Highlights of the 2013 Federal Budget, part 2

by in Canadian Government News and Updates

Here is a continuation of the personal income tax measure included in the 2013 Budget.

  • Taxes in Dispute and Charitable Donation Tax Shelters.  Budget 2013 proposes to modify the prohibition on the CRA from taking collection action in cases of taxes in dispute involving questionable charitable donation tax shelters.  If a taxpayer has objected to an assessment of tax, interest or penalties that result from the disallowance of a deduction or tax credit claimed in respect of a tax shelter that involves a charitable donation, pending the ultimate determination of the taxpayer`s liability, to collect 50% of the disputed tax, interest or penalties.
  • Extension of the Mineral Exploration Tax Credit for Flow-Through Share Investors.  Budget 2013 proposes to extend eligibility for the Mineral Exploration Tax Credit for one year, to flow-through share agreements entered into on or before March 31, 2014.
  • Labour-Sponsored Venture Capital Corporations Tax Credit (LSVCCs).  LSVCCs are a type of mutual fund corporation, sponsored by labour unions or other labour organizations, that make venture capital investments in small and medium-sized businesses.  Budget 2013 proposes to phase out the federal LSVCC tax credit.
  • Synthetic Dispositions.  The Government is introducing specific legislative measure to ensure that the appropriate tax consequences will apply to synthetic disposition transactions or certain financial arrangements that seek to defer tax or obtain tax benefits by allowing a taxpayer to economically dispose of a property while continuing to own it for income tax purposes.
  • Consultation on Graduated Rate Taxation of Trusts and Estates.  Budget 2013 announces the Government`s intention to consult on possible measures to eliminate the tax benefits that arise from taxing at graduated rates grandfathered inter vivos trusts, trusts created by will and estates.

Here are some of the business income tax measures included in the 2013 Budget:

  • Manufacturing and processing machinery and equipment:  accelerated capital cost allowance (CCA).  Budget 2013 proposes to extend the current accelerated cost allowance by an additional 2 years. 
  • Scientific research and experimental development (SRED) program.  Budget 2013 proposes to require more detailed information to be provided on SRED program claim forms about SRED program tax preparers and billing arrangements. This measure will apply to SRED program claims filed on or after the later of January 1, 2014 and the day of Royal Assent to the enacting legislation.
  • Mining Expenses.  Budget 2013 proposes changes to better align the deductions available for expenses in the mining sector with those available in the oil and gas sector.

For a complete list of the tax measures in the 2013 Federal Budget, please go to the Budget 2013 website (http://www.budget.gc.ca/2013/doc/plan/toc-tdm-eng.html).

 

Source:  http://www.budget.gc.ca/2013/doc/plan/toc-tdm-eng.html, http://taxtips.ca/federalbudget/budget-2013.htm

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