FAQs Archive

Can you explain how I can withdraw the over-contributed RRSP amounts from the financial institution?

If you over contribute in your RRSP (even beyond the $2,000 allowed) you run the risk of being penalized 1% of the over contribution per month. So when you realize you do not want to leave it in the RRSP and be penalized, you try and withdraw it from the financial institution. However, the institution … Continue reading

Can I claim the moving expenses incurred when emigrating from Canada as a deduction on my departure tax return?

No, emigrants are generally not allowed to deduct moving expenses incurred when moving from Canada to another country. For more information, visit here.

I resided in Canada for more than 183 days this year. Will I have to file Canadian tax return as a Canadian resident?

The answer is you may not be required to. If your home country has a tax treaty with Canada and you continue to maintain a permanent home in your home country, you will still be able to file Canadian tax return as a non-resident.

I purchased a corporate bond during the year. The purchase price included accrued interest to the seller of the bond. Is there a way for me to avoid being taxed twice on accrued interest?

Yes, to avoid double tax you are entitled to deduct accrued interest you paid when you bought the bond from the interest income for the year. Accrued interest will be deducted in Schedule 4 under carrying charges and interest expenses.

I am a sole proprietor and am selling my business. Can I use the lifetime capital gains exemption of $800,000?

As a sole proprietor you are not eligible for the lifetime capital gains exemption (CGE). The CGE is only available on the sale of the shares of a Canadian Controlled Private Corporation (CCPC). The CGE, as the name suggests, exempts up to $800,000 of profit (i.e. capital gain) on the sale of shares of a … Continue reading

I am considering taking out a loan to invest through my RRSP/TFSA/RESP. Will the interest on the loan be tax deductible?

No, although interest on loan borrowed to invest through non-registered accounts are tax deductible (normally up to the amount of investment income), interest on loans borrowed to invest through such registered savings plans are not tax deductible.

If I perform a service in one province for a client located in another province, how do I determine which GST/HST rate to charge?

The sales tax rate to charge on a service provided depends on the place of supply for that service. For a service, the place of supply is the usually the location of the recipient. The location of the recipient is usually determined by their address. The general rules are subject to change based on specific … Continue reading

How can I check whether the CRA has received my payment?

You can check by giving the CRA a call a few days after the payment is made. The CRA’s contact numbers are listed here. The other option is to log in to your “My Account” on the CRA website and access your information. The registration generally takes around 10 business days.

I often take clients to a sports or entertainment event and provide gifts to maintain client relationships. Will these costs be considered fully deductible or 50% deductible?

The expenses mentioned above will be considered entertainment expenses, so that only half of the amount spent can be deducted. This includes gift cards for food and drinks, restaurants and entertainment venues. Gifts that are food (e.g. box of chocolates) or drinks (e.g. wine) are also considered to be “meals”.

Am I eligible to receive CCTB abroad?

If you are eligible to receive the Canada child tax benefit (CCTB) you will continue to receive it during your absence from Canada. To be eligible for CCTB you must meet the following criteria: You must live with the child and the child must be under 18 years of age; You must be primarily responsible … Continue reading

What is a NR75 form?

The NR75 form is a non-resident remitter tax registration form. It is required to be completed by the person/corporation remitting non-resident taxes. Upon completion, the form must be sent to the International Tax Services Office.

If I cannot find my tax slips, what can I do?

If you’ve lost/misplaced/or never got your tax slips such as a T4, T4A, T5, T4RSP, etc, you can call the CRA and have them mailed/faxed over to you. You can call the CRA at 1-800-959-8281 to submit a request with a representative.

When do tax implications occur for owning precious metals, such as gold and silver?

Tax consequences for gold/silver arise only upon sale or deemed disposition. Once sold, the income may be business income or capital gain depending on the facts. IT- 459 discusses the factors that indicate whether a transaction is a capital or income transaction. For instance, if an individual buys and sells gold regularly, then it will be … Continue reading

How do I determine which GST/HST rate to charge when I sell to multiple provinces in Canada?

Generally speaking, the rate of GST/HST to charge depends on the place of supply for the good that is being provided. The place of supply is generally where the legal place of delivery takes place. So, if goods are being delivered to a ‘participating province’ HST of 13% will be charged. If, for example, the … Continue reading

I have a non-resident spouse, can I claim a spousal amount tax credit?

According to the CRA, in order for an individual to claim the spousal tax credit for a non-resident spouse, it is necessary that such non-resident person be supported by the individual. The question of support is determined on the facts of each case. In determining if the non-resident spouse is supported by the individual, the … Continue reading

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