Looking back to 2014 and FORWARD TO 2015

Transcription

1 YEAR-END TAX PLANNER 2014/2015 IN THIS ISSUE Federal Highlights 1 Provincial Highlights 1 International Highlights 1 Entrepreneurs 2 Personal Tax Matters 4 I am an employee so what do I need to know? 4 I have investments so what do I need to know? 5 What do families need to know? 6 The Golden Years 7 United States Matters 7 International Matters 8 Key Tax Dates 9 Appendix I : 2013 & 2014 TOP MARGINAL PERSONAL INCOME TAX RATES 10 Appendix II : 2013 & 2014 CORPORATE INCOME TAX RATES 11 December 2014 Looking back to 2014 and FORWARD TO 2015 Federal Highlights Income-splitting A new non-refundable tax credit of up to $2,000 was introduced to allow a higher income spouse to transfer up to $50,000 of earnings to the lower income spouse, effective for the 2014 tax year. Child care expenses Effective for the 2015 tax year, the maximum amounts that can be claimed for the Child Care Expense Deduction will increase as follows: For children under the age of 7: from $7,000 to $8,000; For children aged 7 through 16: from $4,000 to $5,000; and For children who are eligible for the Disability Tax Credit: from $10,000 to $11,000. Children s fitness tax credit Fees eligible for the children s fitness tax credit will increase to $1,000, starting with the 2014 tax year. Effective for the 2015 tax year, the tax credits will become refundable. Trusts and estates Starting in 2016, the graduated tax rate applicable to a testamentary trust created by an individual s death will be replaced with the highest personal income tax rate 29 per cent federal rate plus any provincial tax rates if the testamentary trust has been in existence for more than 36 months, subject to certain exceptions. The graduated tax rate will continue to apply for trusts having beneficiaries who qualify for the federal disability tax credit. Further, testamentary trusts and grandfathered inter vivos trusts will be required to have taxation years ending on December 31. Be aware of proposed changes which deem taxable capital gains that arise in spousal trusts, joint spousal trusts, alter ego trusts or self-benefit trusts to be payable to the deceased individual in the year of his or her death. Provincial Highlights Small business rate and thresholds The threshold in Manitoba will increase from $400,000 to $425,000 Mark Chan, CPA, CA, is a tax manager in the Toronto office of Collins Barrow on January 1, 2014, while the threshold in Nova Scotia will decrease from $400,000 to $350,000 on January 1, The federal small business deduction clawback is extended to Ontario for the taxation year ending after May 1, Quebec has introduced a new manufacturing and processing (M&P) rate of 6 per cent, effective June 5, The rate will be reduced to 4 per cent on April 1, Personal income tax Starting in 2014, the top Ontario personal tax rate before surtax of per cent is applicable to income over $220,000, down from $514,000, while the personal tax rate increases from per cent to per cent before surtax on income between $150,000 and $220,000. British Columbia personal tax rate increases from 14.7 per cent to 16.8 per cent for 2014 and 2015 on income over $150,000. International Highlights Back-to-back loan Where a taxpayer has a debt owing to a third-party intermediary and a non-resident person uses his or her property to secure the debt to circumvent the application of the thin capitalization rule and the Part XIII withholding tax the taxpayer will be deemed to owe an amount to the non-resident person. The new anti-avoidance rules will be effective for taxation years commencing after Immigration trusts The 60-month exemption period for an immigration trust is eliminated, effective February 10, A temporary relief is available for immigration trusts to continue to benefit from the 60-month exemption, if no contribution was made between February 10 and December 31, Effective January 1, 2015, an immigration trust will be subject to tax on its worldwide income. Foreign Income Verification Statement (Form 1135) The transitional reporting method adopted in 2013 has been extended into 2014, with some slight changes. In 2013, taxpayers were exempt from reporting any securities on the T1135, if income from such

2 2 securities was reported on T3/T5 slips. This exception is no longer available for 2014 and future taxation years. Entrepreneurs Dividends or salaries An owner-manager must determine the most tax effective salary-dividend mix that minimizes overall taxes for the corporation and the relevant individuals. The owner-manager must consider personal marginal tax rates, the impact of alternative minimum tax (AMT), the corporation s tax rate, RRSP contribution room ($138,500 of earned income in 2014 is required to maximize RRSP contribution in 2015), provincial health and/or payroll taxes, Canada Pension Plan (CPP) contributions and other personal deductions and credits available: If personal cash requirements are low, consider retaining income in the corporation to obtain the tax deferral as corporate rates are lower than personal rates; Be aware that distributing dividends that trigger a refund of refundable tax on hand