Pub Date : 2021-08-01DOI: 10.32721/ctj.2021.69.2.pf.purse
Graham Purse
In 2001, the Supreme Court of Canada decided Sagaz. That decision became an important part of the Canadian jurisprudence that resolves whether a worker is an employee or an independent contractor. In the subsequent 20 years, the work world has changed. Traditional tests of worker classification may not be appropriate in the new on-demand or gig economy. The multifactor tests that courts use to slot workers into two discrete categories, each with vastly different benefits and costs, are arguably no longer appropriate. Future approaches to this issue should consider either the use of legal tests that are more likely to produce a determination that workers are entitled to various social protections or, alternatively, rules that deem more workers to pay into, and be protected by, various social protections available to employees.
{"title":"Policy Forum: Sagaz at 20—Evaluating Employment and Independent Contractor Relationships in a Changing World","authors":"Graham Purse","doi":"10.32721/ctj.2021.69.2.pf.purse","DOIUrl":"https://doi.org/10.32721/ctj.2021.69.2.pf.purse","url":null,"abstract":"In 2001, the Supreme Court of Canada decided Sagaz. That decision became an important part of the Canadian jurisprudence that resolves whether a worker is an employee or an independent contractor. In the subsequent 20 years, the work world has changed. Traditional tests of worker classification may not be appropriate in the new on-demand or gig economy. The multifactor tests that courts use to slot workers into two discrete categories, each with vastly different benefits and costs, are arguably no longer appropriate. Future approaches to this issue should consider either the use of legal tests that are more likely to produce a determination that workers are entitled to various social protections or, alternatively, rules that deem more workers to pay into, and be protected by, various social protections available to employees.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123302249","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-01DOI: 10.32721/ctj.2021.69.2.fon
Tahsin Mehdi, Brian B. Murphy
In this article, using new data released in 2019, Tahsin Mehdi and Brian Murphy examine changes in the progressivity of the federal and provincial income tax system, in conjunction with changes in the progressivity of federal and provincial cash transfers since 1992, by examining effective tax rates. Many of the major components of the system of income taxes and cash transfers have become somewhat more progressive collectively over time. This has resulted in an improved net tax position for lower-income taxfilers as well as the top third of taxfilers. On the other hand, taxfilers in the middle quintile have experienced a drop in their net tax position since 1992.
{"title":"Finances of the Nation: Net Income Tax Rates and the Changing Progressivity of the Cash Tax/Transfer System","authors":"Tahsin Mehdi, Brian B. Murphy","doi":"10.32721/ctj.2021.69.2.fon","DOIUrl":"https://doi.org/10.32721/ctj.2021.69.2.fon","url":null,"abstract":"In this article, using new data released in 2019, Tahsin Mehdi and Brian Murphy examine changes in the progressivity of the federal and provincial income tax system, in conjunction with changes in the progressivity of federal and provincial cash transfers since 1992, by examining effective tax rates. Many of the major components of the system of income taxes and cash transfers have become somewhat more progressive collectively over time. This has resulted in an improved net tax position for lower-income taxfilers as well as the top third of taxfilers. On the other hand, taxfilers in the middle quintile have experienced a drop in their net tax position since 1992.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130942053","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-01DOI: 10.32721/ctj.2021.69.2.pf.rai
Bhuvana Rai
This article examines the current and historical legal schemes for deducting employment expenses—particularly those associated with a home office—under Canada's Income Tax Act, and concludes that the current legal test for such deductions is inequitable, ineffective, and imprecise. The author reviews the employment expense deductions available to taxpayers in other jurisdictions and proposes options for modifying Canada's employment expense deduction. The proposed changes would account for increasingly digital modes of working, advance equity, and add to taxpayer certainty.
