Month: June 2020

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Accountant in the Park Accounting Canada Virtual Accounting Firm Incorporate Sherwood Park Accountants Other Accounting Services Payroll Accounting services in Edmonton Alberta Professional Tax Accounting Services Edmonton & Sherwood Park Alberta Small Business Accounting and Taxes Services in Edmonton Alberta Tax Tax Accountant Sherwood Park Tax Preparation Sherwood Park YEG ACCOUNTANT

Virtual Accounting Firm

Virtual Accounting Firm located in Edmonton:

 Personal Tax

At BOMCAS Top Accounting Firm Edmonton our tax experts are dedicated to remaining current with the constantly changing Canadian tax laws. We take the time to understand the unique situation of each of our clients in our service areas of Sherwood Park, Edmonton and surrounding communities, and ensure they are following the latest Canadian tax laws, while paying the least amount of tax possible.

  • Individual Canadian Tax Return Preparation and filing
  • Personal Tax Planning
  • Immigration and Emigration Tax Planning
  • T3 – Trust Income and Information Return
  • Final Income Tax Returns for Deceased Taxpayers
  • Estate Planning
  • Voluntary Disclosures for unreported income or information forms not filed

Virtual Accounting Firm in Edmonton:

 Corporate Tax

At BOMCAS Top Accounting Firm Edmonton we bring our tax accountant expertise to assist both domestic and multi-national corporations with services that include, but are not limited to:

  • Corporate income tax preparation and filing of returns
  • GST/HST compliance
  • Financial statement preparation
  • Tax dispute resolution consultations
  • Assistance with design & implementation of international tax programs
  • Payroll planning and remittance – domestic and cross-border
  • Tax treaty review

Bookkeeping

We provide continuing bookkeeping maintenance in the background while you focus on your core business operations which helps making us into the top accounting in firm in the region.  As experienced bookkeeping and tax professionals, we’ll help you with all the data entry and bank reconciliations that are required, all on a remote basis. Contact us today and see how we can help you.

Payroll

Our bookkeeping advisers provide Canadian payroll processing services for growing businesses, assisting in government remittances and year end T4 filings. With years of experience, our experts have the knowledge and expertise and qualification needed to handle any situation.

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Accounting Alberta Bookkeeping services Edmonton Alberta Bookkeeping Services Incorporate Sherwood Park Accountants Small Business Accounting and Taxes Services in Edmonton Alberta Tax

Virtual Bookkeeping Business

We provide continuing bookkeeping maintenance in the background while you focus on your core business operations which helps making us into the top accounting in firm in the region.  As experienced bookkeeping and tax professionals, we’ll help you with all the data entry and bank reconciliations that are required, all on a remote basis. Contact us today and see how we can help you.

Contact BOMCAS today and we will be happy to take care of your bookkeeping service virtually. Call 780-953-5250 or email info@bomcas.ca

Eligible capital expenditures – farmers and fishers

You may buy property that has no physical existence, but gives you a lasting economic benefit. Some examples include milk and egg quotas, goodwill, franchises, concessions, or licences for an unlimited time period. This kind of property is eligible capital property. The price you pay to buy this kind of property is an eligible capital expenditure.

As of January 1, 2017, the eligible capital property (ECP) system was replaced with the new capital cost allowance (CCA) class 14.1 with transitional rules. Under the old system, eligible capital expenditures are added to the cumulative eligible capital pool at a 75% inclusion rate, and the rate of depreciation of those expenditures is 7% on a declining-balance basis. Under the new system, newly-acquired eligible properties will be included in class 14.1 at a 100% inclusion rate with a 5% capital cost allowance rate on a declining-balance basis.

Property that was ECP will be depreciable property and expenditures and receipts that were accounted for under the ECP rules will be accounted for under the rules for depreciable property and capital property included in class 14.1.

On this page

Eligible capital expenditure

You may buy property that does not physically exist but gives you a lasting economic benefit.

This kind of property is eligible capital property. The price you pay to buy this type of property is an eligible capital expenditure.

