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Weekly tax highlights, December 15, 2011

December 15, 2011

Changes in BC and Quebec — Canadian Indirect Tax News

On January 1, 2012, the Quebec sales tax rate will increase from 8.5% to 9.5%. If you have transactions straddling this date, whether you purchase or sell goods/services in Quebec, you may wish to speak with your advisor or refer to one of the Revenue Quebec publications to determine how any transitional rules apply.

In August 2011, British Columbians voted to extinguish the harmonized sales tax (HST) and return to the goods & services tax and provincial sales tax (PST) regime. The return to the PST is burdensome for most businesses that have already spent money and time implementing the HST and now must incur additional costs to re-implement the PST.

Read more in the latest edition of Canadian Indirect Tax News.

Changes to the CPP contribution rules for working seniors

The Canada Revenue Agency recently reminded employers, employees and self-employed workers of the changes to the Canada Pension Plan (CPP) rules that will come into effect for 2012. Starting January 1, 2012, CPP contributions will be levied in respect of employees and self-employed workers who are 60 to 70 years of age, even if they are receiving a CPP or Quebec Pension Plan retirement pension. For more information, please review our August 18, 2011 issue of Weekly Tax Highlights.

Pooled registered pension plans — draft tax legislation

On December 14, 2011, the Department of Finance released for consultation a package of draft tax legislation, together with explanatory notes and a backgrounder, to accommodate pooled registered pension plans (PRPPs). PRPPs will allow individuals who currently do not participate in a pension plan, such as the self-employed and employees of companies that do not offer a pension plan, to benefit from a large-scale, low-cost defined contribution pension plan. The proposed tax rules for PRPPs will apply to both federally and provincially regulated PRPPs, and will operate alongside the Pooled Registered Pension Plans Act. Interested parties are invited to offer comments on the package to the Department of Finance by February 14, 2012.

Prescribed interest rates for Ontario are unchanged 

The Ontario Ministry of Finance has published the interest rates that will apply on debts or overpayments for the January 1, 2012 to March 31, 2012 period. Rates are unchanged from the previous quarter. The rate on debts owing to the Ministry is 6% while the rate applicable on overpayments is 0%. For taxes or refunds resulting from a successful appeal or objection, the rate is 3%.

Tax treaty negotiations with Israel

The Department of Finance recently announced that negotiations to update the income tax treaty between Canada and Israel will commence on January 9, 2012. The existing tax treaty was signed on July 21, 1975. Persons wishing to offer comments concerning the negotiations are invited to send their views to the Department of Finance.

December 22 - the final edition of Weekly Tax Highlights

For more than a decade, Deloitte has delivered short tax updates to our clients, first as a daily newsletter and now as a weekly missive. However, the means by which our readers access information have changed, particularly due to emergent information technologies. Given the scope of this change, we have decided to cease publication of Weekly Tax Highlights. December 22, 2011 will be the final edition. In the coming months, we will explore new opportunities to discuss our bold positions on tax policy, and our reflections on tax issues. We welcome your feedback on this change; please write to us at Deloitte tax publications. We continue to publish our subscription-based publications, Canadian Indirect Tax News, and R&D Tax Update, which you may subscribe to on Deloitte.ca. We will also continue to publish Transfer Pricing Alerts, International Tax Alerts, and Canadian Tax Alerts, which you may read via our list of Deloitte tax publications.

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