{"title":"Policy Forum: Write It Off (and Start Again)—Adapting Home Office Deductions for the Digital Era","authors":"Bhuvana Rai","doi":"10.32721/ctj.2021.69.2.pf.rai","DOIUrl":"https://doi.org/10.32721/ctj.2021.69.2.pf.rai","url":null,"abstract":"This article examines the current and historical legal schemes for deducting employment expenses—particularly those associated with a home office—under Canada's Income Tax Act, and concludes that the current legal test for such deductions is inequitable, ineffective, and imprecise. The author reviews the employment expense deductions available to taxpayers in other jurisdictions and proposes options for modifying Canada's employment expense deduction. The proposed changes would account for increasingly digital modes of working, advance equity, and add to taxpayer certainty.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134406980","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-01DOI: 10.32721/ctj.2021.69.2.pf.robert-angers.f
Michaël Robert-Angers, Luc Godbout
La numérisation de l'économie change la façon dont les entreprises interagissent avec leurs clients et fournisseurs. Elle facilite les transactions entre particuliers et simplifie la conduite des affaires à l'étranger, sans nécessiter de présence physique. Cette tendance lourde entraîne aussi de nombreux défis pour les administrations fiscales qui se voient confrontées à de nouvelles pratiques d'affaires qui remettent en question les façons traditionnelles de prélever les recettes fiscales, les forçant à innover. Au Québec, le contexte entourant la légalisation des activités de la multinationale Uber a mené celle-ci à accomplir, pour le compte des chauffeurs utilisant sa plateforme, des activités de conformité fiscale échouant normalement aux employeurs. L'implication de la multinationale Uber qui verse directement à Revenu Québec la taxe de vente applicable sur les transactions des chauffeurs favorise la protection des recettes fiscales, notamment celles des taxes à la consommation dans un secteur économique à prévalence d'évasion fiscale.
{"title":"Policy Forum : Favoriser la conformité fiscale par l'encadrement de l'économie numérique — Initiative du Québec face à Uber","authors":"Michaël Robert-Angers, Luc Godbout","doi":"10.32721/ctj.2021.69.2.pf.robert-angers.f","DOIUrl":"https://doi.org/10.32721/ctj.2021.69.2.pf.robert-angers.f","url":null,"abstract":"La numérisation de l'économie change la façon dont les entreprises interagissent avec leurs clients et fournisseurs. Elle facilite les transactions entre particuliers et simplifie la conduite des affaires à l'étranger, sans nécessiter de présence physique. Cette tendance lourde entraîne aussi de nombreux défis pour les administrations fiscales qui se voient confrontées à de nouvelles pratiques d'affaires qui remettent en question les façons traditionnelles de prélever les recettes fiscales, les forçant à innover. Au Québec, le contexte entourant la légalisation des activités de la multinationale Uber a mené celle-ci à accomplir, pour le compte des chauffeurs utilisant sa plateforme, des activités de conformité fiscale échouant normalement aux employeurs. L'implication de la multinationale Uber qui verse directement à Revenu Québec la taxe de vente applicable sur les transactions des chauffeurs favorise la protection des recettes fiscales, notamment celles des taxes à la consommation dans un secteur économique à prévalence d'évasion fiscale.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134494266","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-01DOI: 10.32721/ctj.2021.69.2.kir
A. Kir
It has long been argued that federal countries, especially those with strong subnational taxing powers, might face difficulty in implementing a federal value-added tax (VAT) because of coordination issues involved, and therefore might be reluctant to adopt one. This article provides insights on how VAT structures are evolving in federal systems, where different tiers of government have separate (and sometimes overlapping) taxation powers. While the author focuses mainly on India's recently enacted goods and services tax (GST), he also offers a comparative perspective, with reference to the GST/VAT systems in Canada, Brazil, and the European Union, thus adding to the hitherto limited body of scholarly work on VAT coordination in federal jurisdictions. The GST is arguably India's biggest tax reform in several decades. Introduced primarily to create a unified national market and bring an end to tax wars and economic distortions, the tax reform's chief slogan was "GST—one-nation-one-tax-one-market." This article takes a closer look at a unique institutional design feature of the Indian GST—a centre-state body called the GST council. What makes this body unique is that it is envisaged as functioning on the principles of cooperative federalism. But can a concurrent tax system, whose very survival is based on cooperative federalism, guarantee a unified national market? If yes, for how long? The author highlights the role of the GST council in market integration and explains why the council has succeeded on several fronts while failing on others. He also addresses an unresolved constitutional issue that could affect the GST council's ability to function as the fulcrum for cooperative federalism—namely, the question of whether its decisions are binding. The uncertainty surrounding this issue could lead to a constitutional crisis if one or more states decide to opt out. The author discusses four possible ways to deal with this impending crisis.
