Owning and operating a business in Canada comes with certain legal obligations. The Canadian Revenue Agency (CRA) requires the regular filing of Canadian sales tax, payroll tax, and income tax. Each province and territory also has its own tax requirements. These regulations are often referred to as government compliance requirements.
Talk to a tax accountant near me and avail tax services near me.
Tax returns and payments must be filed on time.
Failure to report and return within the specified deadlines results in costly penalties and interest costs. This site provides the Canadian accounting information you need to know so you can put more money in your pocket and avoid those fees (i.e., stop flushing your money down the toilet!).
Even if you can’t pay the taxes you owe, try to stay tax compliant by always filing your compliance return by the due date to avoid costly penalties. However, interest will be charged on the outstanding balance. The penalty for late or non-submission of a tax return is 5% of the tax owed plus 1% for each month the return is late but no longer than 12 months.
If you’ve been charged a late filing fee on three prior years’ returns, your late filing fee could be 10% of the balance due in the current year plus 2% for each full month in which your return is up to 20 months overdue.
In any case, interest charges will be applied to the outstanding balance, which is determined on a quarterly basis.
In order to keep up with tax compliance in Canada, talk to a tax accountant near me and avail tax services near me.
Did you miss ANY of the filing deadlines last year?
It is much better to apply NOW than to wait for the CRA to apply.
More than a year late in applying?
Learn more about voluntary disclosure.
Are you behind on your taxes because life events were out of your control…things like divorce, death, and illness? You may be entitled to tax relief from the taxman for interest on unpaid taxes.
Do you file your tax return every year?
If possible, pay what you can when you deposit, even if it’s not your entire balance.
What is considered an “official” date of receipt in the CRA?
Corporate Compliance returns must be physically received by the CRA (not Canada Post) by the due date. The date of shipment by Canada Post is not considered the date of receipt. (The date marked in the email is only valid as a receipt date for individuals, not for businesses.) If the due date falls on a weekend or public holiday, you have until the next business day.
If you are paying electronically, check with your financial institution to see how long it takes from the date of payment for the funds to reach the CRA. Funds must be received by the CRA (not your bank) by the due date. Most financial institutions proceed overnight. In most cases, the online payment must be made by midnight on the day before the payment is due.
What is the difference between calendar year-end and fiscal year-end?
When fulfilling tax obligations, it is important to understand the difference between the end of the tax year and the end of the calendar year. The end of the calendar year means the twelve-month period from January to December. Most sole proprietorships in Canada must have a calendar year-end. Generally, CRA requirements do NOT allow sole proprietorships to choose a tax year-end. However, when filing a tax return for the first time, alternative year-end choices other than December 31 are available to eligible businesses.
Fiscal year-end means any consecutive twelve-month period that has been selected (or judged by a credit rating agency) to be an “accounting” year. You would normally choose this as the least intense period of activity. Any changes at the end of the fiscal year, once selected, must be approved by the CRA. If you have more than one company, you may want each company to have a different tax year-end to allow for optimal tax planning.
Have you wondered whether the new Accounting Standards for Private Enterprises (ASPE) that came into effect on January 1, 2011, has affected the way you report government transfers in your financial statements?
ASPE disclosure obligations have been reduced… and simplified.
Added a major reveal. There is now a requirement for government transfers other than income tax to disclose the amount due at the end of the period. Take help from accountants near me.
This is because lenders are the primary users of small business balance sheets. Creditors consider the status of government tax remittances important because they have priority status in bankruptcy.
Canadian accounting got a little easier in October 2009 when the CRA introduced the My Payment service. You can pay your corporate (and individual) taxes online instantly from your bank account through a secure connection with approved Canadian financial institutions. No banking information is shared with the CRA. Follow the instructions and make your selection as instructed.
If you pay after business hours, on a weekend, or on holiday, your online payment will be credited the next business day. This service will not allow the sending of dated transactions.
2016 introduced the possibility to pay with Visa debit cards (CIBC, SNB, RBC, and TD) and later with MasterCard debit cards (BMO and Servus CU). I am NOT a fan of this payment method as it often doesn’t allow you to choose which account to pay from. Interac is the best option, but now only RBC and TD, and some credit unions offer it. Accountants near me can help with this.
Institutions that can currently participate are RBC, TD, BMO (personal accounts only, which shouldn’t be a problem for individuals), Scotiabank, and various credit unions because they have an INTERAC Online arrangement.
A good way to catch up on the latest tax compliance changes/updates from the CRA?
If you find all of this a hassle, you should search for accountants near me. Before the CRA redesigned its website and moved to the Government of Canada website, you could find links from home to informational pages about some of the tax breaks and benefits available to specific Canadian businesses, as well as the common situations of individual taxpayers and/or groups’ page. It was a great way to keep up with the latest regulatory changes in these areas. Unfortunately, they are no longer available. Talk to a tax accountant near me and avail tax services near me.