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A shareholder can claim an ABIL for shareholder debt that has become uncollectible. One half of an ABIL can be deducted by a shareholder against other sources of personal income he/she has in the year. For further information on how to apply for an ABIL, please visit the following site: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-217-228-business-investment-loss/lines-217-228-what-happens-when-you-have-abil.html

Thank you for your question. The remaining $50,000 can be paid as a taxable dividend (other than eligible). This taxable dividend allows the company to recover part or all of the balance in the corporation’s RDTOH account.

Hi, Thank you for your question! The following are the tax implications for your mother if she sells her Toronto property: 1. Your mother’s lawyer will hold-back 25% of the sales proceeds in his Trust Account. 2. Your mother must file an application for a Certificate of Compliance in respect of the sale of her … Continue reading Capital Gain Tax Implications

Thank you for your email. You should speak with a mortgage broker that specializes in mortgages for self-employed individuals. Ask the mortgage broker whether you can make a lower down payment toward the purchase of a home if you are receiving payroll and a T4 slip from your corporation. If the answer is yes, then … Continue reading Sole Proprietorship or Corporation as a Consultant working for foreign company

There are two methods that you can use to pay yourself from your corporation: (a) dividends, or (b) salary. Dividends are reported on a T5 slip and are not subject to payroll taxes. Salary is reported on a T4 slip and is subject to payroll taxes. The method that you are currently using (i.e. subcontractor … Continue reading t4A needed OR NOT

Interest paid by a Canadian bank / Canadian financial institution to a tax resident of Honk Kong is not subject to withholding tax. In other words, you have no tax obligation to the CRA in respect of the interest received. Furthermore, you should ask your bank to cancel the incorrectly issued T5 slips and replace … Continue reading How to file taxes on Bank interest issued on T5 from 2012 to 2017 to non-residents

Owning a rental property in Canada is a secondary tie and will not cause you to remain a tax resident of Canada. Make sure there is a lease agreement in place and that rent is charged at market rates. As a non-resident of Canada owning a Canadian rental property, you will be responsible for paying … Continue reading Best Way to Emigrant Classification

If you are residing in and paying tax in China, then you can rely on the tax-treaty between China and Canada. According to the tax-treaty, you are a resident of the country where your permanent home is located. A permanent home can either be rented by you or owned by you. If you have a … Continue reading How to become non residenr after already being gone from Canada

Consider incorporating a Canadian company to bill your clients. Canadian controlled private corporations pay a low rate of corporate income tax (approximately 13% on the first $500,000 of taxable business profits). Furthermore, Canadian corporations can claim various tax deductions for business expenses. Finally, pay yourself a salary or a dividend from your corporation so that … Continue reading Independent Contracting in Nova Scotia, Canada

Yes, Canadian ETFs are subject to PFIC reporting.

Thank you for your questions. My answers are as follows: 1. You can claim the personal tax credit for the 3 months that you are a tax resident of Canada. This credit will be prorated by the number of days that you are a resident of Canada divided by 365 days. 2. You will need … Continue reading Tax on returing Resident and on Spouse Earnings, who is still non resident

Now that you have permanently relocated to Canada, you are a tax resident of Canada. This means that your global income will be subject to Canadian income tax, starting from the date that you permanently moved to Canada. Since your wife is linked to you, she will also be subject to Canadian income tax on … Continue reading Tax on Spouse income who is not in Canada

Thank you for your question. If you have a guaranteed job when you return to Canada and you continue to receive benefits from a Canadian employer while you are away, the CRA could argue that you did not intend to permanently leave Canada and as such you are a resident of Canada. As a resident … Continue reading resign and relocate or go on a global secondment – which option is better for declaring non-residency

According to the Canada-US tax treaty, business profits are sourced to the country where there is a permanent establishment (fixed place of business, PE). A PE excludes a warehouse used for the storage and distribution of goods. It appears that your PE will be in the US, once you move, where you are physically working … Continue reading Canadian source income, non-tax resident

Loans made by a corporation to a shareholder are taxable in the year that the loan is received by the shareholder. This means that you would have to go back and amend your personal tax return for each year to report the loan received in that year as ‘income’. This will trigger a lot of … Continue reading Errors in small business tax filing, large sum in retained earnings