does not necessarily provide tax benefit to the shareholder, if the shareholder lives in certain provinces where the dividend refund rate of 331/3 per cent is less than or equal to the top personal tax rate on the dividends; Ontario residents: For 2014, the top provincial personal tax rate of per cent will apply to taxable income exceeding $220,000 and per cent on income between $150,000 and $220,000. Tax savings can be achieved by deferring the receipt of bonus or dividend receipts until the high income tax is eliminated. It is estimated that the personal tax rate increase will be eliminated once the Ontario budget is balanced. Based on current estimates, the budget is expected to be balanced in 2017 or British Columbia residents: British Columbia's personal tax rate is 16.8 per cent on taxable incomes over $150,000 for 2014 and The tax rate is expected to decrease to 14.7 per cent after Qualified small business corporation share (QSBC share) status A sale of QSBC shares will be eligible for the lifetime capital gains exemption of up to $800,000 in Among other criteria, to maintain the QSBC share status, a corporation needs to have substantially all of the assets of the business used in an active business carried on primarily in Canada. Excess cash and passive investment assets may jeopardize the QSBC share status. A cumulative net investment loss (CNIL) balance may limit the individual taxpayer s ability to claim the capital gains exemption on a sale of QSBC shares. Receiving dividend and interest income instead of a salary will reduce CNIL balance, and in turn preserve the capital gains exemption claim. Scientific research and experimental development (SR&ED) Claims for SR&ED expenditures and relevant incentives (i.e., input tax credits) are due 18 months after the corporation s year-end. These claims cannot be late filed; and Where a Canadian controlled private corporations (CCPC s) taxable income, on an associated group basis, exceeds certain thresholds, the corporation may not be able to access the higher SR&ED investment tax credit (ITC) rate and the ITC will not be refundable. The ITC limitations will also be applicable in situations where a CCPC s taxable capital for federal purposes, on an associated group basis, exceeds certain limits. Consider paying a bonus in order to reduce the current year s taxable income to access the higher ITC rate. Remuneration accruals A bonus accrued at yearend needs to be paid within 179 days after the year-end and applicable source deductions are to be remitted on time. Tax liabilities Final corporate year-end tax liabilities need to be paid within two months after year end and within three months for certain eligible CCPCs. Shareholder loans Ensure that you repay shareholder loans from your corporation no later than one tax year after the end of the tax year in which the amount was borrowed. Subject to certain exceptions, unpaid amounts after such time will generally be treated as a dividend to the shareholder.

3 3 Income to family members Consider paying salaries to family members who work in the business. Keep in mind the salaries must be reasonable or the amounts may be challenged by the Canada Revenue Agency (CRA). Salary payments as opposed to dividends also allow the recipient to have earned income for child care expenses, CPP and RRSP purposes. Depreciable assets Consider purchasing equipment prior to the end of your fiscal year in order to accelerate access to capital cost allowance (CCA). Be aware of the available for use rules; and A special election can be used to treat leased fixed assets as purchases under a financing arrangement. Business income reserve When proceeds from the sale of goods or real property classified as inventory are not due until after the year-end, a reserve on sale profits may be claimed, over a maximum of three years. Capital gains reserve A capital gains reserve may be claimed on the sale of capital properties, over a maximum of five years, if the proceeds of disposition are not due until after the year-end. Taxable capital Monitor the corporation s taxable capital for federal tax purposes. If in excess of certain limits, the corporation will begin to lose access to the small business deduction and the 35 per cent refundable investment tax credit for SR&ED expenditures. Consider the following: Use excess cash to pay off some debts; Declare dividends; Defer planned dispositions that will result in income until after year-end; Maximize federal and provincial refundable and non-refundable tax credits; and Trigger capital losses to recover capital gains tax paid in previous years. Personal services business Applicable for taxation years ending on or after October 31, 2011, the tax rate applicable to income from personal services businesses increased to 28 per cent, due to the removal of the federal abatement. Decide if still beneficial to carry on business through this type of vehicle. Liaison Officer Initiative Earlier this year, the CRA announced that it will launch the Liaison Officer Initiative (LOI). This voluntary program was introduced as a way for CRA officers to meet with small and medium-sized businesses and proactively