We consider franchises, concessions, or licences with a limited period to be depreciable properties, not eligible capital properties. As of January 1, 2017, the eligible capital property (ECP) system was replaced with the new capital cost allowance (CCA) class 14.1 with transitional rules. For details on depreciable properties, go to Chapter 4 of guide T4002 , Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Annual allowance

You cannot fully deduct an eligible capital expenditure because the expenditure is considered to be capital and provides a lasting economic benefit. However, you can deduct part of its cost each year. We call the amount you can deduct your annual allowance.

CEC account

This is the bookkeeping record you establish to determine your annual allowance. You also use your cumulative eligible capital (CEC) account to keep track of the property you buy and sell. We call the property in your CEC account your eligible capital property. You base your annual allowance on the balance in your account at the end of your fiscal period. Keep a separate account for each business. Include all eligible capital property for the one business in the same CEC account.

Transitional rules – Undepreciated capital cost balance

Generally, the undepreciated capital cost (UCC) of the new class in respect of a business at the beginning of January 1, 2017 is equal to the amount that would have been the cumulative eligible capital (CEC) balance in respect of the business at the beginning of January 1, 2017.

Generally, the total capital cost of all property in Class 14.1 at the beginning of that day is deemed to be 4/3 of the total of the amount that would have been the CEC balance at the beginning of that day and past depreciation claimed that has not been recaptured before that day.

There are also rules for allocating total capital cost between goodwill property and each identifiable property in the new class that was an eligible capital property.

An amount is deemed to have been allowed as capital cost allowance before January 1, 2017, such that the UCC balance at the beginning of January 1, 2017 is equal to the amount that would have been the CEC balance at the beginning of January 1, 2017.

The determination of the total capital cost and the allocation of the capital cost of each property that was an eligible capital property before January 1, 2017 is relevant to the calculation of recaptured capital cost allowance and capital gain in respect of the disposition of such a property on or after January 1, 2017. It is not necessary to determine the total capital cost, or to allocate a capital cost to each property, to determine the amount that may be deducted.

Transitional rules – Deemed gain immediately before January 1, 2017

You may be able to include an amount in your income in a tax year that straddles January 1, 2017. The amount of the income inclusion, if any, is relevant to the calculation of the final CEC balance for the purpose of determining the total capital cost of the class. An income inclusion may be required if you receive proceeds in that tax year and prior to January 1, 2017, such that there would have been an income inclusion if the tax year had instead ended immediately before January 1, 2017. You may choose to have the income inclusion reported as business income or as a taxable capital gain.

An election to defer this income inclusion is available in a manner that is similar to the manner in which income inclusions could be deferred under the ECP rules. Where, on or after January 1, 2017 and in that tax year you acquired a property of the new class or you are deemed to have acquired goodwill, you may elect to reduce the income inclusion by up to half of the capital cost of the new property. In this case, the capital cost of the new property is then reduced by twice the amount by which the income inclusion is reduced.

Transitional rules – Dispositions of former ECP

Receipts related to expenditures incurred before January 1, 2017 cannot result in excess recapture when applied to reduce the balance of the new CCA class. Certain qualifying receipts reduce the UCC of the new CCA class at a 75% rate (the rate at which eligible capital expenditures were added to CEC). Receipts that qualify for the 75% rate are generally receipts from the disposition of a property that was an ECP and receipts that do not represent the proceeds of disposition of property. This is achieved by increasing the UCC of the new class by, generally, 25% of the lesser of the proceeds of disposition and the cost of the property disposed of.

Transitional rules – Non-arm’s length dispositions of former ECP

Although changes to the rules increases the UCC balance of the new class for, generally, 25% of the proceeds of disposition of property that was ECP before January 1, 2017, the new rules also prevent the use of non-arm’s length transfers to increase the amount that can be depreciated in respect of the new class. Generally, when you acquire a property of the new class, only 3/4 of the capital cost of the property is included in the UCC in respect of the class if the following conditions apply:

  • the property or a similar property was previously an eligible capital property of yourself or a person or partnership not dealing at arm’s length with the taxpayer
  • the UCC was increased in respect of an earlier disposition of the property or similar property by yourself or the non-arm’s length person or partnership

This effect is achieved by deeming you to have claimed CCA in respect of the new class equal to the lesser of 1/4 of the cost of the property acquired and the amount that was deemed to have been added to the UCC of the new class of yourself or another person or partnership.

