Taxable Income : Tax tips

 

Amounts received on termination of employment

All amounts received as a consequence of termination of employment (job loss), even if received as damages, are fully taxable for Canadian income tax purposes in the year received. However, a portion of the payment may be eligible for transfer to an RRSP.

Offshore income

Offshore income earned by a Canadian resident is fully taxable in Canada and must be reported for Canadian income tax purposes. Failure to do so is tax evasion. A voluntary disclosure can avoid penalties and prosecution.

Reimbursement of legal fees

The reimbursement of legal fees incurred to establish a right to a retiring allowance or salary in lieu of notice is included in income but there is a corresponding deduction.

Income from a foreign pension plan is taxable in Canada

Income from a foreign pension plan received while a resident of Canada is taxable in Canada irrespective of where it was earned. If you have failed to report such income you can avoid penalties & prosecution by making a voluntary disclosure (tax amnesty application).