Vince Iannello Discusses 2022 Changes in Canadian Tax Laws

While the 2022 changes in the luxury tax affect all individuals, the Canadian Federal Government also passed tax legislation to help parents and teachers, says entrepreneur Vince Iannello, owner of Vince Iannello Professional Corporation (VIPC).

Luxury goods tax

Effective on January 1, 2022, the new luxury tax applies to purchases of luxury cars, boats, and aircraft. Specifically, purchasers of those items will pay the lesser of:

  • Either 10 percent of the full price for aircraft and luxury cars or 20 percent of the purchase greater than $100,000,
  • Either 10 percent of the full price of a boat or 20 percent of the purchase greater than $250.

The purchaser will still pay GST/HST at the final sale, inclusive of the luxury tax.

Property Vacancy Tax Changes

If you don’t hold Canadian citizenship but own property there, the Government will assess a one percent national annual tax on the assessed value. You can claim an exemption from the tax if one of the following three scenarios applies:

  • It’s the owner’s primary residence.
  • It’s the owner’s spouse or common-law partner’s primary residence.
  • It’s the primary residence of the child of the owner or of the owner’s spouse or common-law partner. You can only use this one if the child resides in Canada because they take part in an authorized study and their occupancy in the domicile relates to study participation.

The Government has other considerations for potential exemptions under consideration.

Teacher and Early Childhood Educators

Educators get a new school supply tax credit of 25 percent of $1,000 max. The tax credit legislation also broadens the supplies eligible for inclusion and removes the regulation that required the use of the materials in a regulated childcare facility or school. The items added to the durable goods list include:

  • Calculators of all types,
  • Digital timers,
  • Internet-capable technology devices, including laptops, desktops, tablets, external data storage devices,
  • Electronic educational toys,
  • Speakers,
  • Video streaming devices,
  • Multimedia projectors,
  • Peripherals including printers, webcams, microphones, and headphones,
  • Wireless pointer devices.

Claiming this credit requires a certificate from the educator’s employer attesting to the supplies purchased.

Tax Credit for Business Air Quality Improvement

Related to the COVID-19 protocols, the Government introduced a temporary tax credit of 25 percent with a maximum of $50,000. The Small Businesses Air Quality Improvement Tax Credit helps small businesses upgrade their air filtration and ventilation systems, thus improving indoor air quality. The company must upgrade the ventilation systems during the time period from September 1, 2021, to December 31, 2022. While trusts can’t take the credit, Vince Iannello explained individuals with a sole proprietorship and Canadian-controlled private corporations could take it.

Farmers’ Fuel Charge Tax Credit

Farmers with total farm expenses of at least $25,000 can get back their fuel charge proceeds. The tax credit goes to corporations, individuals, and trusts that manage or maintain an income-earning farm. The credit pays $1.73 per $1,000.

Contact Vince Iannello Professional Corporation for more information on tax changes or assistance in planning your accounting or tax processes and procedures.

Read Also: Cook CPA Group, Inc. is a leader in Business Accounting, Tax Preparation and More – Roseville

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Writing has always been a big part of who I am. I love expressing my opinions in the form of written words and even though I may not be an expert in certain topics, I believe that I can form my words in ways that make the topic understandable to others. Conatct: zeeshant371@gmail.com

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