assess potential areas of tax risk up front, in order to minimize the cost to the CRA and taxpayer, and to resolve such errors discovered on audit/(re)assessment. If a selected business agrees to participate, we recommend you contact your tax advisor before responding to the CRA. Reporting of Internet Business Activities In December 2013, CRA introduced Schedule 88: Internet Business Activities. A corporation that earned income from a website or a web page was required to file this schedule as part of its T2 corporate tax return, applicable for 2013 and later tax years. Provincial or territorial tax incentives M&P investment tax credits are available in Manitoba, Nova Scotia, Prince Edward Island, Quebec and Saskatchewan SR&ED tax credits are available in all provinces, except Prince Edward Island, and the Yukon Media tax incentives: film incentives have been enhanced in British Columbia and Nunavut; film and digital media incentives have been extended in Nova Scotia; in Saskatchewan, a new grant program replaces the former tax credit program; and film, digital media and multi-media credit rates have been reduced by 20 per cent in Quebec. The Manitoba co-op education and apprenticeship tax credit has been extended indefinitely Quebec additional deduction for manufacturing small and medium-sized enterprises (SMEs) located in remote areas: this new deduction from income of up to 6 per cent of gross income has been added, depending on the location of the SME and the level of its manufacturing activities, among other things

4 4 Quebec health services fund (HSF) reductions: for SMEs with payrolls of $5 million or less that hire specialized employees from the natural and applied sciences sector, HSF contributions are reduced or eliminated after June 4, 2014 Quebec business tax credits: be aware that approximately 30 available business tax credit rates have been reduced by 20 per cent, generally effective on or after June 4, The following refundable tax credits are either eliminated or under review: A. Quebec tax credit for buildings used in M&P activities: this tax credit, which was available to manufacturing SMEs, is eliminated generally for expenses incurred after June 4, 2014; and B. Quebec tax credit for the integration of information technologies in M&P: as of June 4, 2014, this tax credit is under review and no certificates will be issued. GST/HST and QST Management/intercompany fees Ensure that GST/ HST or QST is charged on intercompany management fees within the corporate group. A corporation may be exempt from the said rule if a special election is made. Place of supply rules If sales of taxable supplies are made to different Canadian jurisdictions, be aware of the provincial place of supply rules and ensure the correct rate of tax has been applied to the transactions. Input tax credit documentation Ensure proper written documentation has been obtained to support the input tax credit (ITC) claims. Information about the GST/HST or QST registration number of the suppliers can be found on the CRA website or Revenue Quebec s website. Taxable benefits GST/HST or QST needs to be assessed on amounts reported as employees taxable benefits. Personal Tax Matters I am an employee so what do I need to know? Employment-related courses Consider having your employer pay directly for job-related educational courses. Gifts and awards Subject to certain exceptions, non-cash gifts and non-cash awards with a total value of $500 or less annually may not be taxable to you personally. Ask your employer to consider this option. Employee loans Pay 2014 interest on or before January 30, Home office - Ensure you claim your entitlement to home office expenses if your employer will complete form T2200. Public transit pass tax credit - Ensure you claim the cost of public transit, subject to certain criteria. Retain passes or receipts to support claims. Employee stock options Public companies It you dispose of stock options for cash, discuss with your employer as to whether they can elect to forgo the tax deduction so that you may claim it; The employee election to defer the payment of tax on stock option benefits until the shares are sold is no longer allowed; Employers are now required to withhold and remit income tax relating to the taxable benefit realized when public company options are exercised; and For employees who elected, prior to March 4, 2010, to defer stock option benefits and who subsequently experienced significant decrease in the value of their shareholding, a temporary relief is available. This allows the employees to elect to pay a special tax on the option benefits equal to the proceeds they received on the sale of the shares. Please note that for Quebec residents, the special tax equals 2/3 of the proceeds received on the disposition. To be qualified, the exercised shares need to be disposed of prior to December 31, 2014 and an election shall be made on Form RC310 (Form TP-1129 for Quebec residents) prior to the tax return filing deadline for the year in which shares were disposed. Overseas employment tax credit Please be aware that if you currently claim this credit it will be eliminated in stages by 2016.

