Canada Tax changes affecting Start-Up visa applicants in 2025

Highlights: Canada’s Tax Changes to Affect Start-Up Visa Applicants

• Canada is set to introduce major changes to the country’s tax system in 2025.
• The new tax changes could affect the Start-up visa candidates.
• The Canada Revenue Agency (CRA) will make online mailing the default for most business agreements starting in spring 2025.
• The Year’s Maximum Pensionable Earnings (YMPE) will be raised to $71,300 in 2025, while the Year’s Additional Maximum Pensionable Earnings (YAMPE) to $81,200.

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Major Tax Changes in Canada set to be implemented in 2025

Given below are some of the major tax changes in Canada that are to be introduced this year, in 2025:

 

Transition to Online Mailing System

The CRA (Canada Revenue Agency) will make online mailing the default mode for business agreements and correspondence starting in spring 2025. Any business-related updates or information will now be released through the "My Business Portal." This new change will impact the following:

• New business numbers
• Registrations for the program account
• Current businesses that are already signed up with the My Business Portal
• Businesses via the “Represent a Client” service

Note: Candidates are advised to update their email addresses in the portal to receive notifications.

 

Tax Changes to the Capital Gains

The capital gains will now have a new inclusion rate that has yet to be approved and accepted by the Parliament. If implemented, the rule could bring in the following changes:

• The inclusion rate would be high for capital gains perceived on or after June 25, 2024, which could affect start-up founders who want to sell their shares.
• The new and revised forms will be available for corporations, individual founders, and trustees from January 31, 2025.
• For filings due on or before March 3, 2025, there would be relief for penalties or arrears.

Note: It is recommended that individuals looking to leave or reorganize their business consult a tax advisor to understand these changes.

 

Requirements for Trust Reporting

The CRA has announced an extension for the exemption for trusts from registering a T3 Income Tax and Information Return for the tax year 2024. However, the reporting requirements that are listed below will apply to other trusts:

• Filing or Registering a T3 return with Schedule 15 (If required)
• Making sure to meet any requests from the CRA regarding trusts  

 

Changes to Canada’s Pension Plans

This year, the pension plans in Canada are set to increase. The Year’s Maximum Pensionable Earnings (YMPE) will rise to $71,300 and the Year’s Additional Maximum Pensionable Earnings (YAMPE) to $81,200.

 

New Rules for Short-term Rentals

According to the updated rules, short-term rental owners or operators must adhere to the provincial and municipal guidelines to claim tax reductions. This change will apply to the following:

• Licensing and registrations
• Requirements for operating and other permits

Note: Operators must adhere to the local guidelines by December 31, 2024, to continue being eligible for tax deduction.

 

Upgrades to the Digital Service Platforms

The CRA has introduced new changes to businesses’ digital platforms. The changes include:

• Changes in the navigation and layouts in portals like the “My Business Account” * “Represent a Client.”
• Updated email notifications for any changes to be made in the account or payments
• New tools, such as the Scientific Research & Experimental Development (SR&ED) Self-Assessment Tool, are introduced for simplified tax claims.

 

Changes to filing Tax Returns

The online submissions of tax returns will now follow the below regulations from January 2025:

• The number of submissions will be restricted to a single return type.
• New authentications will alert businesses about any inconsistencies before filing.

Note: Using the updated T619 form is advised to prevent any refusals or delays.

 

Major Relief for T4/T4A Reporting

For the tax year 2024, employers not providing dental coverage under the CDCP (Canadian Dental Care Plan) will be allowed to leave the boxes empty of T4 and T4A forms.

Note: Those who do not adhere to these rules may have to face penalties.

 

 

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