Grant Gilmour | TaxConnections

25 Aug 2017

Canadian Tax FAQs – Proposed Canadian Tax Changes

What are the proposed tax changes to private corporations that the Canadian government made in July 2017 and what do these changes mean for my company?

On July 18, 2017, the Canadian government proposed tax changes in an effort to remove tax advantages that small business owners have and address aggressive tax planning strategies involving the use of private corporations. These proposed changes are open for discussion until October 2, 2017, before being formally submitted for legislation. Read More

Written by Grant Gilmour | Posted in International

17 Aug 2017

Canadian Tax FAQs – Difference Between GST And PST

How does PST (Provincial Sales Tax) work and how is it different from GST (Goods and Services Tax)?

PST is a provincially levied retail sales tax that is generally applied to goods or services acquired for personal use in British Columbia, unless there is a specific exemption. GST is a federally levied value added consumption tax that is applied to the supply of most of the goods and services purchased in Canada. Read More

Written by Grant Gilmour | Posted in International

11 Aug 2017

Canadian FAQs—Cut-Off Procedures And Controls

What cut-off procedures and controls should I have in place and why are they important for my company?

One of the fundamental accounting concepts is the matching principle (see FAQ #171), expenses must match the related revenue. If a sale is recorded in the fiscal period, the expenses related to that sale should also be recorded in the same fiscal period. Cut-off procedures and controls help to ensure that this matching occurs. Read More

Written by Grant Gilmour | Posted in International

08 Aug 2017

T1134 Information Return – Canadian Tax FAQs

What is a T1134 information return relating to controlled and not-controlled foreign affiliates?

If a Canadian corporation or individual has an interest in a foreign affiliate, whether controlled or not, it will need to complete a T1134 information return. The T1134 information return is broken into two forms, a summary and a supplement. A separate supplement must be filed for each foreign affiliate. Read More

Written by Grant Gilmour | Posted in International

28 Jul 2017

How Holdbacks Are Treated For Tax Purposes—Canadian Tax

How are holdbacks treated for tax purposes?

The construction industry has special tax rules relating to when the income is recognized for tax purposes.

Discussion:

A holdback amount on each invoice (i.e. 10% of the progress billing) is a typical billing method in the construction industry. The customer does not pay this amount until they have approved the work as 100% completed and without deficiencies. Read More

Written by Grant Gilmour | Posted in International

21 Jul 2017

Participating vs Non-Participating Shares – Canada Tax FAQs

Why should I be concerned about participating and non-participating shares in my company?

Shares in a corporation can be participating or non-participating, among other features. Participating shares are eligible to “participate” in the equity growth of the company and be permitted to receive dividends. Non-participating shares do not benefit from the equity growth of the company. This can potentially impact the valuation of shares. Read More

Written by Grant Gilmour | Posted in International

14 Jul 2017

Class 10 vs 10.1 Assets – Canadian Tax FAQs

How do I determine if my new vehicle is a Class 10 or Class 10.1 asset and what are the tax implications?

Any vehicle with a purchase cost of over $30,000 can be classed as a luxury vehicle (a 10.1 asset). This classification restricts the amount of depreciation that can be deducted from income which reduces your corporate expenses and increases your corporate tax. It also limits the amount of GST that can be recovered. The determining factor is whether the vehicle is a passenger vehicle or a motor vehicle by CRA’s definitions. Read More

Written by Grant Gilmour | Posted in International

07 Jul 2017

Understanding The T106 Information Return – Canadian Tax

What is a T106 information return of non-arm’s length transactions with non-residents?

Facts:

A T106 is an annual information return where a corporation reports its non-arm’s length activities with non-residents. Non-arm’s length transactions are generally transactions where the parties are considered to be related. Read More

Written by Grant Gilmour | Posted in International

30 Jun 2017

Canadian Tax FAQs – What Is A Trust Audit?

What is a Trust Audit?

Some professionals such as Real Estate Agents and Lawyers keep trust accounts (funds held on behalf of their clients). There are special accounting rules for these trust accounts and a Trust Audit is designed to ensure compliance with these accounting rules. Read More

Written by Grant Gilmour | Posted in Canada

16 Jun 2017

Canadian FAQ – GST On Real Property

How is GST (Goods and Services Tax) reported and paid on the purchase of taxable Real Property?

For tax purposes, Real Property refers to land and anything permanently affixed to the land that can be purchased or leased including mobile homes, commercial buildings, apartments, homes and offices. Generally speaking, GST is charged on the sale or lease of Real Property.

Written by Grant Gilmour | Posted in International