Bill C-47, Budget Implementation Act, 2023, No. 1 was enacted on June 22, 2023, after receiving Royal Assent. Bill C-47 outlines various tax measures such as the extended mandatory disclosure rules, extension of residential property flipping rule to assignment sales, and new reporting requirements for digital platform operators.
In this article, we are going to focus on the tax administrative changes from Bill C-47, and the changes that took effect on January 1, 2024:
Electronic Payments
Remittance or payment to Canada Revenue Agency (“CRA”) must be made electronically if the amount of the remittance or payment exceeds $10,000 unless the taxpayer can’t “reasonably” remit or pay the amount in that manner. A penalty of $100 will be charged for each failure to comply with this change.
Mandatory Electronic Filing
Corporate Income Tax Returns
All corporate income tax returns must be transmitted electronically to CRA. The threshold for $1 million gross revenue has been removed, and from taxation years starting after 2023, all corporate income tax must be filed electronically.
Information Returns
The threshold for mandatory electronic filing of Information returns has been reduced to 5 slips (from 10). This change applies to the following information returns:
- Statement of Amounts Paid or Credited to Non-residents of Canada (NR4),
- Statement of Benefits (T5007),
- Statement of Contract Payments (T5018)
- Statement of Partnership Income (T5013),
- Statement of Investment Income (T5),
- Statement of Pension, Retirement, Annuity and Other Income (T4A),
- Statement of Fees, Commissions, or Other Amounts Paid to Non-residents for Services Rendered in Canada (T4A-NR),
- Statement of Remuneration Paid (T4),
- Statement Securities Transactions (T5008),
- Statement of Trust Income Allocations and Designations (T3), and
- Tuition and Enrolment Certificate (T2202)
Failure to electronically file information returns with more than 5 slips will result in penalties ranging from $125 to $2,500, depending on the number of slips.
Please note that the above list is not an exhaustive list. For a full list, please refer to Income Tax Regulation 205.1 (1).
Information (GST/HST) Regulations
For GST/HST reporting of periods that begin in 2022 or later, only a charity can file the GST/HST returns on paper and all other form of entities must file it electronically. The amended provision of Electronic Filing and Provision of Information (GST/HST) Regulations eliminated the threshold amount of $1.5 million in annual sales, and therefore, all taxpayers reporting GST/HST (other than a charity) must do so electronically. Failure to adhere to this requirement results in a $100 penalty for the first time, and $250 for each subsequent failure to comply.
Electronic Signatures
CRA allows electronic signatures on form T183 “Information Return for electronic Filing of an Individual’s Income Tax and Benefit Return” and form T2200 “Declaration of Conditions of Employment”. This measure was introduced as a temporary administrative measure as a response to COVID-19 but now it is accepted as a permanent administrative measure.
Electronic Notice of Assessment
If an individual files the income tax return electronically and the individual has authorized that notices or other communications may be made available online, then CRA will presume that a notice of assessment in respect of an income tax return is sent to the individual and received by the individual on the day that it is made available online.
If you have any questions regarding the above changes, please feel free to contact your RLB advisor.