5 5 Corporate vehicle Reduce your operating cost benefit and/or standby charge benefit if you have access to a company vehicle. To reduce the operating cost benefit: Consider reimbursing your employer for some or all of the personal use portion of the actual operating costs by February 14, 2015; and Reduce your personal driving to less than 50 per cent of the total driving, if possible. To reduce or eliminate your standby charge benefit: Limit your access to the vehicle (i.e., not every day); and Pooled registered pension plan (PRPP) Consider joining a PRPP if you do not have access to an employersponsored pension plan. PRPPs are a voluntary savings plan similar to a defined contribution RPP or RRSP. RRSPs, RPPs and DPSPs - If you contributed less than the maximum allowable amount to your RRSP in a previous year, use the unused contribution room for 2014 in addition to your normal contribution. If you decide not to contribute your entitlement for 2014, your ability to do so carries forward indefinitely. However, even if you do not need the deduction in 2014, you should still make the contribution if you have excess funds, so the funds can start to grow on a tax deferred basis. You can claim the deduction in any future year. Avoid personal driving. REGISTERED PLANS - CONTRIBUTION LIMITS Basis for deduction Registered retirement savings plan ( RRSP ) 18% of earned income for the previous year Defined contribution registered pension plan ( RPP ) Deferred profit sharing plan ( DPSP ) 18% of pensionable earnings for the year Dollar limits 2014 $24,270 $24,930 $12,465 Dollar limits 2015 $24,930 Indexed I have investments so what do I need to know? Tax-Free Savings Account (TFSA) Canadian residents age 18 or older may contribute to a TFSA. Contributions are not deductible but withdrawals and income earned are not taxed; Withdrawals should be done before year-end as amounts withdrawn are not added to your contribution room until the beginning of the following year after the withdrawal; and Consider holding eligible investments that are subject to higher tax rates (i.e., interest and foreign dividends). Investment holding company Ontario residents with incomes exceeding $220,000 in 2014 who earn investment income from portfolio investments will be subject to Ontario s high-earner income tax. Consider holding these investments in a corporation to benefit from the lower corporate tax rate on investment income. Interest deductibility If you are incurring nondeductible interest and have cash or investments on hand, consider paying down non-deductible debt and then borrowing to replace those investments. However, be mindful of triggering gains if you liquidate investments. Capital gains and losses If you have capital gains this year or in 2013, 2012 or 2011, consider selling an asset with an accrued loss, which can then be offset against those capital gains from this year and then from prior years to recover tax. Before triggering losses, consider the superficial loss rules. If you have little or no other income, or have capital losses to use up, consider triggering capital gains before year-end by selling an investment that has appreciated in value, then reinvesting the proceeds, even in the same investment.

