Finance is extending its consultation on cash purchase tickets to July 24, 2017.
This consultation was announced in Budget 2017. It will consider whether the cash purchase ticket system for grain deliveries should be changed or eliminated. Under a cash purchase system, farmers can receive cash purchase tickets as a form of deferred compensation for their deliveries of listed grains; they are allowed to use these cash purchase tickets to defer their income tax on the grain sale. Stakeholders have a chance to give Finance their feedback on this income tax deferral, including any appropriate transitional period or new rules, up until the new cut-off date.
The consultation period was originally scheduled to end May 24, 2017.
Cash purchase tickets are often issued to farmers who sell listed grain (i.e., wheat, oats, barley, rye, flaxseed, rapeseed or canola) to licensed grain elevator operators. If a grain operator pays a farmer with a cash ticket that the farmer can only redeem after the end of the taxation year that the grain was delivered in, it is called a deferred cash purchase ticket. Farmers who are paid with a deferred cash purchase ticket can wait and include the amount of the ticket in their income in the year they redeem the ticket for cash, resulting in an income tax deferral.
The 2017 federal budget stated that, because the grain marketing regime has been deregulated and the Canadian Wheat Board has been commercialized, there might not be a clear policy rationale for keeping the current tax-deferral policy.
For more information, contact your KPMG adviser.
Information is current to May 30, 2017. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500