For more information about the old ECP rules, see the 2016 version of this guide.

For more information on changes to the ECP system, go to Explanatory Notes – Eligible Capital Property.

Eligible capital property of a deceased person

When a person dies, we deem that the person has disposed of all capital property right before death. Also, right before death, we deem that the person has received the deemed proceeds of disposition. For more information, go to Deemed disposition of property.

Partnerships

A partnership can own eligible capital property and ask to deduct an annual allowance for that property. Any income from the sale of eligible capital property the partnership owns is income of the partnership. For more information about eligible capital expenditures, go to Chapter 5 of guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Forms and publications

Related links

Original Source: https://www.canada.ca/en/revenue-agency/services/tax/businesses/farmers-fishers/eligible-capital-expenditures-farmers-fishers.html

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Accountant in the Park Accounting Alberta Bookkeeping services Canada Virtual Accounting Firm Edmonton Alberta Bookkeeping Services Incorporate Sherwood Park Accountants Other Accounting Services Small Business Accounting and Taxes Services in Edmonton Alberta Tax Tax Accountant Sherwood Park Tax Preparation Sherwood Park YEG ACCOUNTANT

Virtual Bookkeeping Business & FARMERS AND FISHERS

We provide continuing bookkeeping maintenance in the background while you focus on your core business operations which helps making us into the top accounting in firm in the region.  As experienced bookkeeping and tax professionals, we’ll help you with all the data entry and bank reconciliations that are required, all on a remote basis. Contact us today and see how we can help you.

Contact BOMCAS today and we will be happy to take care of your bookkeeping service virtually. Call 780-953-5250 or email info@bomcas.ca

Eligible capital expenditures – farmers and fishers

You may buy property that has no physical existence, but gives you a lasting economic benefit. Some examples include milk and egg quotas, goodwill, franchises, concessions, or licences for an unlimited time period. This kind of property is eligible capital property. The price you pay to buy this kind of property is an eligible capital expenditure.

As of January 1, 2017, the eligible capital property (ECP) system was replaced with the new capital cost allowance (CCA) class 14.1 with transitional rules. Under the old system, eligible capital expenditures are added to the cumulative eligible capital pool at a 75% inclusion rate, and the rate of depreciation of those expenditures is 7% on a declining-balance basis. Under the new system, newly-acquired eligible properties will be included in class 14.1 at a 100% inclusion rate with a 5% capital cost allowance rate on a declining-balance basis.

Property that was ECP will be depreciable property and expenditures and receipts that were accounted for under the ECP rules will be accounted for under the rules for depreciable property and capital property included in class 14.1.

On this page

Eligible capital expenditure

You may buy property that does not physically exist but gives you a lasting economic benefit.

This kind of property is eligible capital property. The price you pay to buy this type of property is an eligible capital expenditure.

We consider franchises, concessions, or licences with a limited period to be depreciable properties, not eligible capital properties. As of January 1, 2017, the eligible capital property (ECP) system was replaced with the new capital cost allowance (CCA) class 14.1 with transitional rules. For details on depreciable properties, go to Chapter 4 of guide T4002 , Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Annual allowance

You cannot fully deduct an eligible capital expenditure because the expenditure is considered to be capital and provides a lasting economic benefit. However, you can deduct part of its cost each year. We call the amount you can deduct your annual allowance.

CEC account

This is the bookkeeping record you establish to determine your annual allowance. You also use your cumulative eligible capital (CEC) account to keep track of the property you buy and sell. We call the property in your CEC account your eligible capital property. You base your annual allowance on the balance in your account at the end of your fiscal period. Keep a separate account for each business. Include all eligible capital property for the one business in the same CEC account.

Transitional rules – Undepreciated capital cost balance

Generally, the undepreciated capital cost (UCC) of the new class in respect of a business at the beginning of January 1, 2017 is equal to the amount that would have been the cumulative eligible capital (CEC) balance in respect of the business at the beginning of January 1, 2017.

Generally, the total capital cost of all property in Class 14.1 at the beginning of that day is deemed to be 4/3 of the total of the amount that would have been the CEC balance at the beginning of that day and past depreciation claimed that has not been recaptured before that day.

