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Are you developing innovative processes or products, undertaking experimentation or solving technological problems? If so, you may qualify to claim SR&ED tax credits. This Canadian federal government initiative is designed to encourage and support innovation in Canada. Our R&D professionals are a highly-trained, diverse team of practitioners that are engineers, scientists and specialized accountants.
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Indirect tax
Keeping track of changes and developments in GST/HST, Quebec sales tax and other provincial sales taxes across Canada, can be a full-time job. The consequences for failing to adequately manage your organization’s sales tax obligations can be significant - from assessments, to forgone recoveries and cash flow implications, to customer or reputational risk.
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US corporate tax
The United States has a very complex and regulated tax environment, that may undergo significant changes. Cross-border tax issues could become even more challenging for Canadian businesses looking for growth and prosperity in the biggest economy in the world.
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Cross-border personal tax
In an increasingly flexible world, moving across the border may be more viable for Canadians and Americans; however, relocating may also have complex tax implications.
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International tax
While there is great opportunity for businesses looking to expand globally, organizations are under increasing tax scrutiny. Regardless of your company’s size and level of international involvement—whether you’re working abroad, investing, buying and selling, borrowing or manufacturing—doing business beyond Canada’s borders comes with its fair share of tax risks.
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Transfer pricing
Transfer pricing is a complex area of corporate taxation that is concerned with the intra-group pricing of goods, services, intangibles, and financial instruments. Transfer pricing has become a critical governance issue for companies, tax authorities and policy makers, and represents a principal risk area for multinationals.
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Succession & estate planning
Like many private business owners today, you’ve spent your career building and running your business successfully. Now you’re faced with deciding on a successor—a successor who may or may not want your direct involvement and share your vision.
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Tax Reporting & Advisory
The financial and tax reporting obligations of public markets and global tax authorities take significant resources and investment to manage. This requires calculating global tax provision estimates under US GAAP, IFRS, and other frameworks, and reconciling this reporting with tax compliance obligations.
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Transactions
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Restructuring
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Creditor updates
Updates for creditors, limited partners, investors and shareholders.
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Internal audit
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Certification – SOX
The corporate governance landscape is challenging at the best of times for public companies and their subsidiaries in Canada, the United States and around the world.
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Third party assurance
Naturally, clients and stakeholders want reassurance that there are appropriate controls and safeguards over the data and processes being used to service their business. It’s critical.
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ASPE Sec. 3041 Agriculture Understanding and applying the new ASPE Section 3041 AgricultureThe Canadian Accounting Standards Board (AcSB) has released new guidance on recognizing, measuring and disclosing biological assets and the harvested products of bio assets.
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Tax alert Agricultural Clean Technology ProgramThe Agricultural Clean Technology Program will provide financial assistance to farmers and agri-businesses to help them reduce greenhouse gas (GHG) emissions.
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Tax alert ACT Program – Research and Innovation Stream explainedThe ACT Research and Innovation Stream provides financial support to organizations engaged in pre-market innovation.
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Tax alert ACT Program – Adoption Stream explainedThe ACT Adoption Stream provides non-repayable funding to help farmers and agri-business with the purchase and installation of clean technologies.
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Builders And Developers
Every real estate project starts with a vision. We help builders and developers solidify that vision, transform it into reality, and create value.
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Rental Property Owners And Occupiers
In today’s economic climate, it’s more important than ever to have a strong advisory partner on your side.
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Real Estate Service Providers
Your company plays a key role in the success of landlords, investors and owners, but who is doing the same for you?
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Mining
There’s no business quite like mining. It’s volatile, risky and complex – but the potential pay-off is huge. You’re not afraid of a challenge: the key is finding the right balance between risk and reward. Whether you’re a junior prospector, a senior producer, or somewhere in between, we’ll work with you to explore, discover and extract value at every stage of the mining process.
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Oil & gas
The oil and gas industry is facing many complex challenges, beyond the price of oil. These include environmental issues, access to markets, growing competition from alternative energy sources and international markets, and a rapidly changing regulatory landscape, to name but a few.
On January 1, 2019, changes to the Canada Pension Plan (CPP) will come into effect.