{"title":"India's Goods and Services Tax: A Unique Experiment in Cooperative Federalism and a Constitutional Crisis in Waiting","authors":"A. Kir","doi":"10.32721/ctj.2021.69.2.kir","DOIUrl":"https://doi.org/10.32721/ctj.2021.69.2.kir","url":null,"abstract":"It has long been argued that federal countries, especially those with strong subnational taxing powers, might face difficulty in implementing a federal value-added tax (VAT) because of coordination issues involved, and therefore might be reluctant to adopt one. This article provides insights on how VAT structures are evolving in federal systems, where different tiers of government have separate (and sometimes overlapping) taxation powers. While the author focuses mainly on India's recently enacted goods and services tax (GST), he also offers a comparative perspective, with reference to the GST/VAT systems in Canada, Brazil, and the European Union, thus adding to the hitherto limited body of scholarly work on VAT coordination in federal jurisdictions.\u0000\u0000The GST is arguably India's biggest tax reform in several decades. Introduced primarily to create a unified national market and bring an end to tax wars and economic distortions, the tax reform's chief slogan was \"GST—one-nation-one-tax-one-market.\" This article takes a closer look at a unique institutional design feature of the Indian GST—a centre-state body called the GST council. What makes this body unique is that it is envisaged as functioning on the principles of cooperative federalism. But can a concurrent tax system, whose very survival is based on cooperative federalism, guarantee a unified national market? If yes, for how long? The author highlights the role of the GST council in market integration and explains why the council has succeeded on several fronts while failing on others. He also addresses an unresolved constitutional issue that could affect the GST council's ability to function as the fulcrum for cooperative federalism—namely, the question of whether its decisions are binding. The uncertainty surrounding this issue could lead to a constitutional crisis if one or more states decide to opt out. The author discusses four possible ways to deal with this impending crisis.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130250092","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-01DOI: 10.32721/ctj.2021.69.2.itp
Tim Fraser, Jim Samuel
Regulation 5901(2)(b) permits a corporation resident in Canada (CRIC) to make an election in respect of a dividend paid by a foreign affiliate of the CRIC such that the dividend will be treated as a reduction to the adjusted cost base of the foreign affiliate shares on which it is paid, rather than as a distribution from the foreign affiliate's surplus pools. Making this "preacquisition surplus election" is often perceived as a straightforward, and administratively simple, way for the CRIC to ensure that the dividend does not result in the unwanted, and potentially adverse, distribution of the foreign affiliate's surplus pools. However, as this article points out, it is important that a CRIC undertake a detailed analysis before deciding to make the election, in order to avoid potential exposure to unintended consequences. This article provides an overview of the legislative history of the election and its underlying policy rationale, and describes the limitations of and restrictions on its use. The authors present some conceptual guidelines (along with examples of their application) for identifying certain circumstances in which the making of the election may be particularly favourable or unfavourable. They also compare and contrast this election with the "qualifying return of capital" (QROC) election under subsection 90(3), which may be available in some circumstances as an alternative mechanism for achieving a similar result.
{"title":"International Tax Planning: The Preacquisition Surplus Election: More Than Meets the Eye?","authors":"Tim Fraser, Jim Samuel","doi":"10.32721/ctj.2021.69.2.itp","DOIUrl":"https://doi.org/10.32721/ctj.2021.69.2.itp","url":null,"abstract":"Regulation 5901(2)(b) permits a corporation resident in Canada (CRIC) to make an election in respect of a dividend paid by a foreign affiliate of the CRIC such that the dividend will be treated as a reduction to the adjusted cost base of the foreign affiliate shares on which it is paid, rather than as a distribution from the foreign affiliate's surplus pools. Making this \"preacquisition surplus election\" is often perceived as a straightforward, and administratively simple, way for the CRIC to ensure that the dividend does not result in the unwanted, and potentially adverse, distribution of the foreign affiliate's surplus pools. However, as this article points out, it is important that a CRIC undertake a detailed analysis before deciding to make the election, in order to avoid potential exposure to unintended consequences.\u0000\u0000This article provides an overview of the legislative history of the election and its underlying policy rationale, and describes the limitations of and restrictions on its use. The authors present some conceptual guidelines (along with examples of their application) for identifying certain circumstances in which the making of the election may be particularly favourable or unfavourable. They also compare and contrast this election with the \"qualifying return of capital\" (QROC) election under subsection 90(3), which may be available in some circumstances as an alternative mechanism for achieving a similar result.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130839705","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-01DOI: 10.32721/ctj.2021.69.2.ptp
Ana-Luiza Georgescu
This article discusses the main categories of compensation programs as distinguished for tax purposes and describes some of the potential tax implications that may be associated with certain changes made to these compensation programs, as well as some approaches to mitigate such tax impacts. It also reviews proposed legislative changes in the area of stock options and suggests what companies should be considering in preparation for these changes. Further, in the context of the COVID-19 pandemic, this article discusses key aspects of "working from anywhere" in relation to certain compensation programs, and the potential and expected impact of environmental, social, and governance corporate imperatives in designing and determining executive compensation.
