small business interactions with the CRA;
2. Improve how and when the CRA communicates with small businesses; and
3. Make burden reduction systemic within the CRA.

In responding to each of the task force’s recommendations, the CRA undertook a broad range of measures, including improving electronic services, increasing filing and remitting thresholds, and establishing a framework to measure progress in burden reduction. Other specific actions included:

• continued refinement and expansion of the on-line service called My Business Account to provide business owners with faster, more accessible, and more transparent government service;
• continued outreach and consultation with small businesses;
• using innovative ways and formats to convey information including business-related Webinars and videocasts; and
• working closely with the Department of Finance and provincial and territorial counterparts to identify ways to reduce the burden on small business.

The Final Report on Action Items summarizes the actions taken by the CRA to respond to all 61 recommendations, and is available on the CRA website at www.cra.gc.ca/atfreport.

Source: Canada Revenue Agency Newsroom 2012

Harper Government Announces Improvements to the Foreign

Convention & Tour Incentive Program

Summerside, PEI, May 4, 2012 - The Honourable Gail Shea, Minister of National Revenue, today announced administrative improvements to the  Foreign Convention and Tour Incentive Program (FCTIP) as part of the Harper Government’s commitment to Canada’s Federal Tourism Strategy. These changes will further secure Canada’s place as a destination of choice for group travel.

“Canada’s Federal Tourism Strategy sets out a new approach to strengthening Canada’s tourism sector, so that the tourism industry can continue to make a significant contribution to creating jobs and growth,” said Minister Shea.

The FCTIP provides Goods and Services Tax/Harmonized Sales Tax (GST/HST) rebates on certain property and services used during conventions held in Canada, and on the accommodation portion of tour packages for non-residents. The administrative improvements announced today respond to requests from the tourism industry by launching a GST/HST rulings service to inform tour operators in advance about whether their tour packages will be eligible for a rebate; streamlining the processing of FCTIP rebate claims; creating and distributing a multilingual information pamphlet on the program; and making information on the FCTIP easier to find on the CRA website.

“In making it easier for tour operators to get their rebates, the improvements to the Foreign Convention and Tour Incentive Program will help generate sales for our members,” said Mr. Anthony Pollard, President and CEO of the Hotel Association of Canada. “We have a shared interest with the Government of Canada in ensuring that the program acts as an incentive in bringing visitors to Canada.”

“We are pleased that the Canada Revenue Agency is working with the tourism industry to improve the effectiveness of the Foreign Convention and Tour Incentive Program,” said David Goldstein, President and CEO of the Tourism Industry Association of Canada. “The administrative changes to the FCTIP are positive steps that will make this program work better for international tour operators and tourism businesses in Canada.”

For more information about Canada’s Federal Tourism Strategy, go to www.tourism.gc.ca.

Source: Canada Revenue Agency, 2012

Taxpayer Relief Measures Available to Canadians Affected

Ottawa, Ontario, September 1, 2011... The Honourable Gail Shea, Minister of National Revenue, would like all Canadians who were affected by the recent tornado in Goderich or were impacted by Hurricane Irene to know that the Canada Revenue Agency (CRA) has taxpayer relief provisions available to them if they are unable to meet their tax obligations because of these natural disasters.

“My sincere sympathy goes out to the people of Goderich who were harmed by the devastating tornado that swept through the city on August 21^st. I also deeply sympathize with all of those Canadians whose lives have been disturbed by Hurricane Irene. I know that your first concern is to begin to re‑build your lives, and in some cases, your homes and your businesses too.”

“I would like you to know that you have one less thing to worry about right now,” added Minister Shea. “If you cannot meet your tax obligations due to a natural disaster, you can be given special consideration by the Canada Revenue Agency.”

The CRA has taxpayer relief provisions in place that use a balanced approach to help taxpayers to resolve tax issues that arise through no fault of their own. Under these provisions, any taxpayer can apply to the CRA to have interest and/or penalties waived or cancelled in situations where they are unable to file a tax return and/or make a payment on time due to a natural disaster or other extraordinary circumstances beyond their control. Taxpayers should submit their request in writing using form RC4288, Request for Taxpayer Relief. The CRA will consider these requests on a case-by-case basis.

Affected taxpayers who have questions or concerns about the CRA’s taxpayer relief provisions can access additional information on the CRA website athttp://www.cra-arc.gc.ca/gncy/cmplntsdspts/txpyrrlf-eng.html. or they can call the CRA at 1-800-959-8281. Business owners and self‑employed individuals can call the CRA at 1-800-959-5525.

Source: Canada Revenue Agency