The changes, or enhancements, are being implemented to increase a person’s pension income upon retirement from one-quarter of the person’s average annual pensionable earnings throughout their lifetime to one-third. These changes will require both employees and employers to increase their rates of contribution over the next few years.
Upcoming changes
Starting in 2019, there will be two changes to CPP rates:
- The rate of contribution will gradually increase by a total of one percent over a period of five years up to 2023.
- In 2024, a new, additional CPP contribution is required for employees earning income greater than the yearly maximum pensionable earnings ($70,100 in 2024). This additional CPP contribution will be at a rate of four percent on income between the yearly maximum pensionable earnings of $70,100 (in 2024) and the new upper limit of $74,900. In 2025, the range increases to between $72,500 and $82,700.
The changes are summarized in the following table.
Year |
Projected yearly maximum pensionable earnings (YMPE) | Projected maximum limit | CPP employer/employee contribution rates (%) | |
Rate on income up to projected YMPE | Rate on income between projected YMPE and projected max limit | |||
2018 | (actual) $55,900 | (actual) $55,900 | 4.95 | n/a |
2019 | (actual) $57,400 | (actual) $57,400 | 5.10 | n/a |
2020 | $60,100 | $60,100 | 5.25 | n/a |
2021 | $61,900 | $61,900 | 5.45 | n/a |
2022 | $63,700 | $63,700 | 5.70 | n/a |
2023 | $65,700 | $65,700 | 5.95 | n/a |
2024 | $67,700 | $72,400 | 5.95 | 4.0 |
2025 | $69,700 | $79,400 | 5.95 | 4.0 |
Note: the rate for self-employed individuals is two times the rates noted above.
Impact on businesses
It is important for employers to both develop a strategy to deal with the upcoming changes and communicate with employees the effect these changes might have on them.
With the changes to the CPP, employers are faced with increased payroll and, possibly, administrative costs. Although the additional contributions (above and beyond the 4.95 percent original CPP rate) are still deductible expenses for the employer, those additional contributions still represent an increase in costs to businesses, which is multiplied depending on the number of workers employed and their income levels. The table below shows the dollar impact of the changes to the CPP for employers at different levels of size.
For employees, these changes will result in increased annual CPP contributions as well as increased benefits received upon retirement. From a tax perspective, base contributions to the CPP (i.e. those contributions up to 4.95 percent) will still be eligible for a tax credit. Any enhanced contributions (i.e. those contributions in excess of 4.95 percent) paid by the employee will be treated as a deduction from their income.
For further information or to discuss how these changes may affect you, contact your advisor at Grant Thornton.
Ten employees total | Fifty employees total | One hundred employees total | |||||||
Employees | Salary | Employees | Salary | Employees | Salary | ||||
5 | $30,000 | 25 | $30,000 | 50 | $30,000 | ||||
5 | $60,000 | 20 | $60,000 | 40 | $60,000 | ||||
5 | $100,000 | 10 | $100,000 | ||||||
Year | Old rates | Enhanced rates | Additional costs | Old rates | Enhanced rates | Additional costs | Old rates | Enhanced rates | Additional costs |
2018 | $19,530 | $19,530 | $nil | $97,640 | $97,640 | $nil | $195,280 | $195,280 | $nil |
2019 | $19,900 | $20,500 | $600 | $99,500 | $102,510 | $3,010 | $198,990 | $205,020 | $6,030 |
2020 | $20,540 | $21,790 | $1,250 | $102,740 | $108,960 | $6,220 | $205,480 | $217,930 | $12,450 |
2021 | $20,540 | $22,620 | $2,080 | $103,180 | $113,610 | $10,430 | $206,370 | $228,210 | $20,840 |
2022 | $20,540 | $23,660 | $3,120 | $103,630 | $119,330 | $15,700 | $207,260 | $238,660 | $31,400 |
2023 | $20,540 | $24,690 | $4,150 | $104,120 | $125,160 | $21,040 | $208,250 | $250,320 | $42,070 |
2024 | $20,540 | $24,690 | $4,150 | $104,120 | $126,690 | $22,070 | $209,240 | $253,390 | $44,150 |
2025 | $20,540 | $24,690 | $4,150 | $105,110 | $128,290 | $23,180 | $210,230 | $256,580 | $46,350 |
Figures rounded to nearest $10.