6 6 If certain conditions are met, you can dispose shares of an eligible small business corporation and defer the recognition of capital gains by reinvesting the proceeds from the sale of those shares in another eligible small business corporation by April 30th, Superficial loss rules The superficial loss rules prevent a taxpayer from claiming a capital loss on an asset that the taxpayer clearly intended to continue to hold. If you are holding an asset with an accrued loss and wish to sell the asset to offset against any capital gains realized and you purchase the identical asset within 30 days either before or after selling the original asset the superficial loss rules will apply to deny the capital loss, provided that the asset is held at the end of 30 days after the sale. The superficial loss would also apply if your spouse or a company controlled by you or your spouse buys the asset within the same timeframe. Eligible dividends Eligible dividends may trigger AMT; and Eligible dividends could be tax-free if paid to individuals in lower tax brackets or who have significant non-utilized tax credits, such as tuition and education amounts. First-time donor s super credit A first-time donor is entitled to claim an additional 25 per cent credit on up to $1,000 of donations made after March 20, The credit can be claimed only once, after 2012 and before Safety deposit boxes The costs of renting safety deposit boxes are no longer deductible for taxation years beginning after March 20, What do families need to know? Estate planning Ensure your estate plan is meeting your current and future objectives. Also ensure that your will is up to date. Income-splitting Consider an income-splitting plan to lend funds to family members in lower tax brackets. The current prescribed rate is 1 per cent. Interest on intra-family loans must be paid on or before January 30, 2015, to avoid attribution of income. Split income with minor Commencing for 2014 taxation years, the income attribution rules apply to split income that is paid or allocated to a minor from a trust or partnership, if: 1. The income is derived from a business or a rental property; and 2. A person related to the minor is actively engaged on a regular basis in the activities of the trust or partnership to earn income from any business or rental property, or has a direct or indirect interest in the partnership. Registered Education Savings Plan (RESP) Plan your contributions to ensure the RESP will receive the maximum lifetime Canada Education Savings Grant (CESG) of $7,200; and Asset transfers between RESPs for siblings are now allowed, subject to certain criteria. Registered Disability Savings Plan (RDSP) If you have a child who qualifies for the disability tax credit and RDSP, you should: Set up an RDSP to qualify for the Canada disability savings bond (maximum of $20,000 per child); and Contribute to an RDSP to qualify for the Canada disability savings grant (maximum of $70,000 per child). Child care expenses Available deductions for child care expenses will increase by $1,000 for children under 17 or children eligible for the disability tax credit. Boarding school and camp fees qualify for the child care deduction, though limits may apply. Ensure that child care expenses for 2014 are paid by December 31, 2014 and a receipt is obtained. Children s fitness tax credit Fees eligible for the children s fitness tax credit increase to $1,000, starting Effective for the 2015 tax year, the tax credits will become refundable to the taxpayer. Education and textbook tax credits Claim these credits if you attend post-secondary school either fulltime or part-time. Eligible fees for exams taken after 2010 may qualify for the tuition tax credit. Unused and unclaimed tax credits Consider transferring your education, tuition or textbook tax credits to your spouse, parent or grandparent, subject to limitations, if you are unable to utilize them. The carryforward period is generally indefinite for unclaimed

7 7 education, tuition and textbook credits and five years for unclaimed student loan interest. Moving expenses Your moving expenses may be deductible if you moved to attend school or moved from school to work or back home. Lifetime Learning Plan (LLP) You are allowed to make a tax-free withdrawal from your RRSP to finance full-time education or part-time for students who meet one of the disability conditions for yourself, your spouse or your common-law partner. You may withdraw up to $10,000 in a calendar year and up to $20,000 in total. Adoption tax credit Beginning with the 2014 taxation year, the 2014 Federal Budget proposed to increase the maximum amount of the adoption tax credit to $15,000 from the previous maximum amount of $11,774. This maximum amount will be indexed annually for inflation. Search and rescue volunteer tax credit Commencing in the 2014 taxation year, the 2014 Federal Budget provides a new federal tax credit of $450 for search and rescue volunteers who perform at least 200 hours of search and rescue services on an annual basis for eligible search and rescue organizations. The Golden Years Inter vivos trust If you are 64 or older and live in a province with a high probate fee, consider establishing an inter vivos trust as part of your estate plan. Testamentary trust Starting in 2016, the graduated tax rate applicable to a testamentary trust created by an individual s death will be replaced with a flat top marginal rate, if the testamentary trust has been in existence for more than 36 months. The graduated tax rate will continue to apply for testamentary trusts created less than 36 month ago and trusts with beneficiaries who qualify for the disability tax credit. RRSP If you turned 71 in 2014, you must collapse your RRSP. You may: Defer taxes on all or a portion of the amount in your RRSP by transferring the funds to a registered retirement income fund (RRIF); Contribute to your