Archives: Answers

Answer

Re: Is my Social Security number in Canada my Foreign Tax identifying number?

Hi Raul, Foreign Tax Identifying Number refers to your Canadian Social Insurance Number. Note that you must disclose your real name on form W8-BEN.

Re: Can I claim the GST I paid on my my business vehicle?

Yes, you can claim an input tax credit for the GST/HST paid on your vehicle purchase.

Re: Tax Implications of Transferring Client List from Sole Proprietorship to Incorporation

Hi Carol, Whether you close the sole proprietorship or transfer clients to a newly created corporation, there will be a deemed sale of the sole proprietorship’s assets. As a result of the deemed sale, any assets that have gone up in value will be subject to capital gains tax. Your biggest asset is likely your … Continue reading Re: Tax Implications of Transferring Client List from Sole Proprietorship to Incorporation

Re: Incorporating a sole proprietorship

Hi Rhonda, Your husband should continue to operate as a sole proprietor and not incorporate. Incorporating is beneficial from a tax perspective only if your husband has the financial ability to keep some of the profits inside the corporation’s bank account as savings. This way, he will defer paying personal taxes on the cash savings … Continue reading Re: Incorporating a sole proprietorship

Re: Withholding Tax on RRSP Withdrawal

Hi Yohan, The withholding tax rate on RRSPs withdrawals made by non residents of Canada is 25%. Splitting the withdrawals between two years will not make a difference.

Re: Working in USA with J1 status

Sorry, I also want to see I have no current property or family in Canada.

Re: GIFI Code for Balance Sheet

Hi Marshall, The tax payment made for the additional taxes owing as per the Notice of Assessment should be recorded to GIFI code 9990, current income taxes. Do not adjust the prior year’s retained earning if the payment was made subsequent to the year-end. Allan Madan, CPA, CA

Re: Taking dividends from your corporation

Hi William, Yes, you can take dividends in your first year of incorporation, so long as there is sufficient retained earnings.

Re: Transferring very small sole proprietorship to Corporation

?

Re: How to record Management Fees and Directors Fees from a Corporation

Hi, Me and my wife are 50% share holder of our corporation and directors .We have declared management fees on t2 tax returns.how to report that on our personal tax? Thank you,

Re: The Scientific Research and Experimental Development Tax Incentive

Hello Kareem, You are exactly right! It is an incentive program that encourages research development. The benefits are quite advantageous. 1) This program allows you to deduct Scientific Research and Experimental Development from your income for tax purposes 2)The program provides you with an SR&ED investment tax credit (ITC). You can use to reduce your … Continue reading Re: The Scientific Research and Experimental Development Tax Incentive

Re: Income from Affiliate Business with US Sales

Hello Priya, I have many clients with the same type of business model as you have. You do not have to pay US income taxes so long as you do not have a physical presence in the US. However, you may be asked to provide an EIN (US Tax ID Number) to the US companies … Continue reading Re: Income from Affiliate Business with US Sales

Re: How to record Management Fees and Directors Fees from a Corporation

Hello Harman, Income from management fees should be recorded on form T2125. Management fee income is taxed on an accrual basis as opposed to a cash basis. As such, even if the management fees were not paid to you by your corporation, they must still be included in your personal taxable income so long as … Continue reading Re: How to record Management Fees and Directors Fees from a Corporation

Re: Double Taxation

Hello Uman, You should bill / invoice customers through a Canadian corporation. Based on what you’ve told me, your Canadian corporation will not have a permanent establishment in Canada. However, we will need to apply for an EIN (US Tax ID Number) for your Canadian Corporation, which Amazon / Ebay and other e-commerce sites will … Continue reading Re: Double Taxation

Re: Moving RSP’s

Hello Frankeln, There’s a 15% withholding tax payable to the Canada Revenue Agency on RRSP withdrawals made by Americans. The amount withdrawn will be included in your American tax return (1040) and will be subject to regular tax rates. You can claim a foreign tax credit on your American return for the Canadian withholding tax … Continue reading Re: Moving RSP’s

Pin It on Pinterest