01/10/2025
Uncertainty looms for tax filers ahead of April 30 deadline.
The recent prorogation of Parliament has thrown a wrench into the implementation of key tax changes, including controversial capital gains tax proposals introduced in the 2024 federal budget. With Parliament suspended until March 24, and a potential election on the horizon, it’s increasingly unlikely that these measures will be enacted before the filing deadline.
This delay has left many tax filers in limbo as they prepare their returns. As CPA Canada’s Tax VP, John Oakey, puts it: "This is not the first time Parliament has been prorogued with unresolved tax measures, but it's the first time in my career that I have seen this volume."
While the CRA is updating its forms and systems for the proposed capital gains changes, taxpayers are ultimately responsible for deciding whether to file based on current or proposed law. The CRA cannot enforce filing under proposed legislation. However, if the changes, effective June 25, 2024, are later passed, taxpayers who file based on current law may face arrears interest.
While much attention has focused on capital gains uncertainty, other proposed tax measures are also in limbo. The Sept. 23 notice of ways and means motion proposed increasing the lifetime capital gains exemption to $1.25 million, effective for dispositions on or after June 25, 2024. Additionally, more proposed tax measures were announced by the Department of Finance on Aug. 12, 2024, and in the Fall Economic Statement on Dec. 16, 2024.
The CRA faces a significant challenge, especially with retroactive effective dates affecting 2024 tax returns. Other than the Sept. 23 notice of ways and means motion, all other tax measures don’t fall under the non-statutory common practice of provisional implementation of taxation. Without guidance from prorogued Parliament, the CRA must determine how to administer them.
Source CPA Canada. For the full article and to learn more about what to expect ahead of the April 30th deadline:
https://www.cpacanada.ca/news/analysis/prorogation?utm_campaign=20974804-Updates%20Q1%202025&utm_medium=email&_hsenc=p2ANqtz-_Ep9A4tNUXzmbZnanfdJ3H2gfD7sFUVoD-fEfw7NI4jo0pU1q8dDt8Wx_qkXCzqZWxG36FHtsFMHWjbRbtKvqgCL83BHG1XZEEJ9blJBdxvvE-A1U&_hsmi=102316578&utm_content=102316578&utm_source=hs_email