There are also rules for allocating total capital cost between goodwill property and each identifiable property in the new class that was an eligible capital property.

An amount is deemed to have been allowed as capital cost allowance before January 1, 2017, such that the UCC balance at the beginning of January 1, 2017 is equal to the amount that would have been the CEC balance at the beginning of January 1, 2017.

The determination of the total capital cost and the allocation of the capital cost of each property that was an eligible capital property before January 1, 2017 is relevant to the calculation of recaptured capital cost allowance and capital gain in respect of the disposition of such a property on or after January 1, 2017. It is not necessary to determine the total capital cost, or to allocate a capital cost to each property, to determine the amount that may be deducted.

Transitional rules – Deemed gain immediately before January 1, 2017

You may be able to include an amount in your income in a tax year that straddles January 1, 2017. The amount of the income inclusion, if any, is relevant to the calculation of the final CEC balance for the purpose of determining the total capital cost of the class. An income inclusion may be required if you receive proceeds in that tax year and prior to January 1, 2017, such that there would have been an income inclusion if the tax year had instead ended immediately before January 1, 2017. You may choose to have the income inclusion reported as business income or as a taxable capital gain.

An election to defer this income inclusion is available in a manner that is similar to the manner in which income inclusions could be deferred under the ECP rules. Where, on or after January 1, 2017 and in that tax year you acquired a property of the new class or you are deemed to have acquired goodwill, you may elect to reduce the income inclusion by up to half of the capital cost of the new property. In this case, the capital cost of the new property is then reduced by twice the amount by which the income inclusion is reduced.

Transitional rules – Dispositions of former ECP

Receipts related to expenditures incurred before January 1, 2017 cannot result in excess recapture when applied to reduce the balance of the new CCA class. Certain qualifying receipts reduce the UCC of the new CCA class at a 75% rate (the rate at which eligible capital expenditures were added to CEC). Receipts that qualify for the 75% rate are generally receipts from the disposition of a property that was an ECP and receipts that do not represent the proceeds of disposition of property. This is achieved by increasing the UCC of the new class by, generally, 25% of the lesser of the proceeds of disposition and the cost of the property disposed of.

Transitional rules – Non-arm’s length dispositions of former ECP

Although changes to the rules increases the UCC balance of the new class for, generally, 25% of the proceeds of disposition of property that was ECP before January 1, 2017, the new rules also prevent the use of non-arm’s length transfers to increase the amount that can be depreciated in respect of the new class. Generally, when you acquire a property of the new class, only 3/4 of the capital cost of the property is included in the UCC in respect of the class if the following conditions apply:

  • the property or a similar property was previously an eligible capital property of yourself or a person or partnership not dealing at arm’s length with the taxpayer
  • the UCC was increased in respect of an earlier disposition of the property or similar property by yourself or the non-arm’s length person or partnership

This effect is achieved by deeming you to have claimed CCA in respect of the new class equal to the lesser of 1/4 of the cost of the property acquired and the amount that was deemed to have been added to the UCC of the new class of yourself or another person or partnership.

For more information about the old ECP rules, see the 2016 version of this guide.

For more information on changes to the ECP system, go to Explanatory Notes – Eligible Capital Property.

Eligible capital property of a deceased person

When a person dies, we deem that the person has disposed of all capital property right before death. Also, right before death, we deem that the person has received the deemed proceeds of disposition. For more information, go to Deemed disposition of property.

Partnerships

A partnership can own eligible capital property and ask to deduct an annual allowance for that property. Any income from the sale of eligible capital property the partnership owns is income of the partnership. For more information about eligible capital expenditures, go to Chapter 5 of guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Forms and publications

Related links

Original Source: https://www.canada.ca/en/revenue-agency/services/tax/businesses/farmers-fishers/eligible-capital-expenditures-farmers-fishers.html

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Accounting Alberta Bookkeeping services Edmonton Alberta Bookkeeping Services Incorporate Sherwood Park Accountants Small Business Accounting and Taxes Services in Edmonton Alberta Tax

Bookkeeping

We provide continuing bookkeeping maintenance in the background while you focus on your core business operations which helps making us into the top accounting in firm in the region.  As experienced bookkeeping and tax professionals, we’ll help you with all the data entry and bank reconciliations that are required, all on a remote basis. Contact us today and see how we can help you.

