business and corporate tax Archives

Is there a quarterly remittance requirement for GST/HST similar to Income Tax?

Yes. Similar to income tax, if the net GST/HST payable exceeds $3,000 on a GST/HST return, your business will be required to pay quarterly instalments of GST/HST. The CRA often does not inform the business of the GST/HST remittance requirement and as such, this is an area that most businesses overlook.

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

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

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”.

How to Prepare GIFI – Tax Financial Statements for T2 Watch Video

Are you a do-it-yourself kind of person, and want to prepare the T2 Corporate Tax Return on your own?

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 didn’t register for WSIB even though it was compulsory. What should I do?

You can make a voluntary disclosure on the WSIB website. By registering voluntarily, you will only have to make payment for WSIB premiums for the current year and the prior year. Interest and penalties will not be levied. If you get caught for non-registration, then you could end up paying huge amounts in penalties, interest, … Continue reading

What are the tax implications of my corporation paying critical illness premiums for me? What if I pay them personally?

Critical illness (CI) does not have specific mention in the Income Tax Act. It depends on the exact circumstances whether a CI policy resembles more to a life insurance or a sickness/accident insurance. CI premiums paid by the corporation are not deductible. When the policy value is paid to the corporation on diagnosis of a … Continue reading

What is the benefit of registering for GST/HST voluntarily?

The main benefit is that you can claim input tax credits (ITC) for the amount of GST/HST you paid on business expenses. For example, if you purchase materials from a vendor in the course of business, the government will provide you with credit for the amount of GST/HST you paid on the purchase. Therefore, any … Continue reading

What is the role of an Ontario agent appointed by a Foreign corporation?

If you are a foreign corporation (i.e US LLC or US C-Corp.) carrying on business in Ontario, then you’ll need to appoint an agent in Ontario of your foreign corporation. This will allow you to apply for the extra provincial license required to carry on business in Ontario. The main role of the agent is … Continue reading

Reasons IT consultants and contractors should incorporate.

Many IT consultants and independent contractors are operating as sole-proprietors without considering the benefits of incorporation, according to an informal survey by Accountants for IT Consultants. Not only are they paying higher taxes, they are also exposing their personal assets to potential legal liabilities. This article will cover the key reasons why it is beneficial … Continue reading

Top tax-saving tips for IT contractors and consultants.

An excellent tax saving strategy for independent contractors is to learn of and apply all tax deductions that are available for reducing taxable income. This article indicates numerous deductible expenses that can result in substantial tax savings for self-employed individuals.

Legal Ways to Reduce Business Taxes in Canada Watch Video

This short article will take you through the best legitimate methods to save business taxes in Canada.

Small Business Deductions – BNN Interview with Allan Madan Watch Video

Watch this short interview with Allan Madan on small business deductions.

Tag: business and corporate tax