RRSP only until December 31, 2014, if you have unused RRSP contribution room or earned income in the previous year; Contribute to your spouse s RRSP until the end of the year that your spouse reaches age 71, if you have unused RRSP contribution room or earned income in the previous year; and Make a 2015 contribution by the end of December 31, 2014, subject to a small penalty. Pension income If you receive pension income, consider splitting it with your spouse or common-law partner, to a maximum of 50 per cent. To maximize your pension credit, you will require at least $2,000 of pension income if you are age 65 or older. Old Age Security (OAS) Allocation of pension income from a spouse or receipt of dividends may trigger OAS clawback. Consider measures to invest so as to earn capital gains as only 50 per cent of the gain is included in income for the purposes of calculating the OAS amount. Alternatively, explore additional options to manage your income (e.g., through a corporation) in order to avoid the OAS clawback. Canada Pension Plan (CPP) If you are 60 to 70 years of age and employed or self-employed, you must contribute to the CPP. However, if you are between the ages of 65 to 70, you can elect to stop these contributions. This election can be revoked the following year. Be aware that CPP benefits are reduced if you begin collecting prior to turning 65. Individual pension plans If you are over 71, you must make minimum withdrawals if you have a defined benefit RPP that was created primarily for you. United States Matters U.S. estate tax Canadians may be exposed to U.S. estate tax if they hold U.S. property (e.g., shares in U.S. corporations, even if held in a Canadian brokerage account; U.S. real estate, including vacation homes; interests in U.S. partnerships, etc.). U.S. federal income tax return/treaty based tax return Determine whether you are conducting activities in the United States that require you to file U.S. federal income tax returns, or U.S. treaty based tax information disclosure returns. State and municipal taxes The rules here differ in many cases from the U.S. federal level. If you are carrying on business in the U.S., please consult your tax

8 8 advisor to ensure that you are onside as each jurisdiction has its own set of rules. U.S. retirement plans If you are a Canadian resident, consider transferring your U.S. 401(k) or IRA plans on a tax-deferred basis to an RRSP. U.S. tax reforms Limit the ability of a U.S taxpayer to claim foreign tax credits in certain situations; Impose penalties on U.S investors that fail to report their investments in foreign financial assets, PFICs and other foreign entities; and The Foreign Account Tax Compliance Act (FATCA) initiative embarked upon in mid essentially forces Canadian financial institutions to provide information on U.S. account holders to the IRS. Canadian RRSPs, RRIFs, RPP and DPSPs A recent U.S. IRS announcement allows U.S. citizens and resident aliens who hold interest in Canadian RRSPs or RRIFs and meet certain conditions, to automatically qualify for a tax deferral. However, certain U.S. tax return forms may still be required. Canadian TFSAs Investment income earned in a TFSA may be taxable for U.S. tax purposes in the year it is earned. Additional reporting information may have to be remitted to the IRS annually. Canadian mutual funds An annual information return needs to be filed with the IRS in respect of a U.S. citizen, green card holder or U.S. resident alien who owns Canadian mutual funds in International Matters Loans from foreign subsidiaries Be aware that the 2013 legislation has introduced additional tax complexities associated with loans from foreign affiliates to Canadian corporate shareholders and to certain nonarm s length persons. Transfer pricing If your corporation has transactions with a related non-resident corporation or partnership, ensure that the transfer pricing documentation meets the requirements imposed by the Canadian transfer pricing rules and those of the foreign jurisdiction. Noncompliance can result in significant penalties. Thin capitalization For corporate taxation years beginning after 2012, thin capitalization rules limit the deduction of any interest on debt where the debt to equity ratio is greater than 1.5:1 and the creditor is a nonresident with significant ties to the debtor. For taxation years ending after March 28, 2012, any disallowed interest expense is considered to have been paid as dividend and is subject to withholding tax. For taxation years beginning after 2013, these new measures will further apply to Canadian-resident trusts and to nonresident corporations (i.e., Canadian branches) and trusts that carry on business in Canada, including members of partnerships. Loan receivable due from non-resident corporation Where a non-resident controlled Canadian corporation makes loans to its foreign parent or related non-resident companies, the Canadian corporation could be subject to shareholder benefits and deemed dividend withholding tax in certain circumstances. The newly enacted legislation permits the Canadian corporation to elect out of the deemed dividend withholding tax rules, if the Canadian corporation includes interest on the loan at a prescribed rate in income. The legislation applies to loans received or indebtedness incurred after March 28, Loans made by, or to, certain partnerships may also be eligible for the election. Payments to non-residents You may be required to withhold and remit 15 per cent of certain payments made to nonresidents in respect of fees, commissions or other services rendered in Canada; Be aware of the NR301, NR302 and NR303 forms released by the CRA that non-residents should file in support of reducing withholding tax rates on payments under a tax treaty; and Be aware of Form R102-R, released by the CRA, that requests reduced withholdings on payments made to non-resident employees.

