Are You Updated With Changes In T2- Corporate Income Tax Return?
Introduction
Thank you for your support and enthusiasm for the previous article on what’s new and different in the T1 income tax return. Now we’re back with another hot topic: what new changes have been made to a corporation’s tax return.
The Canadian government makes some good decisions for People in Canada and businesses. They aid in their survival during the pandemic’s difficult period.
1. Covid19 Support Program:
Subsidies established by the government during the covid19 are now taxable as income, and businesses must report them as such on their tax returns.
The government proposed three new programs to help tourism, hospitality, and other hard-hit enterprises:
I. Tourism and Hospitality Recovery Program: The government has launched this program to assist the tourism and hospitality industries. Hotels, restaurants, bars, festivals, travel agencies, tour operators, convention centers, convention, and trade show organizers are all eligible. There are two requirements to be eligible for this program:
a. A minimum 40% reduction in average monthly revenue from the first 13 CEWS qualifying periods.
b. A minimum of 40% revenue loss in the current month.
Hardest–hit business recovery program: Hardest–hit business recovery program is a program is available to organizations that do not meet the criteria for the tourism and hospitality recovery program as well as businesses that have been severely impacted by the pandemic.
There are two eligibility requirements:
A minimum 40% reduction in average monthly revenue from the first 13 CEWS qualifying periods.
A minimum revenue loss of 40% in the current month.
III. Support in the event of a Public Health Lockdown: to meet the challenges that may arise as a result of resurgences of the covid-19 pandemics. Without regard to sector, an organization subject to a qualifying public health restriction would be eligible for support at the subsidy rates calculated in the Tourism and Hospitality Recovery Program.
Refer to this website for the subsidy rate and structure.
2. Zero-Emission Passenger Vehicles:
The prescribed amount before sales tax for zero-emission passenger vehicles purchased on or after January 1, 2022, has been increased from $55000 to $59000.
3. Country-by-country reporting:
Beginning October 1, 2021, all Canadian corporations, including parents and subsidiaries with corporations in Canada, must file form RC4649 electronically. Failure to do so will result in a fine from the appropriate authorities.
4. Small businesses air quality improvement tax credit:
The government introduced a small business air quality improvement tax credit in order to match and assist businesses. The tax credit is available for expenses incurred between September 1, 2021, and December 31, 2021. The eligible tax credit is 25% of the costs incurred to purchase or upgrade the ventilation, air conditioning, and mechanical heating devices that filter air using high-quality filters. Credit will be limited to a maximum of $10,000 per location and $50,000 in total.
5. Tax credit for fuel charge proceeds returned to farmers:
In the fiscal year 2021-22, the government introduced a refundable tax credit for fuel charge proceeds returned to eligible farming businesses under the carbon pollution pricing system. Farming expenses totaling $25000 or more are incurred by the businesses. For more information, visit the CRA website.
More updates can be found in the corporation T2 income tax return, but it is impossible to cover them all here. More information can be found by clicking here.
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