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.
Tag Archive for Grant Gilmour
What are the proposed tax changes on passive investment portfolios held inside a private corporation?
The Canadian government is proposing changes on tax treatment of passive income on investment portfolios held inside a private corporation to neutralize the financial advantages of such holdings. This targets private corporations being used as investment vehicles for retirement. Read More
What is a schedule 20 as part of a T2 corporate tax return?
Schedule 20 is used to calculate an additional tax on non-resident corporations. This tax is called Part 14 or ‘branch’ tax and relates to non-resident corporations that earn income from a business carried on in Canada (see International FAQ #24) and have a permanent establishment in Canada (see FAQ #127). Read More
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.
If your company is a Canadian taxpayer, Canadian corporate tax is calculated by allocating taxable income between the provinces in which your company has a permanent establishment presence.
Discussion:
The company is considered to have a permanent establishment presence in any Canadian province where any of the following conditions are met:
- A fixed place of business such as an office, branch, warehouse, workshop or factory in the province.
- An agent or an employee present in the province.
- The company owns land in the province.
- There is substantial use of machinery or equipment by the company in the province.
There are many options for issuing payments to vendors; however, the fees involved need to be taken into consideration as over the course of a year it can impact your company’s bottom line.
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.
Current Articles
Explaining Nexus Threshold By StateUnderstanding the intricate web of sales tax nexus thresholds is key for businesses navigating the complexities of state taxation laws. As the digital age continues to reshape traditional business […]
Alert: Advisors To Clients Who Have Created Family Limited PartnershipsWe wanted to share with you a topic discussed at last week’s live Q&A session, which was held during one of this spring’s Fundamentals of Flow-Through® Partnership, LLC & S Corporation Tax […]
Reform California Unveils Plan To Repeal New “Flat Fee” Utility SurchargeCalifornia politicians are imposing a new “flat fee” on your utility bill that you have to pay regardless of whether you use any energy that month and the rate will now be based on your income! […]
Progressive Tax Could Cost Nearly $1800 A Year In Home Equity To Illinois Homeowners If Voters Approve The IncreaseAccording to the Illinois Policy Organization… Gov. J.B. Pritzker promises his $3.7 billion “fair tax” would only hit those making over $250,000, but it also threatens to cost more than 3.2 […]
Thinking About Selling Or Merging Your Tax Advisory Practice?We have been approached many times over the years for a solution for small firm business owners who want to sell their practice and need a succession plan. We now have a solution for you and your […]
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