TaxConnections

 

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please enter your input in search

Archive for Non-Resident Corporation

Security Deposit Required By Canadian Revenue Authority For Non-Resident Corporation

Grant Gilmour- Canada Revenue Authority Requires Security Deposit For Non- Resident Corporations

A non-resident corporation who is registered for GST/HST is required to provide and maintain a security deposit with the Canada Revenue Authority (CRA). However, if under a specified threshold of sales and net tax payable or refundable, a corporation may be exempt.

Discussion

The minimum amount of security is $5,000 CAD, but can be as a high as $1 million CAD. The initial security deposit amount is based on 50% of the estimated net tax for the year. Net tax is calculated using the company’s Canadian net profit (Canadian sales less Canadian expenses) for the year, multiplied by 5% GST rate (or HST if selling in provinces with HST — see International FAQ #39). Then 50% of the net tax amount is your required security deposit.

Read more