Canada’s tax system is undergoing significant updates in 2025 that could impact start-up entrepreneurs immigrating through the Start-Up Visa (SUV) program. Whether you are planning to establish or grow a business in Canada, understanding these tax changes is critical for compliance and financial planning.
On This Page, You Will Find:
- Transition to Online Mail for Business Correspondence
- Updates to Capital Gains Tax Rates
- Trust Reporting Requirements for 2024
- Canada Pension Plan Enhancements
- Short-Term Rental Compliance Requirements
- Digital Service Enhancements
- Changes to Filing Information Returns
- Administrative Relief for T4/T4A Reporting
- Frequently Asked Questions (FAQ)
Transition to Online Mail for Business Correspondence
Starting in spring 2025, the Canada Revenue Agency (CRA) will make online mail the default for most business correspondence. Key updates and notices will be delivered through the My Business Account portal instead of paper mail. This change affects:
- New business number and program account registrations.
- Existing businesses already registered for My Business Account.
- Businesses represented through the “Represent a Client” service.
To prepare, ensure your email address is up to date in My Business Account to receive timely notifications about new mail and account updates.
For additional support, visit the CRA’s official page on online mail for businesses.
Capital Gains Tax Changes
As of June 25, 2024, the CRA is administering a new inclusion rate for capital gains, pending parliamentary approval. The changes include:
- A higher inclusion rate for capital gains realized on or after June 25, 2024, potentially impacting start-up founders selling shares.
- Updated forms for individuals, trusts, and corporations will be available by January 31, 2025.
- Relief for arrears interest and penalties applies to filings due on or before March 3, 2025.
If you’re planning a business exit or restructuring, consult a tax advisor to understand how these changes may affect you.
Trust Reporting Requirements
The CRA has extended the exemption for bare trusts from filing a T3 Income Tax and Information Return for the 2024 tax year. However, other trusts must comply with the updated reporting requirements. This includes:
- Filing the T3 return with Schedule 15 (Beneficial Ownership Information of a Trust) if applicable.
- Ensuring compliance with specific CRA requests for trust information.
Proper trust management and documentation are essential to meet these requirements and avoid penalties.
Canada Pension Plan Enhancements
In 2025, the Year’s Maximum Pensionable Earnings (YMPE) increases to $71,300, while the Year’s Additional Maximum Pensionable Earnings (YAMPE) rises to $81,200. These changes complete the legislative updates for the enhanced Canada Pension Plan (CPP). Key points:
- Contributions on earnings between $71,300 and $81,200 will be subject to CPP2.
- Employers and employees should update payroll systems to reflect these new thresholds.
- Entrepreneurs hiring staff must ensure compliance to avoid fines.
For further details, review the CRA’s CPP contribution guidelines for 2025.
Short-Term Rental Compliance
New rules require short-term rental operators to comply with municipal and provincial regulations to claim tax deductions. This applies to:
- Registration and licensing.
- Permits and operating requirements.
Operators must meet local compliance standards by December 31, 2024, to remain eligible for deductions. Visit the CRA’s sharing economy page for comprehensive guidelines.
Digital Service Enhancements
The CRA has upgraded its digital platforms to improve usability for businesses. Notable updates include:
- Enhanced navigation and layout in My Business Account and Represent a Client portals.
- New email notification options for tasks such as payments and account changes.
- Tools like the Scientific Research & Experimental Development (SR&ED) Self-Assessment Tool to simplify tax credit claims.
These improvements make tax management more efficient and accessible for entrepreneurs.
Changes to Filing Information Returns
From January 2025, electronic submissions of tax returns will follow updated guidelines:
- Submissions must be limited to a single return type.
- New validations will notify businesses of discrepancies before filing.
Use the latest version of the T619 form to avoid delays or rejections. For more details, consult the CRA’s updated filing guidelines.
Administrative Relief for T4/T4A Reporting
For the 2024 tax year, employers who do not offer dental coverage under the Canadian Dental Care Plan (CDCP) can leave the relevant box blank on T4 and T4A slips. However, non-compliance may result in penalties. Entrepreneurs employing staff should ensure their payroll systems are updated to meet these requirements.
Frequently Asked Questions (FAQ)
How will the new capital gains inclusion rate affect Start-Up Visa entrepreneurs?
The higher inclusion rate means entrepreneurs selling shares or assets may face higher tax liabilities. Early planning with a tax advisor can help mitigate this impact.
What steps should I take to transition to CRA’s online mail system?
Sign into My Business Account, update your email address, and enable notifications. This ensures you receive timely updates and correspondence from the CRA.
Do short-term rental operators need to comply with all local regulations to claim deductions?
Yes, compliance with municipal and provincial requirements, including registration and licensing, is mandatory to claim tax deductions for short-term rentals.
What is the impact of CPP enhancements on my payroll as an entrepreneur?
You must update your payroll systems to reflect the new YMPE and YAMPE thresholds. Failure to comply could result in fines and penalties.
Are there penalties for failing to meet trust reporting requirements?
Yes, non-compliance with trust reporting requirements can result in significant penalties. Ensure all required filings, including T3 returns, are submitted accurately and on time.
