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July 28, 2015
2:05 pm
AltaRed
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james1900 said

I suddenly realized that I received $50 cash back from MBNA last year. The cashback is a discount to what I have paid with the credit card, so it is not taxable, right?

Correct.

July 28, 2015
5:55 pm
Norman1
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Loonie said

Even gifts can be taxable, but I am not familiar with the details on that.
...

There's currently no gift taxes in Canada. They were abolished around 1971.

At worst, there are some tax consequences for the giver. The recent article Tax planning: the high cost of being generous from The TaxLetter details some of those situations.

Loonie said
...
I don't see how anyone could legitimately call it interest, as it simply is not. However, it IS income.

The bonuses could be considered gifts. Sort of like those toasters that some banks used to give, in the distant past, for opening an account.

July 28, 2015
7:33 pm
Loonie
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Yes, I remember the toasters! I remember getting free camping chairs for doing something-or-other at the bank, and some other kitchen gadget for something else, and an ipod for test-driving a GM car. It is akin to winning a contest, I suppose.

On the other hand, I also recall the kerfuffle about CRA taxing people who used their frequent flyer points to buy personal travel when the points had been accumulated through work. They probably still try to do that.

So I would be reluctant to make a call on this one. In a way, it's a gift, but in another way it's just cold hard cash being doled out by a bank in exchange for making a certain kind of deposit.
I'll be happy to do that with a larger amount, forego the "interest" with the written understanding that I will get a bonus equal to 3% apr in X number of days.sf-smile Seems to me, that's what this is - more like a bond in some ways but without the concept of "interest".

I am neither lawyer nor accountant, and have never worked for CRA or taken economics courses.

July 29, 2015
12:20 pm
james1900
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As of July 29 at 12:15pm Pacific Time, Zag's online banking is happening some problems again:

The system is unavailable or returned an unrecognized response. Please try again later or Contact us at 1-844-ZAG-bank

I really have concern that their weak system will give us headaches.

July 29, 2015
5:30 pm
Norman1
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Loonie said
...
On the other hand, I also recall the kerfuffle about CRA taxing people who used their frequent flyer points to buy personal travel when the points had been accumulated through work. They probably still try to do that.
...

I remember that. However, according to July 2010 article CRA and the Air Miles Double-Standard in The Tax Issue, CRA relaxed their position in 2009.

CRA's current position is described in CRA: Loyalty and other points programs for employers:

Your employees may collect loyalty points, such as frequent flyer points or air miles, on their personal credit cards when travelling on business trips, even though you reimburse them for the amounts they spend. Usually, these points can be exchanged or cashed in for rewards (goods or services, including gift cards and certificates).

Your employees do not have to include in their income the value of the rewards they received or enjoyed from the points they collect on these business trips, unless any of the following applies:

• The points are converted to cash.
• The plan or arrangement between you and the employee seems to be a form of additional remuneration.
• The plan or arrangement is a form of tax avoidance.

If any of the conditions above are met, the employee has to declare the fair market value of any personal rewards he or she received on an income tax and benefit return.

November 29, 2015
4:05 pm
Doug
British Columbia, Canada
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Norman1 said

Loonie said
...
On the other hand, I also recall the kerfuffle about CRA taxing people who used their frequent flyer points to buy personal travel when the points had been accumulated through work. They probably still try to do that.
...

I remember that. However, according to July 2010 article CRA and the Air Miles Double-Standard in The Tax Issue, CRA relaxed their position in 2009.

CRA's current position is described in CRA: Loyalty and other points programs for employers:

Your employees may collect loyalty points, such as frequent flyer points or air miles, on their personal credit cards when travelling on business trips, even though you reimburse them for the amounts they spend. Usually, these points can be exchanged or cashed in for rewards (goods or services, including gift cards and certificates).

Your employees do not have to include in their income the value of the rewards they received or enjoyed from the points they collect on these business trips, unless any of the following applies:

• The points are converted to cash.
• The plan or arrangement between you and the employee seems to be a form of additional remuneration.
• The plan or arrangement is a form of tax avoidance.

If any of the conditions above are met, the employee has to declare the fair market value of any personal rewards he or she received on an income tax and benefit return.

Good luck, CRA, for trying to track that. They don't even have a mandate to request loyalty management firms from producing their customer lists. :)

Cheers,
Doug

July 1, 2016
8:39 am
rfdm4g4g9
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Does anyone care about Zag bank and Zenbanx anymore since the new kid on the block EQ bank came along with a higher rate ?

Haven't heard much from Zag bank and Zenbanx either through advertising, marketing or social media or forums.

I guess if people don't want to be with PC Financial or Tangerine, they are probably thinking about EQ bank as far as online only high interest rate banks are concerned. Zag bank and Zenbanx is probably not even on their radar anymore.

July 1, 2016
12:48 pm
MarkFog
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After the promotional rate ended on June 1, I moved my money out. Yes Zag is higher than PC or Tang, but not compared to some of the other online banks on the list. I would have kept my money there, but when they went below the average 1.70% on the list I moved out just on that principal.

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