Contact us today we will be happy to help. Phone: 780-953-5250, or email info@bomcas.ca

Methods of calculating deductions – CPP, EI, and income tax

CPP and EI

Income tax

You can use our Payroll Deductions Online Calculator (PDOC) to calculate payroll deductions for all provinces and territories except Quebec. It calculates payroll deductions for the most common pay periods (such as weekly or biweekly), based on exact salary figures.

The Payroll Deductions Tables help you calculate the Canada Pension Plan (CPP) contributions, employment insurance (EI) premiums, and the amount of federal, provincial (except Quebec), and territorial income tax that you have to deduct from amounts you pay each pay period.

Note

A pay period means the period for which you pay earnings or other remuneration to an employee.

Before you decide which method to use, read Which provincial or territorial tax tables should you use?.

There are numerous versions of the Payroll Deductions Tables to help you calculate CPP contributions, EI premiums, and the amount of federal, provincial (except Quebec), and territorial income tax that you have to deduct.

Note

If the computer formulas you want to use are different from ours, you have to submit them to any tax service office or tax centre for approval.

CPP and EI

You can use the manual calculation for CPP and the manual calculation for EI to calculate the deductions.

Important notice

The Department of Finance Canada has implemented legislation that will change the CPP. There will be a gradual 7 year phase in beginning in 2019. For more information, go to their website.

Caution for employers using software programs, in-house payroll programs, and bookkeeping methods

For Canada Pension Plan (CPP) purposes, contributions are not calculated from the first dollar of pensionable earnings. Instead, they are calculated using the amount of pensionable earnings minus a basic exemption amount that is based on the period of employment.

If used improperly, some payroll software programs, in-house payroll programs, and bookkeeping methods can calculate unwarranted or incorrect refunds of CPP contributions for both employees and employers. The improper calculations treat all employment as if it were full-year employment, which incorrectly reduces both the employee’s and employer’s contributions.

For example, when a part-year employee does not qualify for the full annual exemption, a program may indicate that the employer should report a CPP overdeduction in box 22 – Income tax deducted of the T4 slip. This may result in an unwarranted refund of tax to the employee when the employee files his or her income tax and benefit return.

When employees receive refunds for CPP overdeductions, their pensionable service is adversely affected. This could affect their CPP income when they retire. In addition, employers who report such overdeductions receive a credit they are not entitled to because the employee worked for them for less than 12 months.

Income tax

As an employer or payer, you are responsible for deducting income tax from the remuneration or other income you pay. There is no age limit for deducting income tax and there is no employer contribution required.

We have forms to help you determine how much income tax to deduct: 

  • Most employees and recipients fill out Form TD1. There are two types of form TD1 – federal and provincial or territorial. Both forms, once completed, are used to determine the amount of federal and provincial or territorial tax to deduct from the income an individual receives in a year.
  • Employees who are paid commissions and who claim expenses may choose to fill out Form TD1X, in addition to Form TD1.
  • Fishers fill out Form TD3F.

As an employer, you may create a federal and/or provincial or territorial Form TD1 and have your employee send it to you electronically rather than send you the actual completed Form TD1. For more information, go to Electronic Form TD1.

Once completed, the TD1 will provide the employees’ or the recipients’ total claim amount. Use this amount to determine the claim code to use to determine the amount of tax to deduct. Claim codes are listed in each version of the payroll deductions tables.

You can use the manual calculation for income tax to calculate the deductions.

Also, if you pay bonuses and retroactive pay increases, or you pay employees who earn commissions (without expenses) periodically, use the bonus method.

If an employee states that his or her total expected income from all sources will be less than the total amount claimed, do not deduct any federal, provincial, or territorial tax. However, if you know this statement is false, you have to deduct tax on the amounts you pay. If you need advice, call 1-800-959-5525.

Employment in Quebec

Individuals who work or receive other income (such as pension income) in the province of Quebec have to fill out a federal Form TD1, Personal Tax Credits Return, and a provincial Form TP-1015.3-V, Source Deductions Return.

