Segal LLP is pleased to announce the firm’s two new partners.
Candy Hsieh, CPA, CA, and Jason Montgomery, CPA, CA, have joined the firm’s partnership group, effective January 1st, 2021.
Candy Hsieh joined Segal in October of 2006. She plays an integral part of Segal’s assurance and advisory practice. She has extensive experience in providing clients with tax planning and leading audit, review and compilation engagements across a multitude of industries including owner-managed companies, non-resident corporations with subsidiaries in Canada, private equity groups, real estate, financial services and professional services.
Candy is a dedicated client service professional who provides her clients with results that are both strategic and practical when requested to assist in their personal and financial matters. Her strong analytical, business and tax skills together with a consistent collaborative approach has enabled her clients to achieve their goals. She has earned her clients’ appreciation for protecting their assets and minimizing their taxes.
Jason Montgomery began his career at Segal in 2004 as the firm’s first ever co-operative education student out of Wilfrid Laurier University, where he graduated from the Honours Bachelor of Business Administration program (2006).
Jason is a trusted advisor at Segal LLP as part of Segal’s assurance and advisory practice. He is responsible for delivering exceptional service to clients across various industries including retail, wholesale/distribution, financial and professional services, information technology, construction, real estate and not-for-profit. Clients appreciate his insight into their financial results and his help with advising on tax matters.
We extend our sincere congratulations to both Candy and Jason and welcome them to the Segal partner group.
416-774-2486
chsieh@segalllp.com
416-774 2487
jmontgomery@segalllp.com
The Canada Revenue Agency (CRA) will release a revised version of the form T1134, Information Return Relating to Controlled and Non-Controlled Foreign Affiliates, in January 2021. The revised form will require taxpayers to furnish detailed information and events within the group of foreign affiliates. The revised form T1134 will take into consideration the last legislative amendment made in the year 2012 as well as address the CRA’s crucial business requirements and some of the concerns brought forward by the tax community on compliance.
In order to allow for taxpayers to be prepared for the changes, the CRA has released a preview of the revised form. The new version of the form T1134 will be effective for taxation years or fiscal periods that begin after 2020 and must be filed no later than 10 months from the taxpayers’ year-end. For taxation years or fiscal periods that begin in 2020, the old form T1134 will continue to be used and must be filed no later than 12 months from the taxpayers’ year-end.
Highlights of the key changes to the form T1134 are discussed below.
Background
The form T1134 is required to be filed by Canadian resident taxpayers including corporations, individuals, trusts, and certain partnerships[1], for any year in which the taxpayer has an interest in a controlled or non-controlled foreign affiliate, in the year. The form T1134 contains a summary form and a supplement form that is filed separately for each foreign affiliate.
A “foreign affiliate” is a non-resident corporation in which the taxpayer owns, directly or indirectly, at least 1% of any class of the outstanding shares of the foreign corporation, and the taxpayer, alone or together with related persons, owns, directly or indirectly, at least 10% of any class of the outstanding shares of that foreign corporation. The foreign affiliate will be a controlled foreign affiliate if certain conditions are met (e.g., more than 50% of the voting shares are owned, directly or indirectly, by a combination of the Canadian taxpayer, persons dealing at non-arm’s length with the Canadian taxpayer, a limited number of Canadian resident shareholders, and persons dealing at non-arm’s length with these Canadian resident shareholders).
New reporting requirements and questions in revised form T1134 for taxation years beginning after 2020
Changes in the new form T1134 | What are the additional reporting requirements? |
Summary |
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New questions pertaining to |
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New requirements for |
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Carry forward losses and FAPI |
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Questions on foreign affiliate reorganization(s) |
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Measures to ease the burden of compliance
The revised form T1134 includes several changes that have been welcomed as a means of reducing the compliance burden on taxpayers. These include:
This will allow reporting entities to jointly file one set of T1134 summary and supplements for all foreign affiliates.
What should taxpayers do to prepare?
The CRA’s introduction of revised form T1134 requiring comprehensive information on foreign affiliates is aligned with the global trend in tax authorities developing and implementing mechanisms to enable enhanced tax transparency. These initiatives follow the launch of the Base Erosion Profit Shifting (BEPS) project by the Organization for Economic Cooperation and Development (OECD). While it will be critical that taxpayers have systems and procedures to gather and furnish this information, this might be an appropriate opportunity to rely on the data-gathering exercise to rationalize corporate structures and identify any risks/gaps that might exist in the value-chain and develop strategies to mitigate them.
