Restaurants Canada is pleased to be a part of a successful effort asking the federal government to clarify changes to the Income Tax Act (ITA) scheduled to go in to effect on January 1, 2018. However, the short time between the announcement and effective date gives small businesses little time to prepare.
On December 13, the federal government released details addressing the public’s tax uncertainties, including updated rules to income sprinkling between family members. Some of the changes include exemptions to income sprinkling rejections, years and hours worked needed to qualify, as well as the ages of all parties involved.
A report released by the Senate finance committee the same day urged the government to delay the changes until January 1, 2019, so that families and businesses could have more time to make the necessary adjustments to ensure compliance. It also recommended that instead of simply adjusting the ITA, the government conduct a full review.
The federal government appears to be ignoring the Senate finance committee’s report and is forging ahead with their rules, stating that businesses have until December 31, 2018 to adjust to the changes.
The Coalition for Small Business Tax Fairness released a statement following Minister Morneau’s update and stated that the changes proposed remain an administrative and financial burden for small businesses and the families that own them.
Even with these new details, Restaurants Canada remains determined to furthering our inquest to the minister and finance department until all new ITA rules and regulations are completely transparent.