What are the tax changes happening in 2020?
• Basic personal amount: The basic personal amount has increased to $13,229 this year. It will increase to $15,000 by 2023.
• Home Buyers’ Plan: Starting this year, individuals who experience a breakdown of a marriage or common law partnership (in the year of making a withdrawal or in any of the four preceding calendar years) will be able to access the Home Buyers’ Plan without having to pay tax on the withdrawal.
• Permitting additional types of annuities under registered plans: two types of annuities will be permitted under the tax rules for certain registered plans starting this year – purchases of advanced life deferred annuities will be permitted from a RRSP, RRIF, deferred profit sharing plan, pooled registered pension plan and defined contribution registered pension plan; and variable payment life annuities will be permitted under a PRPP and defined contribution RPP.
• Personal income tax credit for digital subscriptions (journalism): Individuals will be allowed to claim up to $500 in costs paid towards eligible digital subscriptions in a taxation year, for a maximum tax credit of $75 annually.
• Qualified donee status (journalism): Certain journalism organizations operating on a not-for-profit basis will be allowed to register under a new category of tax-exempt qualified one. Canadians may claim the charitable donation tax credit or deduction for donations.
• Contributions to a specified multi-employer plan for older members: The government proposed to amend the tax rules to prohibit contributions to a Specified Multi-Employer Plan (SMEP) in respect of a member after the end of the year the member turns 71 years old and to a defined benefit provision of a SMEP if the member is receiving a pension from the plan except under a qualifying phased retirement program.
• Foreign affiliates – reporting requirements: The information return deadline in respect of a taxpayer’s foreign affiliates is accelerated from 15 months after year end to 12 months after year end for taxation years of a taxpayer that begin in 2020 and to 10 months after year end for the taxation years of a taxpayer that begin after 2020.
• Multilateral Convention to implement tax treated related to measures to prevent base erosion and profit shifting: The Multilateral Instrument or MLI will reduce opportunities for tax avoidance by multinational enterprises.