With the new form T1134 being introduced in January 2021, taxpayers should ensure the information on surplus calculations and adjusted cost base of foreign affiliate shares are up to date. Considering the new reporting requirements and a shorter deadline to file (10 months) the new form T1134, taxpayers should also consider how such additional information will be gathered specifically covering details in the context of upstream loans, foreign affiliate dumping, and elections made.
Furthermore, for Canadian headquartered multinational groups that meet the consolidated threshold of EUR 750 million requirement to file a Country-by-Country Report (CbC), it will be important that some of the information disclosed on related party foreign affiliates in the new form T1134, be consistent with the CbC Report, where appropriate. Furthermore, taxpayers implementing processes and procedures to gather information to include in the CbC Report should evaluate changes required to their systems to integrate the form T1134 reporting requirements and leverage efficiencies.
How Segal LLP can help?
Our multi-disciplinary tax and transfer pricing teams can assist taxpayers with complex reporting requirements and use such information to manage potential risks identified. This information can be used to determine completeness and accuracy by simulating it in advanced analytical tools and the outcomes can then be “risk classified” in the context of an ever-evolving international tax and transfer pricing environment.
For more details on how we can help, contact one of our Tax Partners Andrew Shalit, Howard Wasserman, Dora Mariani, or Principal & Transfer Pricing Leader Avinash S. Tukrel.
[1] If the share of the income or loss of the partnership for the year of non-resident members is less than 90% of the income or loss of the partnership, and a non-resident corporation or trust would be a foreign affiliate of the partnership if the partnership were a person resident in Canada
Dear Clients, Friends & Associates,
As we come to the end of 2020, our tax team has been busy compiling a list
of tax planning ideas that may potentially increase tax savings for you and your
family members. The topics included in this year’s tax planner include:
Segal’s 2020 Tax Planner is viewable here.
Should you have any questions or concerns, your Segal advisor can assist you
in determining which of these ideas is the best fit for you.
Please do not hesitate to call your Segal advisor or our tax team with any
questions about this year’s tax planner.
Thank you,
Segal LLP | Taxation Services
Segal LLP is pleased to announce that we served as advisors to the Aquilini/Enthusiast merger which has won the Excellence Award for the Capital Markets Deal of the Year by the Canadian Law Awards.
We also want to extend a congratulations and a job well done to our own team from Segal who provided audit and advisory services as part of this transaction. We pride ourselves on a diverse, experienced and hard-working team and we are thrilled to be recognized.
View the full list of 2020 Winners and Finalists here.
On October 9, 2020, the Department of Finance announced the introduction of the Canada Emergency Rent Subsidy (CERS). This new subsidy will provide direct relief to businesses, non-profits and charities that continue to be economically impacted by the COVID-19 pandemic.
The CERS is a replacement of the Canada Emergency Commercial Rent Assistance (CECRA) program, which ended in September 2020. The CECRA program was generally viewed as unsuccessful since the application process was complex and it required the landlord to apply for unsecured forgivable loans that were based on tenants meeting stringent criteria (i.e., 70% decline in pre-COVID-19 revenues).
The CERS will provide benefits directly to qualifying renters and property owners, without requiring the participation of landlords. The CERS is available retroactive to September 27, 2020 until June 2021. The Federal government has only provided details for the first 12 weeks of the program, until December 19, 2020.
Eligible Entities
Eligibility criteria for the CERS generally aligns with the Canada Emergency Wage Subsidy (CEWS) program. Eligible entities include individuals, taxable corporations and trusts, non-profit organizations and registered charities. Eligible entities also include the following groups:
In addition, an eligible entity must meet one of the following criteria:
Eligible Expenses
Eligible expenses for a location for a qualifying period will include the following:
Please note that subleasing revenues would reduce eligible expenses. As well, any sales tax (e.g., GST/HST) component of these costs would not be considered an eligible expense.
Eligible Expense Limitations:
Calculating Revenue
Reference Periods for the Drop-in Revenues Test
Rent Subsidy for Entities Impacted by the Crisis
Lockdown Support Subsidy
General Comments
Please contact Segal LLP for any assistance required.
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