Those of us who dabble from time to time in the conveying of real estate in BC are gnashing our teeth once again as the pointy headed bureaucrats in Victoria have just announced a wee amendment to the mandatory Property Transfer Tax Return, that might just send our clients to jail. Read More
When I found myself on the CRA firing line recently because I , like countless other professionals and small business owners have used a private corporation as a method of reducing taxes and splitting income, I was angry.
I pay a lot of taxes, dammit, and I don’t cheat. I do however believe that it is every citizens right, indeed duty, to organize their affairs so as to pay the least amount of tax, and when I do so using long established, mainstream tax minimization strategies such as incorporation, I don’t expect to have the rug pulled out from under me.
At the end of the day however, at least I’m a Big Boy- I’m a professional, and know how to navigate through the tax system, ( and the court system too, if it ever came to that) and I have access to professional tax and accounting advice. At the end of the day, I’ll be all right. What really makes my blood boil though is that CRA, has now shifted their attention away from the likes of me, who are barking back, to target the truly defenseless – the minimum wage earners at the bottom of the heap.
CRA has indicated this week that it now intends to extract tax on employee “perks’- the discounts that every private sector worker seems to receive as a result of their employment. So, the free, or discounted meal a waitress receives, or the employee discount offered to retail staff, the free lift tickets given to resort employees and so forth, will now all be taxed.
Trust CRA to pick on the little guy. Its pretty disgusting. Those perks are an important component of the overall compensation package for those who earn the least. Now, being a graduate of the Charles Dickens School of Business Management , employee perks were never a big deal in my firm (although we did offer free parking in the mall parking lot for those who could afford cars on their meagre wages) but perks are otherwise pervasive throughout private industry. Dental hygienists always have the whitest smiles, and hairdressers sport the latest hairdos, just as loggers never want for fire wood, and personal trainers work out for free.
How does CRA intend to handle the free coffee in the lunch room, or the beer fridge? Some employers offer on-site day care, or fitness facilities, so will those employees be taxed if they break a sweat?
Then too, what of those whose perks come not from their own employers, but from others? The concierge who gets a back-hander for referring hotel guests to a particular restaurant, or the ski instructor who gets to buy deeply discounted, top of the line gear, on the assumption that clients will then rush out to buy the gear they see their instructors using, or the realtor who gets a discount on their house deal from a lawyer they refer work too? How does CRA intend to track and tax all the myriad ways in which the wheels of commerce are greased? Do I now have to report that bottle of scotch from a grateful client, (and do those free Canucks tickets have any value – honestly ?)
The whole issue of the taxation of employee perks is a Pandora’s box that is best left firmly closed ( Unless , of course Mr Trudeau want’s the cost of his tropical vacation with the Aga Khan added to his T-4 slip as a tavable benefit )
Funnily enough, since it is the Liberal government which has unleashed this attack on the poor it was a Liberal Cabinet minister who has explained it best- remember David Dingwall’s famous quote
“I’m entitled to my entitlements ?”