![Canadian flag with gavel on top of book.](/-/media/cpa-digital-hub/featured-images/2024/08/hub-08-13-trust-reporting-1200x900.jpg?h=900&iar=0&w=1200&rev=d5316263c68d45da88a0c08efbcee592&hash=6E2BBA3F5F4B7616060A453D7E110CEA)
CPA Canada advises feds on trust reporting
CPA Canada is advocating directly with the Department of Finance to continue its work on simplifying trust reporting across Canada. In a letter co-authored with the Canadian Bar Association, CPA Canada has identified several potential improvements to the existing trust rules to help minimize the compliance burden on taxpayers and CPAs.
We have been advocating on its members’ behalf on this topic for quite some time, including earlier this year when it urged the CRA to exempt bare trusts from reporting requirements. When exempting bare trusts from the reporting requirements, the CRA acknowledged that the new reporting requirements had “an unintended impact on Canadians.” This most recent submission places CPA Canada in the centre of the discussion when it comes to legislative changes that are needed in trust reporting so as not to repeat past mistakes.
CPA Canada is asking the Department of Finance to adopt a risk-based approach to reporting to ensure that trust compliance and reporting filing and collection of information does not apply in situations where the risk is perceived as low. This submission provides the Department of Finance with suggestions to improve the de minimis test to “scope out” trusts that pose little risk such as trusts that own only personal-use property. CPA Canada is also asking for a simpler way to report beneficial ownership information for bare trusts than the filing of a trust income tax return.
CPAs have told us that the existing legislation places a significant burden on the profession. CPAs also understand the need to collect information about trusts to properly administer the tax system and to deter criminal activity. “We can both help Canada meet its domestic and international obligations under the Financial Action Task Force, while minimizing the administrative burden on our already complex — and sometimes onerous — tax system,” says CPA Canada’s Vice-President of Tax John Oakey.
You can read the full context and list of legislative changes CPA Canada is advocating for here, as well as our long history of tax advocacy.
“Our members are our priority,“ adds Oakey. “And we’ll continue to advocate for you at the highest level until we get results.”