The Year-End Tax Planning guide is primarily intended for individuals who have accumulated a certain amount of wealth or who own their business (large or small). It includes nine year-end tax planning checklists and several helpful information tables.
What's new?
Response to COVID-19 - introduction of wage subsidies
(eg Canada Emergency Wage Subsidy) and benefits (eg Canada Economic
Stimulus Benefit); extension of certain payment and production deadlines.
Employee stock options - proposed limits to restrict the beneficial treatment of stock options.
Provinces and territories
Response to COVID-19 - introduction of various incentives (eg, reimbursement of BC PST on certain machinery and equipment); extension of certain production deadlines
- Alberta - decrease from 11% to 10% on January 1, 2020 and to 8% on July 1, 2020
- Nova Scotia - down from 16% to 14% on April 1, 2020
- Quebec - decrease from 11.6% to 11.5% on January 1, 2020
Small Business Rates
- Nova Scotia - decrease from 3% to 2.5% on April 1, 2020
- Ontario - down from 3.5% to 3.2% on January 1, 2020
- Prince Edward Island - decrease from 3.5% to 3% on January 1, 2020 and to 2% on January 1, 2021
- Quebec - drop in the going rate from 6% to 5% on January 1, 2020 and to 4% on January 1, 2021; small business CCPCs M&T rate remains at 4%
- Yukon - Decrease in non-M&T and O&M rates from 2% and 1.5% to 0% respectively on January 1, 2021
Research and development (R&D) tax credits
Alberta - credits are eliminated for
qualifying expenses incurred after December 31, 2019, but a new
innovation and employment grant that supports R&D for SMEs will be
available starting January 1, 2021
Quebec - the expenditure exclusion
threshold applies only to the R&D salary tax credit for eligible
expenditures incurred for a taxation year beginning after March 10, 2020
Beneficial ownership records
New
(British Columbia, Manitoba, Prince Edward Island) and planned (Nova
Scotia, Quebec and Saskatchewan) provincial requirements for private
companies to maintain ownership records
Year end tax planning checklists
The assistance of your PwC advisor is essential to properly analyze the following year-end tax planning strategies. In addition to tax considerations, your financial plan should take into account investment philosophies, sound business practices, and motivational goals. Owner-operators must ensure that sufficient funds are retained to achieve business objectives; Given the uncertain economic conditions, cash flow management is particularly important.
Year end tax planning tips
With December 31st just around the corner, now is a good time to review some tax return & preparation services that need to be in place before the end of the year.
Read More : Year end tax planning - 2020: For individuals and owner-operators
Pay Deductible or Creditable expenses before the end of the year
Certain expenses can only be deducted from
taxable income or qualify for a tax credit if the amount is paid before
the end of the calendar year. If you plan to pay an expense that is tax
deductible or qualifying for a credit early next year, consider doing so
before the end of the year to take advantage of the deduction or credit
on the income tax return.
