New CPAs May Know More About GST and Less About Planning

The body of knowledge that is tested on CPA Canada's common final examination (CFE), as set out in the CPA Competency Map, is expected to change when a revised competency map, which will affect the 2019 CFE, is issued in December 2018. An outreach package released in June 2018 describes the proposed changes and invites input at taxmatters@cpacanada.ca; this package followed the October 2017 report of a working group (available from the same e-mail address). In the tax area, the goal of the changes is to ensure that newly qualified CPAs are fully capable of handling all routine business activities. To make this possible, coverage of non-routine activities has been downgraded: "The CPA Competency Map will include an increased focus on GST/HST . . . and a reduction in expectations for some of the more complex income tax topics will be considered" (page 5). The changes to the CPA Competency Map also recognize the use of technology and data analytics in the tax function.

A key routine business activity for CPAs is helping businesses navigate the intricate rules of GST/HST, and the public expects CPAs to have this competency. However, the current map, introduced in 2013, places limited emphasis on this subject area. Further, exposure to GST/HST through pre-CFE work experience seems unlikely, since no practical experience in tax is required to obtain the CPA designation. (The legacy CA program required 100 hours of on-the-job practical tax experience; the legacy CMA and CGA programs did not require any.) To fill this gap, the proposed competency map for the taxation area provides that a newly qualified CPA is expected to have a working knowledge of basic GST/HST concepts. This knowledge includes calculating GST/HST payable, identifying filing deadlines, and determining tax payments and instalment requirements in routine situations. Candidates who go beyond the Core 1 course in the CPA Professional Education Program and select the tax elective should be able to identify more advanced GST/HST issues that will be encountered in non-routine situations. These issues include purchase and sale of a business, intercompany transactions, and transactions with non-residents.

Given the increased focus on the GST/HST in the CPA Competency Map, something has to go. The plan is to decrease coverage of tax-planning strategies in more complex situations: these are considered non-routine activities. Such topics include the use of sections 85, 86, and 51 of the Act. These topics would be more appropriate for CPAs who aspire to become tax specialists after certification. As a result, the topics will be introduced at an awareness level in the tax elective and will be further explored in post-certification courses, such as CPA Canada's In-Depth Tax Course. In addition, corporate reorganizations will be covered at the highest level (C) in the elective only.

One issue that was discussed by the working group, but did not become part of the June 2018 package, is the integration of income tax and GST/HST with accounting for income taxes. The idea is to abolish the "silos" of tax and financial accounting—that is, to teach the two topics together rather than separately. In my experience, this approach is supported by my colleagues in public accounting. However, given the time allotted for instruction and the volume of tax material that needs to be covered, an integrated approach may not be possible at present.

Vincent Didkovsky
S+C Partners LLP, Mississauga
Vincent.Didkovsky@scpllp.com


Canadian Tax Focus
Volume 8, Number 3, August 2018
©2018, Canadian Tax Foundation