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Need help from CRA? Here are the answers to some of your most common questions.

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  • Need help from CRA? Here are the answers to some of your most common questions.

At CFIB, we frequently receive complaints from business owners about Canada Revenue Agency's (CRA) customer service call centre. You’ve told us that CRA gives out incorrect or confusing information, complicating already frustrating situations. 

Since 2010, we have been investigating and evaluating the service. Posing as “secret shopper” callers, we anonymously asked CRA Business Enquiries Line four typical questions a business owner might ask. 

Too often, they gave us the wrong answers. To make your life easier, we've compiled the right ones here.

SCENARIO #1: How to pay sales taxes when providing a service in another province

Question #1: “For a consulting company that’s looking to provide services across the country, what are the rules around when they should be applying GST or HST?”

Correct response:

SCENARIO #2: Paying EI premiums for family members

Question #1: “My understanding is that if a business owner is hiring their child, they may not have to collect EI premiums.  Is that true?”

Question #2: “What process needs to be followed to get this done?”

Correct response:

SCENARIO #3: Investing in equipment for my business

Question #1: My client, a garden tool manufacturer, is buying used machinery to increase their manufacturing capacity. Are they eligible for the Capital Cost Allowance (CCA)? 

Background
The Capital Cost Allowance is the yearly amount a business owner can claim on their taxes for the cost of property that wears out over time, like buildings, furniture or equipment. The changes, which were introduced in fall 2018, apply to property and equipment acquired after November 20, 2018, and that becomes available for use before 2028. Applicants will base their CCA claim on the fiscal period ending in the current tax year, not the calendar year.

(More information at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance/calculate-deduction-capital-cost-allowance.html)

Correct response:

‘Above and beyond’ response:

SCENARIO #4: Car allowance

Question #1: Is the provision of a car allowance to sales people considered a taxable benefit?

Background
A car allowance is any payment (in addition to salary or wages) that employees receive from an employer for using their own vehicle in connection with their employment without having to track its use.

Correct response

  • If you pay your employee an allowance based on a flat rate that is not related to the number of kilometres driven, it is a taxable benefit and has to be included in the employee's income.
  • However, if the car allowance is based on a per-kilometre rate that is considered “reasonable” by CRA standards, the employer does not deduct CPP contributions, EI premiums or income tax.
  • Agent should direct the caller to: https://www.canada.ca/content/dam/cra-arc/formspubs/pub/t4130/t4130-18e.pdf

Above and beyond response