[MaxedOut]

At least some brokerages 'book' this line item as a 'negative' administrative charge allowing them to pay that bonus in a registered account without affecting contribution room.

These bonuses in themselves also are not 'investments' for which there is an intention of earning an income or a profit as one would when buying an asset such as an ISA, GIC, stock or bond.

Neither cash back from credit cards nor winnings from a raffle or a lottery are taxable nor are points from a credit card or airline/hotel/auto rental reward programs

Unless you argue hard, a reduction of expense is not the same as income and your comparison does not apply unless perhaps you are arguing somehow it's a rebate of expenses. My biggest expense with the brokerage is commissions. So a reduction of that expense would be a reduction of deductible expenses (commission) which is effectively making it taxable that way.

Give the bank some money for a fixed period of time to get a reward is taxable income.

Income earned in a TFSA or RRSP is not taxable. No need to consider how the bank is internally booking the expense.

 

[MaxedOut]

So I guess that people jumping yearly on these 1%-2% reward for transfers which can mean 5 figures in some case but not getting any T5 as I've never heard of an institution providing a T5 for these rewards are doing some tax fraud yet maybe the CRA as clear on that matter as in the US.

It's not the institution committing fraud. They have no requirement to issue tax slips for this case but an individual receiving income has to claim that income regardless of whether a slip was issued.

 

[MaxedOut]

I believe there's a confusion because for instance cashback rewards on credit cards aren't taxable. But that's because these are considered a discount as it's a reward on spending.

You found a legit tax loophole here. Getting a discount is not taxable in the same way as income is. Otherwise CRA would arguably be getting into territory of taxing you on the fair value of goods you purchase instead of the actual cash paid. So reducing your expenses will be great opportunity to effectively get tax free income.

But unless you can tie this specifically to a reduction in cost (that you are not already claiming i.e. trading commissions are already part of capital gain calculation) then this is not a reduction of expense. The banks leave this argument up to you to justify it but I haven't seen anything to convince me it is legitimately tax free.

Most of the arguments I have seen are regarding the lack of tax slip. CRA position on this is quite clear.

Line 12100 - Interest and other investment income - Canada.ca

This page explains how to report interest and other investment income that you may have received and that was reported on a T5, T3, or T5013 slip.

www.canada.ca

"You may not receive a T5 slip if the investment income is less than $50, but you must still report the income."

So most of the arguments I have seen are effectively advocating tax fraud arguing if there is no slip the CRA will never know or that the CRA has better things to do with their time than to chase these relatively small amounts. There may be some rational thought to this argument but legally, morally, ethically as far as I can tell it's taxable.

 

[MaxedOut]

I don't see how credit card bonuses are a discount on expenses. The expense was not incurred with the credit card company. The CC company is not discounting anything. Instead, it is inducing you to borrow from them. Which may cost you nothing. In which case there is nothing to discount. And, AFAIK, the CC bonus is not taxable. It's a marketing gambit, like handing out a toaster.

Or take time share pitches. You give the sales guy your time, and they give you and your partner a $100 steak dinner. They expense the dinner, but do you have to declare it as income?

The cc company collects a fee from the retailer for providing the payment service. Part of that fee gets passed on in points or promotions as a discount. Its directly related to expenses paid. It is not related to an investment of a specific amount for a specific period of time and is not the same thing.

The burden is on you to prove it's not taxable not the other way around as the general requirement to declare income without slips is clear.

 

[MaxedOut]

Sorry, I'm not following this.
The thread is about bonuses offered for moving investment assets. Expenses are not germane.

If you came to the conclusion that expenses are not relevant to the argument of whether these bank bonuses are taxable then you are following perfectly well and think we all agree.

 

[MaxedOut]

Getting a discount on shreddies at the grocery store does not imply you don't have to report income from a bank promotion.

I get how you can see it this way but in my opinion the logic is not related. The incentives you describe above are a discount on expenses.

The promotions from the bank are directly related to investing your money with them over a specific period of time (otherwise known as interest).

By the way I would very much welcome to be proven wrong on this point. If someone can provide CRA guidance that proves these promotions are not taxable I will be extremely grateful and apologize to all involved!

 

[MaxedOut]

I don't believe this is classified as 'income', it is more of a company specific sales reward. You don't get taxed on things like cash back on purchases from credit cards, Travel points , Shoppers Optimum or Diamond and other purchase rewards programs, fees waived for holding cash balances, no tax sales events , no interest for a year, BOGO free etc or other programs.

Getting a discount on shreddies at the grocery store does not imply you don't have to report income from a bank promotion.

I get how you can see it this way but in my opinion the logic is not related. The incentives you describe above are a discount on expenses.

The promotions from the bank are directly related to investing your money with them over a specific period of time (otherwise known as interest).

 

[MaxedOut]

Yes I meant the reward receiver who doesn't declare it, maybe I wasn't clear. My reference to them not receiving a T5 was to say that most likely they aren't aware that these rewards are taxable (as most people declare their income based on the tax slips they receive).

I understand and even sympathize with the burden required to track this. The banks are not being clear on this point either in their communication.

But as far as I know that does not technically give any exception to the taxable status.