Canada

Canada's individual tax summary reflects all 2022 federal, provincial, and territorial budgets. The summary is based on enacted and proposed legislation and assumes that the proposed legislation will become law. Generally, budget proposals and draft legislation are enacted into law, even with a minority federal government, which is currently the case. For more details of the proposed new individual tax measures noted in the summary, see our Tax Insights on the 2022 federal budget at www.pwc.com/ca/budget.

Mandatory disclosure rules

Draft legislative proposals enhance Canada’s mandatory reportable transaction disclosure rules, with various implementation dates. See Mandatory disclosure rules in the Tax administration section and our Tax Insights ‘Finance releases draft legislative proposals: Mandatory disclosure rules' at www.pwc.com/ca/taxinsights for more information.

Tax debt avoidance

Draft legislation introduces a new anti-avoidance rule that applies to transfers of property made after 18 April 2021 where, for the purposes of the existing rules dealing with tax debt avoidance, a tax debt will be deemed to have arisen before the end of the taxation year in which the transfer of property occurs if certain conditions are met. See Tax debt avoidance in the Tax administration section for more information.

Luxury tax

Recently enacted legislation implements a luxury tax on sales, for personal use, of luxury cars, boats, and aircraft over certain threshold sales prices, effective 1 September 2022. See Luxury tax in the Other taxes section and our Tax Insights ‘Finance releases draft legislative proposals to implement a luxury tax' at www.pwc.com/ca/taxinsights for more information.

Canadian housing owned by non-residents

Recently enacted legislation introduces an annual 1% tax, starting in 2022, on the value of non-Canadian-owned Canadian residential property considered to be vacant or underused. Certain residential property owners in Canada are required to file an annual declaration for each Canadian residential property they own, even if they can claim an exemption from the tax. See Property taxes in the Other taxes section for more information.

Tax-free First Home Savings Account

Draft legislation creates a new registered account, the Tax-Free First Home Savings Account (FHSA), in 2023 for certain Canadian residents aged 18 and over, which permits deductible contributions of up to CAD 8,000 annually (lifetime limit of CAD 40,000). See Registered plans in the Deductions section and our Tax Insights ‘2022 Federal budget: Encouraging affordable housing and sustainability’ at www.pwc.com/ca/budget for more information.

Immediate expensing of capital property

Recently enacted legislation allows unincorporated businesses carried on directly by certain individuals and partnerships to, in the year that the eligible property becomes available for use, immediately expense up to CAD 1.5 million per taxation year of eligible property acquired after 31 December 2021 that becomes available for use generally before 2025. See Business deductions in the Deductions section and our Tax Insights ‘Finance releases draft legislative proposals: Corporate income tax measures' at www.pwc.com/ca/taxinsights for more information.

Reporting requirements for trusts

Draft legislation implements new tax return filing and information reporting requirements for trusts that will come into effect for taxation years that end after 30 December 2023. The new rules require trustees to gather and report significantly more information; the filing deadline for a trust with a 31 December 2023 taxation year-end is 31 March 2024. See Reporting requirements for trusts in the Other issues section and our Tax Insights 'Navigating the proposed trust reporting rules: Trustees need to be prepared' at www.pwc.com/ca/taxinsights for more information.