9 9 KEY TAX DATES December 15, 2014 Final quarterly instalment of 2014 tax due for individuals December 24, 2014 This is likely the final trading day for Canadian exchanges for those wishing to have trades settled for 2014 December 31, Last opportunity to make a payment for the following items in order to utilize any applicable credit or deduction on your 2014 return Charitable donations Payment of Union dues and professional fees Investment counsel fees, interest and other investment expenses Alimony and maintenance payments Child care and child fitness expenses Interest Medical expenses Moving expenses of individuals Political contributions Deductible employee legal fees Tuition fees and interest on student loans Payments to employer to reduce standby charge RRSP contributions if you turn 71 by December 31, 2014 January 15, 2015 U.S. taxes : estimated tax payments due for individuals January 30, 2015 Interest due on intra-family loans Non-deductible interest due on loans from your employer, to reduce your taxable benefit February 14, 2015 Payment to your employer to reduce your taxable operating benefit from an employer provided automobile February 28, 2015 Last day to file T4, T4A and T5 Summary and Supplementary forms March 2, 2015 Deductible contributions to your own RRSP or spousal RRSP (for 2014 deduction) RRSP Home Buyer s Plan repayment due (to avoid 2014 inclusion) March 16, 2015 First quarter (2014) personal tax instalment due March 31, 2015 Last day to file income tax returns for inter vivos trusts without penalty Last day to file NR4 Summary and Supplementary forms regarding amounts paid or credited to non-residents of Canada April 15, 2015 U.S. individual tax return due if you have not obtained an extension April 30, 2015 Last day to file personal tax returns, except for self-employed individuals or spouses of self-employed individuals, in which case the deadline is June 15, No matter your deadline, interest will be charged on any balance due after April 30 Filing deadline for personal return may be later if individual or spouse died during the year; however, a terminal return is required

10 10 Appendix I 2014 & 2015 TOP MARGINAL PERSONAL INCOME TAX RATES Ordinary income and interest Capital gains Canadian dividends Eligible Non-eligible Federal 29.00% 14.50% 19.29% 21.22% Alberta 39.00% 19.50% 19.29% 29.36% British Columbia 45.80% 22.90% 28.68% 37.99% Manitoba 46.40% 23.20% 32.26% 40.77% New Brunswick 46.84% 23.42% 27.35% 36.02% Newfoundland and Labrador 42.30% 21.15% %/ 30.19% % %/ 32.08% Northwest Territories 43.05% 21.53% 22.81% 30.72% Nova Scotia 50.00% 25.00% 36.06% 39.07% Nunavut 40.50% 20.25% 27.56% 31.19% Ontario 49.53% 24.76% 33.82% 40.13% % Prince Edward Island 47.37% 23.69% 28.70% 38.74% Quebec 49.97% 24.98% 35.22% 39.78% Saskatchewan 44.00% 22.00% 24.81% 34.91% Yukon 42.40% 21.20% Non-Resident (in certain circumstances) 15.93% % for 2014 and % 42.92% 21.46% 28.55% 31.41%

11 11 Appendix II 2014 & 2015 CORPORATE INCOME TAX RATES Canadian-Controlled Private Corporations (CCPCs) General M&P Active business income earned in Canada up to Small Business Limit Investment income Federal 15.00% 11.00% 34.67% Alberta 25.00% 14.00% 44.67% British Columbia 26.00% 13.50% 45.67% Manitoba 27.00% 11.00% 23.00% 46.67% New Brunswick Newfoundland and Labrador Northwest Territories % % 15.00% 46.67% % 29.00% 20.00% 48.67% % 26.50% 15.00% 46.17% Nova Scotia 31.00% 14.00% or 27.00% 50.67% Nunavut 27.00% 15.00% 46.67% Ontario 26.50% 25.00% 15.50% 46.17% Prince Edward Island Quebec % 15.50% 50.67% 26.90% 19.00% (non - M&P) / 17.85% (M&P) /15.49% (M&P) % Saskatchewan 27.00% 25.00% 13.00% 46.67% Yukon % (non- M&P)/13.00%(M&P) 30.00% 17.50% % (M&P)/12.50%(M&P) 49.67%