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TAX TIP Businesses: Here Are the Top Changes this Year that Will Affect Business Taxes in 2024

Thursday, 21 December 2023 02:37.PM

This year, there have been many announcements about changes that will affect business taxes in 2024. We have pulled them together here for quick reference, along with a list of resources that can help you manage these changes and your tax affairs in the new year.

Canada Pension Plan – What's new in 2024

Here's what's changing for the Canada Pension Plan (CPP) in 2024:
• For information on the changes to maximum pensionable earnings visit CPP contribution rates, maximums and exemptions – Calculate payroll deductions and contributions; for information on the second earnings ceiling visit Second additional CPP (CPP2) contribution rates and maximums – Calculate payroll deductions and contributions; for information on employee CPP and CPP2 contribution rates for 2024 visit Calculate second additional CPP contributions (CPP2) deductions - Canada.ca
• There are new T4 boxes for both CPP and Quebec Pension Plan (QPP) for the new contributions that begin in 2024. For more information on these reporting obligations visit T4 slip Information for employers
For information on what you need to do for the 2024 CPP changes visit canada.ca/cpp-enhancement and Calculate second additional CPP contributions (CPP2) deductions - Canada.ca

Changes to mandatory electronic filing thresholds

Recent legislation amended mandatory electronic filing thresholds for certain information returns (slips and summaries), including T4 payroll return (remuneration paid), T5 (investment income), T3 (trust income) and T4A (pension and other income return). For more information visit Businesses: Beginning January 1, 2024, if you file six or more information returns you must file them electronically to avoid penalties and How to file information returns - Canada.ca.

Changes to electronic filing for GST/HST registrants

For GST/HST reporting periods that begin in 2024, all GST/HST registrants, with the exception of charities and selected listed financial institutions, will be required to file returns electronically. To learn more, visit: File the return – Complete and file a GST/HST return - Canada.ca.

Reporting requirements for the Canadian Dental Care Plan

The Canadian Dental Care Plan (CDCP) will provide dental coverage for uninsured Canadians with an adjusted family net income of less than $90,000. There are new reporting requirements that begin with the 2023 tax year for issuers (including employers and pension plan administrators) of the T4 Statement of Remuneration Paid and T4A Statement of Pension, Retirement, Annuity, and Other Income. For more information on the requirements for the CDCP visit Employers and pension plan administrators: Changes coming to T4/T4A reporting - Canada.ca.

New reporting requirements for trusts

The Government of Canada has introduced new reporting requirements for trusts. Affected trusts will be required to file an annual T3 Trust income tax and information return (T3 Return), including a Schedule 15, Beneficial Ownership Information of a Trust, if applicable, with the CRA for tax years ending after December 30, 2023.

These new reporting requirements are part of Canada's international commitment to the transparency of beneficial ownership information, as well as its continuous efforts to maintain the effectiveness and integrity of the Canadian tax system.

For more information on these new requirements, including information for bare trusts that may be filing for the first time, please refer to our Frequently Asked Questions.

Other changes to reporting requirements

In another change to reporting requirements, issuers can now distribute T4A and T5 slips more conveniently and efficiently. If you issue these slips and want more information visit Distribute the slips.

Province of employment policy

There is a new CRA administrative policy regarding province of employment (POE) that comes into effect on January 1, 2024. Where a full-time remote work agreement was made, an employee will be considered reporting to work at an establishment of the employer if they can be reasonably considered "attached to an establishment of the employer". For more information on this policy and the indicators to determine if they can be considered attached, see Determine the province of employment (POE) - Set up and manage employee payroll information.

Note on electronic filing of Special Elections and Returns

The CRA is digitizing the Special Elections and Returns (SERs) forms which will allow taxpayers to file electronically using Submit Docs or certified software.

• What's new: To avoid processing delays, please use the most recent versions of the Special Election and Returns forms. As of October 2023, older versions will be returned to you for resubmission

Is this your first time filing as a business or self-employed individual? Do you want to better understand your tax obligations?

The CRA offers a https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/liaison-officer-initiative-loi.html to owners of small businesses and self-employed individuals to help them understand their income tax, GST/HST, and payroll obligations. A free in-person or virtual visit with a liaison officer is 100% confidential. The information you choose to discuss with a liaison officer will not be shared with other areas of the CRA, or anyone else. These personalized sessions can provide support, guidance, and help ease the stress of filing.

Looking for more information?
As you make any kind of changes to your business, you might have questions and need information and guidance from the CRA. We can help. The Resources for Small and Medium businesses web page provides direct access to tax-related services and information for businesses.

Is there an error on your tax return that needs to be fixed?
If you think you have made an error on your tax return you can request a reassessment.

You might be eligible for relief under the Voluntary Disclosures Program (VDP). The VDP grants relief on a case-by-case basis to taxpayers and registrants who voluntarily come forward to fix errors or omissions in their tax filings before the CRA knows or contacts them about it. The VDP receives applications from a wide range of taxpayers and registrants who want to correct various tax situations. You can find information on how to apply at Voluntary Disclosures Program.

SOURCE: Canada Revenue Agency

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