Business Owners: Watch Out For These 4 Tax Changes in 2024 in Canada
Stay updated with current accounting standards, business compliance, tax preparation tips, and latest news.
19 Feb 2024
New Tax Change & Impact
Starting in 2024, if you're a business registered for GST/HST (except charities and certain financial institutions), you must submit your tax returns online for reporting periods. E-filing will save time, reduce errors, and improve data analysis for both businesses and the government.
Proactively manage the finances of your business and adapt easily to the ever-changing market conditions with CJCPA. Our experts here have been in the tax business for more than 30 years. We have made Corporate Tax filing Canada simple for businesses, trusts, and individuals alike.
From our FREE 30-minute consultation with a CPA in Surrey Canada, you’ll find out how much are you missing on credits, and how easy it is to file taxes. Keep yourself informed of all the Canadian tax news with our blogs, and don’t forget to book your free consultation from our website.
Business Owners: Watch Out For These 4 Tax Changes in 2024 in Canada
New year, new tax measures — there are many things to expect in 2024. Starting soon, you'll have to file your taxes online, trusts will need to be more open about their information, and using clean technology can earn you some good tax deductions. That's just scratching the surface. There are more details to find out! Watch out for these 4 latest tax changes that will affect your pocketbook in 2024 listed in our blog. Also, check out our blog section regularly for the latest updates on canadian tax news. Before you read further: CJCPA offers businesses their first consultation free of charge! Take advantage and plan your taxes correctly with an expert CPA, only at CJCPA!1. Mandatory Electronic Filing Thresholds
New Tax Change & Impact
Beginning January 1, 2024, if you file six or more information returns you must file them electronically. Non-compliance will invite penalties.Explanation:
New rules have changed the requirements for submitting certain forms. Starting from January 1, 2024, if a business submits six or more information forms (like slips and summaries), they must do it electronically. Before, if a business had 50 or fewer forms, they could send them on paper, but now that option is gone. If a business is submitting five or fewer forms, they still have the choice to send them on paper. Examples of these forms include:- T3 (trust income)
- T5 (investment income)
- T4 payroll return (remuneration paid)
- T4A (pension and other income return)
2. New Reporting Requirements for Trusts
New Tax Change & Impact
Trusts with tax years ending after December 30, 2023, must file a T3 Return with Schedule 15 (Beneficial Ownership Information). Trusts have to be more transparent and compliant with international commitments.Explanation:
Starting in 2024, Canadian trusts face new reporting requirements aimed at boosting transparency. Most trusts must now file an annual T3 Return with the CRA, along with Schedule 15 detailing beneficial ownership information like names, addresses, and tax IDs for trustees, beneficiaries, and others with control. Notably, even "bare trusts" previously exempt from filing are now caught under the net. Schedule 15 delves deeper, requiring information for reportable entities who existed during any part of the tax year, even if they're no longer involved at year-end. Exemptions are scarce, with only "listed trusts" spared from Schedule 15. Failure to comply can result in hefty penalties, though CRA may grant relief in unforeseen circumstances. We suggest you to seek professional help for T3 and Corporate Tax filing Surrey Canada to stay compliant.3. Changes in Canada Pension Plan
New Tax Change & Impact
Canadian businesses will owe higher tax remittances due to new CPP2 contributions on employee earnings above $68,500 starting in 2024.Explanation:
The Year's Maximum Pensionable Earnings (YMPE) is the highest income that regular CPP contributions apply to. It increases to $68,500 in 2024 from $66,600 in 2023. Year's Additional Maximum Pensionable Earnings, or YAMPE is a new ceiling, introduced in 2024, which defines the income range for additional CPP2 contributions. YAMPE is set at $73,200 in 2024, approximately 7% higher than the YMPE. This will be 14% higher in 2025 and future years. Employees and employers will both contribute 4% of earnings between the YMPE and YAMPE as CPP2 Contributions. This means businesses will need to withhold and remit additional CPP2 contributions from employees earning above $68,500.4. Mandatory E-Filing of GST/HST Returns
New Tax Change & Impact
Starting in 2024, if you're a business registered for GST/HST (except charities and certain financial institutions), you must submit your tax returns online for reporting periods. E-filing will save time, reduce errors, and improve data analysis for both businesses and the government.
Explanation:
Filing your GST/HST returns online (GST34) isn't just an option—it's mandatory for certain businesses in Canada. In following situations, e-filing is compulsory: For Builders:- No Exceptions: No matter how much you sell in a year, if you're in the construction business, e-filing is your go-to.
- Special Cases: Certain situations require even builders to be extra diligent with online filing. This includes reporting recaptured input tax credits (RITCs), claiming provincial new housing rebates, reporting transitional tax adjustments, and selling grandparented housing above $450,000 (including any other taxable supplies to the buyer). Additionally, if you sell HST-subject housing you purchased on a grandparented basis, online filing is mandatory.
- Million-Dollar Mark: While builders always file electronically, non-builders only need to go digital if their annual taxable supplies surpass $1.5 million.
- Recaptured Input Tax Credits (RITCs): If you need to report RITCs, regardless of your business type, online filing is the way forward.
- Exceptions Exist: Selected listed financial institutions, even if they fall under the categories mentioned above, are exempt from mandatory e-filing.
- Penalties Lurk: Don't ignore the e-filing requirement! Failing to file electronically can lead to unpleasant consequences.
- Paper Options for Rebates: While filing your returns online is preferred, if your rebate application doesn't have an electronic option, you can mail it along with your online return.
Stay On Top Of Taxes With CJCPA
Proactively manage the finances of your business and adapt easily to the ever-changing market conditions with CJCPA. Our experts here have been in the tax business for more than 30 years. We have made Corporate Tax filing Canada simple for businesses, trusts, and individuals alike.
From our FREE 30-minute consultation with a CPA in Surrey Canada, you’ll find out how much are you missing on credits, and how easy it is to file taxes. Keep yourself informed of all the Canadian tax news with our blogs, and don’t forget to book your free consultation from our website.
