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Did You Know
That CRA has a policy to allow two non-cash tax-free gifts or two non-cash tax-free awards to an employee each year where the total amount of the gifts or awards does not exceed $500 including taxes? The amount of the gift or award will qualify as a business deduction to the employer. The $500 applies to each of gifts and awards, so in one taxation year an employee could receive a $500 gift and a $500 award, both tax-free.
There are some guidelines CRA has set out HERE.
Note that gift certificates are considered taxable because CRA considers them to be near-cash. All near-cash gifts or awards will be taxable. Examples include gold, stocks, jewels, etc. As well, the policy may not apply to gifts or awards given to closely-held corporations to their shareholders or relatives. In these cases, CRA considers the gifts or awards to be received as shareholders not employees.
Careful planning with a Chartered Accountant is warranted. Contact Keith Anderson CA at (780) 447-5830 if you need advice.
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