{"title":"Personal Tax Planning: Current Issues in Compensation","authors":"Ana-Luiza Georgescu","doi":"10.32721/ctj.2021.69.2.ptp","DOIUrl":"https://doi.org/10.32721/ctj.2021.69.2.ptp","url":null,"abstract":"This article discusses the main categories of compensation programs as distinguished for tax purposes and describes some of the potential tax implications that may be associated with certain changes made to these compensation programs, as well as some approaches to mitigate such tax impacts. It also reviews proposed legislative changes in the area of stock options and suggests what companies should be considering in preparation for these changes. Further, in the context of the COVID-19 pandemic, this article discusses key aspects of \"working from anywhere\" in relation to certain compensation programs, and the potential and expected impact of environmental, social, and governance corporate imperatives in designing and determining executive compensation.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132534817","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-10-01DOI: 10.32721/ctj.2020.68.3.fon
Julie S. Gosselin, L. Godbout, Tommy Gagné-Dubé, Suzie St-Cerny
For almost 60 years, the Canadian Tax Foundation published an annual monograph, Finances of the Nation, and its predecessor, The National Finances. In a change of format, the 2014 Canadian Tax Journal introduced a new "Finances of the Nation" feature, which presents annual surveys of provincial and territorial budgets and topical articles on taxation and public expenditures in Canada. In this article, the authors recount how Canadian governments have responded to the COVID-19 crisis through the economic measures announced between March 11 and May 15, 2020. Their analysis shows that Canadian governments have acted quite rapidly and that, by expanding emergency measures, they have tried to help just about everyone. The authors set out the estimated costs of the various measures, followed by a brief comparison of Canada's response with the responses of other countries. The underlying data for the Finances of the Nation monographs and for the articles in this journal will be published online in the near future.
{"title":"Finances of the Nation: The Economic Response of Governments in Canada to COVID-19 in the First Three Months of the Crisis","authors":"Julie S. Gosselin, L. Godbout, Tommy Gagné-Dubé, Suzie St-Cerny","doi":"10.32721/ctj.2020.68.3.fon","DOIUrl":"https://doi.org/10.32721/ctj.2020.68.3.fon","url":null,"abstract":"For almost 60 years, the Canadian Tax Foundation published an annual monograph, Finances of the Nation, and its predecessor, The National Finances. In a change of format, the 2014 Canadian Tax Journal introduced a new \"Finances of the Nation\" feature, which presents annual surveys of provincial and territorial budgets and topical articles on taxation and public expenditures in Canada. In this article, the authors recount how Canadian governments have responded to the COVID-19 crisis through the economic measures announced between March 11 and May 15, 2020. Their analysis shows that Canadian governments have acted quite rapidly and that, by expanding emergency measures, they have tried to help just about everyone. The authors set out the estimated costs of the various measures, followed by a brief comparison of Canada's response with the responses of other countries.\u0000\u0000The underlying data for the Finances of the Nation monographs and for the articles in this journal will be published online in the near future.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126402503","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-04-01DOI: 10.32721/ctj.2020.68.1.cc
Brian Studniberg, Maressa Singh, Michael D. Templeton, Joel Nitikman
{"title":"Current Cases","authors":"Brian Studniberg, Maressa Singh, Michael D. Templeton, Joel Nitikman","doi":"10.32721/ctj.2020.68.1.cc","DOIUrl":"https://doi.org/10.32721/ctj.2020.68.1.cc","url":null,"abstract":"","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132687838","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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