Tag Archive for Canada

Streamlined Program Leaves Snowbirds Out In The Cold

For many U.S. expats who are delinquent in their expat tax filings, the Streamlined Procedures offer a great solution for catching up with limited or no penalties.  Due to the Streamlined program’s qualification requirements, however, American citizens living in Canada, or other countries, who regularly visit the U.S. may find it particularly difficult to participate in the program. Read more

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

The Biggest Cost Of Being A Dual Canada/U.S. Tax Filer

The reality of being a “DUAL” Canada U.S. tax filer is that you are a “DUEL” tax filer

“It’s not the taxes they take from you. It’s that the U.S. tax system leaves you with few opportunities for financial planning.”

I was recently asked “what exactly are the issues facing “Canada U.S. dual tax filers?” This is my attempt to condense this topic into a short answer. There are a number of “obvious issues facing U.S. citizens living in Canada.” There are a number of issues that are less obvious. Read more

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

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

The Exit Tax Is A Perfectly Bad Idea

This post is based on (but is NOT identical to) a July 17, 2017 submission in response to Senator Hatch’s request for Feedback on Tax Reform.

Why is the United States imposing an “Exit Tax” on their “non-U.S. pensions” and “non-U.S. assets”? After all, these were earned or accumulated AFTER the person moved from the United States?”

Part A – Why certain aspects of the Exit Tax should be repealed Read more

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.


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

U.S. Imposes Full Taxation On Canadians—Tax Reform 2017

The United States is “making noises” about “tax reform”. Senator Orrin Hatch requested submissions from “stake holders” on what should be included in tax reform. He has clearly received (as did the Ways and Means Committee in 2013 and the Senate Finance Committee in 2015) many suggestions advocating the repeal of “citizenship-based taxation”.

As noted at a site compiling the submissions of those affected by U.S. extra-territorial taxation: Read more

Why Is The U.S. Imposing Full Taxation On Canadians?

Why is the United States imposing full U.S. taxation on the Canadian incomes of Canadian citizens living in Canada?

The Internal Revenue Code mandates that ALL “individuals”, EXCEPT “non-resident aliens”, are subject to full taxation, on their WORLDWIDE income, under the Internal Revenue Code. The word “individuals” includes U.S. citizens regardless of where they live and regardless of whether they are citizens and residents of other countries where they also pay tax. This means that, by its plain terms, the United States imposes full taxation on the citizens and residents of other nations, because they are also (according to U.S. definitions) U.S. citizens. The United States is the only country in the world that has a definition of “tax residency that mandates full taxation based ONLY on citizenship. Read more

Canadian Man Pleads Guilty to Conspiring to Defraud U.S.

A Canadian man pleaded guilty today in Rochester, New York to conspiring to defraud the United States and stealing government funds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney James P. Kennedy Jr. for the Western District of New York. Read more

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

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