Archive for Canada

Declaration of Tax Residence for Entities in Canada

Grant Gilmour, Tax Advisor

In December 2016, an additional section was added to the Income Tax Act (ITA) that requires Canadian financial institutions to collect certain information about your company. The information is not automatically sent to the Canada Revenue Agency (CRA); however, if the financial institution determines the information needs to be reported to the CRA they will. CRA will then determine if the information needs to be sent to the foreign government related to the company’s residence or the company’s controlling person’s residence. Exchanging information is a new international standard of tax cooperation.

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US Tax Reform Bill Appears To Confiscate 12% of Retained Earnings of Certain Canadian Controlled Private Corporations

John Richardson, Tax Advisor

Kudos to Max Reed for his quick analysis on how the proposed U.S. Tax Reform bill may affect Canadian citizens/residents who also hold U.S. citizenship.

Reed’s analysis, which has been widely discussed at the Isaac Brock Society includes provisions that are very damaging to those who are the owners of Canadian Controlled Private Corporations (noting they are also under assault from Messrs. Trudeau and Morneau). The damaging provisions are both prospective and retrospective.

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Converting Surplus Income Proposed Tax Changes (Canada)


The Canadian government is proposing tax changes to prevent private corporations from converting surplus income to a lower-taxed capital gain and stripping it from the corporation. This targets larger private corporations.

The Canadian tax system is built on the concept of tax integration. Based on the view of principles of fairness and neutrality, tax integration aims to ensure that an individual is indifferent between earning income through a corporation or directly as the after tax results should be the same.

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The Canada-U.S. Tax Treaty Does Not Protect From Tax Liability

Dewees 1: The Canada-U.S. tax treaty does NOT protect Canadians from U.S. tax liability but does mean that Canada will NOT assist the U.S. in collection!

There are certainly benefits to being a Canadian citizens. Perhaps Canadian citizenship is the most important line of defense against the confiscation that is OVDP. Read more

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

Consequences Of A Corporation Leaving Canada To Reside In Another Country

Generally, a corporation is a resident of Canada if its central management and control is exercised from Canada. When this stops occurring, the corporation is considered to be a non-resident of Canada, regardless if initially incorporated in Canada or not. This can result in taxes owing.

When a corporation is no longer a resident of Canada, it is considered to have a deemed tax year end and a deemed disposition of its property.

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Important Canadian Tax Dates For 2017

Are you hoping to never miss a corporate filing deadline? Canada Revenue Agency (CRA) has a number of dates and deadlines of importance to corporations. Failure to comply with these deadlines may raise a red flag with CRA, which in turn may trigger an audit.

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International FAQ – Deconstructing Director’s Liability

Grant Gilmour

What is a Director’s Liability?

As a Director of a Corporation you are responsible for ensuring the entity makes the appropriate filings and remittances of amounts held in trust to the Canada Revenue Agency such as GST/HST and payroll deductions.

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Canadian FAQ – Shareholders’ Equity – What You Need To Know!

Grant Gilmour

What is Shareholders’ Equity? Shareholders’ Equity is often used to measure the net worth of a company. It is used to assess the financial strength of a company.


Shareholders’ Equity (also commonly referred to as Owners’ Equity) comes from two sources:

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How To Get A U.S. Social Security Number In Canada – Tax Compliance

John Richardson

Why do some Canadians wish to have a U.S. Social Security number?

Many Canadians are in the process of coming into U.S. tax compliance. One might ask: Why would a Canadian citizen residing in Canada wish to come into U.S tax compliance?

There are two reasons why Canadian citizen/residents file U.S. tax returns:

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International FAQ – What Is An EIN And Why You Need It!

Grant Gilmour

What is an EIN (Employer Identification Number) and why do I need one? Or why would I not want to have one?

The EIN is the United States of America (USA) equivalent of a business number. It is the number used to identify a business in the USA for federal taxation.

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Canadian Tax Help – How Does Accounts Receivable Affect Profitability?

How do past due invoices impact my company’s profitability?

Although Accounts Receivable (AR) is considered an asset, having slow turnover of receivables can negatively affect your company’s bottom line.

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