Canada Faqs

The CRA issues a notice of assessment (NOA), which shows the CRA assessment of your tax return filed. Usually, CRA mails you the notice of assessment after you few weeks of your filing. However, you can obtain your notice of assessment from CRA “My Account.” Please follow the link either to register for my account to sign in with CRA. https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html

Yes, you can if your spouse helps you in the business or helps you manage the office and administration, etc. for your business. You can pay a reasonable amount from the business. You can pay that either as a part-time or full-time employee or as a self-employed contractor. If you are paying as an employee then you do not need to deduct EI. The income your spouse receives, he/she needs to report his/her annual income tax return.

Exempt means those supplies are never taxable for GST/HST purposes. Zero-rated means the supplies are taxable, but in specific circumstances like “export,” they are zero-rated. Please visit our Canada blog for “GST/HST: Goods and Services Tax/Harmonized Sales Tax” for further information.

Unless your revenue from all taxable supplies exceeds the threshold. Please visit our Canada blog for “GST/HST: Goods and Services Tax/Harmonized Sales Tax” for further information.

No. Senior management is not covered by WSIB. For further information please visit “Hiring an employee.”

WSIB is the Worker Safety Insurance Board premium that the employer has to pay as per the prescribed rate. To learn more, please visit our Canada Blog for “Hiring an employee.”

CPP is the Canadian Pension Plan contribution that an employer is responsible for deducting from each employee’s pay cheque and contributing employer share. To learn more, please visit our Canada Blog for “Hiring an employee.”

No. Service Canada will not cover your spouse for an EI claim. To learn more, please visit our Canada Blog for “Hiring an employee.”

EI is the employment insurance premium that an employer is responsible for deducting from each paycheque of the employee and contributing employer share. To learn more, please visit our Canada Blog for “Hiring an employee.” https://www.rkbaccounting.ca/hiring-and-employee/

No. That is your personal use. You can only claim mileage when using the vehicle for business purposes. For e.g., visiting customers, suppliers, accountants, etc. Please visit our Canada blog “Motor Vehicle Expenses CRA” to learn more about this topic.

Yes. You can write off your down payment over the period of the lease term. Under the financing arrangement, you claim amortization hence you can not write off the down payment. Please visit our Canada blog “Motor Vehicle Expenses CRA” to learn more about this topic.

Assuming you will be parking the vehicle at your residence over the night, it is not advisable to buy the saloon car under the corporation. Stand charge may apply, which will be added to your income. Please visit our Canada blog “Motor Vehicle Expenses CRA” to learn more about this topic.

No. You can claim it as a medical expense on your personal income tax return. For further information please visit our Canada blog for “36 small business expenses you can claim.”

No. You can only write off as your business expenses if the policy was required as per the financing agreement for the business finance. For further information please visit our Canada blog for “36 small business expenses you can claim.

Yes. You can take loan from the corporation, but you have to repay within 365 days otherwise that will be added to your income as Dividend.

Yes, however, the corporation does not have to deduct EI and contribute; the corporation does not have to pay WSIB.

Yes, the shareholder and the corporation have to file an election under section 85 of the Canada Income Tax Act. To know more please visit our Canada blog “Transfer of assets between the Shareholder and the Corporation.”

The dividend is the corporate profit declared by the corporation from its retained earnings and paid to the shareholder. The shareholder includes dividends as income on their tax return and pays tax on that.

No, an annual return is filed with Corporation Canada if it is a federal corporation, and with the province in which your business is located. The income tax return is filed with CRA only for income tax purposes. Failure to file an annual return may result in dissolution of your corporation.

The best province is the province in which your business is located. However, the following provinces allows a non-resident Canadian to incorporate. These provinces are British Columbia, Nova Scotia, New Brunswick, Quebec and Ontario.

Depending on your situation, in general, federal incorporation is better than provincial.   To learn more, please visit our Canada blog “What are the primary business structures in Canada?”

Major benefits are limited liability protection, name reservation, and lower taxes for a Canadian Controlled Private Corporation. To learn more, please visit our Canada blog “What are the primary business structures in Canada?”

No. You may continue as self-employed. However, if you want to take advantages of incorporation get in touch with your accountant for further advice or to learn more please visit our Canada blog “What are the primary business structures in Canada?” https://www.rkbaccounting.ca/what-are-the-primary-business-structures-in-canada/

You need to have at least 25% of your Board of Directors resident in Canada to incorporate a Federal Corporation in Canada. There are few provinces, including Ontario allow a non-resident to incorporate provincially. To learn more, please visit our Canada blog “What are the primary business structures in Canada?” https://www.rkbaccounting.ca/what-are-the-primary-business-structures-in-canada/

Only if you own more the $100k properties outside Canada. If you fail to declare the penalty is $2,500.00 every year. This applies to all Canadian residents for tax purposes.

Foreign tax credit is the deduction from your total taxes payable on your Canadian tax return. You can claim foreign tax credit if you have paid income tax to another country with whom Canada has a tax treaty.

If Canada has a tax treaty with another country, you will be eligible to claim foreign tax credit to avoid double taxation issues.

It depends on your tax residency status. If it is determined that you are resident of Canada for tax purposes, you file your income tax return in Canada.

All residents of Canada, for tax purposes, have to report their worldwide income in their income tax return, irrespective of their citizenship or immigration status. If your residency status is determined as a non-resident of Canada for tax purposes, then you do not have to report your worldwide income.

The CRA issue a notice of assessment (NOA), which shows the CRA assessment of your tax return filed.

By the 60th day of the following year unless it falls on weekend or a nation holiday in which case the next business day will be the deadline.

This is a tax deferral retirement saving plan. When you contribute to your RRSP within your allowable limit, the amount you contributed is deducted from your total taxable income. The year you withdraw money from your RRSP, the amount you withdraw is added to your total taxable income. To learn more, please visit our Canada blog “RRSP Tax Planning.” https://www.rkbaccounting.ca/rrsp-tax-planning/

No. You contribute to fund your children university education as per the specified limit and the Government of Canada also contribute as a government grant to your children RESP. The amounts contributed by the Government of Canada as a grant will be taxable in the hand of your child when they withdraw.

Only in Canada, you can avoid the penalties and interest on late payment of withholdings taxes. While in the USA, you may want to look into the other profit distribution options to avoid medicare tax and social security tax. Different plannings may apply to S Corporation and C Corporations.

You may need to plan before you fall into double taxation or loss some benefits and exemptions. Your tax status may change from resident to non-resident. However, you will still be responsible for paying income tax on your income from Canadian sources. You may be subject to non-resident withholdings taxes.

You can open an account with a financial institution to deposit the money within your contribution limit and room for the year. Any income generated is tax-free throughout your life time. However, you have to be 18 Years of age and have a valid SIN.

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