Earlier this week, CPA Canada hosted a roundtable with CRA where some questions resulting from their October 26, 2020 session were addressed. CRA noted the following:
CEBA – Taxability of Loan Forgiveness
- CRA reaffirmed their comment that the forgivable portion of the CEBA loan is to be included in the year it was received.
- They noted that a loan is still considered a forgivable loan from the outset (and therefore subject to an income inclusion under Paragraph 12(1)(x)) even if there are conditions to be met.
CEWS – Elections and Choices
- CRA noted that there are some elections, and some choices (which don’t require elections), in respect of CEWS claims.
- A “choice” can be amended by filing an amended return but an election previously made currently cannot.
- However, if Bill C-9 passes as proposed, elections will be able to be revoked or amended.
CEWS – Normal Reassessment Period
- The normal reassessment period (three years for Canadian controlled private corporations, individuals and several others) would commence after the day that a CEWS Notice is issued.
- CRA did not specify what a CEWS Notice was.
- The period can be extended where a misrepresentation due to carelessness, neglect, or willful default or fraud has occurred.
CEWS – Work-in-Progress (WIP)
- CRA is still reviewing the appropriate treatment of WIP in respect of the revenue calculations.
Should you have any questions or feedback, please reach out to myself or the team. As always, we are here to help and support you.
Caveat: The information in this publication is current as of the time it was written. This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Deuzeman & Associates to discuss these matters in the context of your particular circumstances. Deuzeman & Associates does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.
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