5 Tax Scams That Every Small Business Owner Should Know Watch Video
Allan Madan, CPA, CA
Every small business owner should beware of the tax frauds that are preying on their business. Read More…
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The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CPA, CA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
Hi there. Great blog! We have recently bought a fast food franchise in BC. There is approximately $239,000 of leasehold improvements and fixturing to be done.
Two questions
1. In regards to taxes around the leasehold improvements , do we get both the GST as well as the PST portion back and do we get the refund right away or do we have to wait until our year-end?
2. Can you suggest the best month for year end for a small business?
Hi Jakki, you can only claim back the GST/HST paid as a refund (i.e. Input Tax Credit). The PST paid is added to the cost of the leasehold improvements made and depreciated over time. You have to wait until your file your GST/HST return for the refund.
Consider July 31 as a year-end for your corporation. This will allow you to declare a bonus as of July 31 in order to reduce corporate taxable income, BUT the bonus doesn’t have to be paid until 6 months AFTER the year end (i.e. January 31). In this way, you get the benefit of a corporate tax deduction for the unpaid bonus as at the year-end (July 31), and you don’t have to pay tax on the bonus until the following year (January 31).