By Clint Cameron, Director, Ontario Federation of Agriculture Tax season is coming up and while it’s always important to stay on top of deadlines and new rules, there are changes to three specific federal tax filing requirements that farmers should pay particular attention to for 2024. Underused Housing Tax In 2022, the federal Underused Housing Tax (UHT) Act became law, putting a tax on the value of vacant and underused housing owned either directly or indirectly by people who aren’t Canadian citizens or permanent residents. For the farming sector, the UHT’s onerous annual filing requirements and steep penalties for non-compliance, which ranged from $5,000-$10,000, were a major concern. Following advocacy from the Ontario Federation of Agriculture (OFA) and other organizations, the federal government announced the following proposed changes in its 2023 Fall Economic statement:
The proposed changes, which would apply for the 2023 tax year and beyond, still need to be introduced and passed through legislation in order to come into effect. Key takeaway for farmers: UHT still applies for the 2022 tax year, so any farmers who were required to file a UHT return for 2022 but have not yet done so, should file by April 30, 2024 to avoid penalties and interest. T3 reporting rules for federal trusts The federal government has introduced new reporting requirements for trusts, including those used in farm business and estate planning, that will take effect for taxation years ending after December 30, 2023.
Key takeaway for farmers: Farm businesses who use family trusts to hold private company shares, such as a farm corporation, as well as trusts used for estate planning or holding personal-use assets must now file an annual T3 return. Not sure if these rules apply to your farm? Consult a professional who is knowledgeable in farm trusts; filing unnecessarily can complicate estate planning and impose unintended legal and financial challenges. Electronic filing for HST returns becomes mandatory The Canada Revenue Agency (CRA) has implementing new electronic filing requirements for GST/HST returns starting in 2024 for anyone with a GST or HST number, with the exception of charities and a few listed financial institutions. For CRA purposes, electronic filing options include:
Key takeaway for farmers: for those without access to a computer or a reliable Internet connection, filing by phone using GST/HST TELEFILE is a valid electronic filing option. It can be a bit overwhelming to keep on top of the evolving tax landscape, so OFA has put together an easy-to-follow fact sheet that summarizes these key changes and where to go for more information. It’s downloadable on the OFA website. In addition to farming and running a business that offers services to farmers, I have also spent a large part of my career in the corporate world. So I’m no stranger to the paperwork that comes with being in business. Here are a few tips to make things easier at tax time:
For more information, contact: Tyler Brooks Director of Communications and Stakeholder Relations Ontario Federation of Agriculture 519-821-8883 ext. 218 [email protected]
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