Individuals who incur expenses related to earning commissions have to fill out a federal Form TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions, and provincial Form TP-1015.R.13.1-V, Statement of Commissions and Expenses for Source Deduction Purposes.

You can get Quebec forms from Revenu Québec.

Online calculators

Forms and publications

Related topics

Original Source: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/methods-calculating-deductions-cpp-ei-income-tax.html

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Accountant in the Park Accounting Canada Virtual Accounting Firm Incorporate Sherwood Park Accountants Other Accounting Services Payroll Accounting services in Alberta Personal Income Tax Return Accountant Edmonton Alberta Small Business Accounting and Taxes Services in Edmonton Alberta Tax Tax Accountant Sherwood Park Tax Preparation Sherwood Park YEG ACCOUNTANT

Understanding Alberta Personal Tax Credits Return: A Comprehensive Guide

Filing taxes can be a complex process, but it’s an essential aspect of financial responsibility. In Alberta, Canada, taxpayers have the opportunity to maximize their financial returns through various tax credits. One such credit is the Alberta Personal Tax Credits Return. In this article, we’ll delve into the intricacies of the Alberta Personal Tax Credits Return, helping you understand its importance, eligibility criteria, and how to make the most of it.

What is the Alberta Personal Tax Credits Return?

The Alberta Personal Tax Credits Return is a form that allows taxpayers to claim tax credits that may reduce the amount of tax deducted from their paychecks throughout the year. This form essentially helps individuals ensure that the right amount of tax is withheld from their earnings, preventing under or overpayment of taxes.

Eligibility Criteria

To be eligible for the Alberta Personal Tax Credits Return, you must meet the following criteria:

  1. Residency: You must be a resident of Alberta.
  2. Employment Status: You must be employed or receiving income that is subject to withholding tax.
  3. Income Level: Your total income and deductions must not exceed certain thresholds outlined by the Canada Revenue Agency (CRA).

Key Tax Credits

  1. Basic Personal Amount: This is a non-refundable tax credit that all taxpayers can claim. It allows you to earn a certain amount of income each year without paying federal or provincial income tax on it.
  2. Spousal Amount: If you support your spouse or common-law partner, you may be eligible to claim this credit.
  3. Equivalent to Spouse: If you support a dependent relative other than your spouse or common-law partner, you might qualify for this credit.
  4. Child Amount: Parents can claim this credit for each eligible child under the age of 18.
  5. Medical Expenses: Certain medical expenses can be claimed, such as prescription medications and medical supplies not covered by insurance.

Advantages of Claiming Alberta Personal Tax Credits

  1. Increased Take-Home Pay: By accurately claiming your tax credits, you can reduce the amount of tax withheld from your paycheck, leading to higher take-home pay throughout the year.
  2. Preventing Overpayment: Filling out the Alberta Personal Tax Credits Return accurately can prevent you from overpaying taxes and waiting for a refund during tax season.
  3. Financial Planning: Claiming the right tax credits can positively impact your financial planning and help you manage your monthly budget more effectively.

Filling Out the Form

  1. Download the Form: Obtain the Alberta Personal Tax Credits Return form from the CRA website or your employer’s payroll department.
  2. Provide Accurate Information: Fill out the form accurately, providing details such as your name, social insurance number, and the number of eligible dependents.
  3. Calculate Credits: Follow the instructions on the form to calculate the appropriate tax credits based on your situation.

Conclusion

The Alberta Personal Tax Credits Return offers taxpayers the opportunity to optimize their finances by ensuring the correct amount of tax is withheld from their income. By understanding the eligibility criteria and the various tax credits available, you can make informed decisions to enhance your take-home pay and manage your tax obligations efficiently. Remember that while this article provides general information, it’s always advisable to consult a tax professional for personalized guidance related to your specific financial situation.

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5009-C AB428 – Alberta Tax and Credits

For best results, download and open this form in Adobe Reader. See General information for details.

You can view this form in:

For people with visual impairments, the following alternate formats are also available:

Last update: 2020-03-05

Previous-year versions are also available.

While all Canada Revenue Agency web content is accessible, we also provide our forms and publications in alternate formats (digital audio, electronic text, Braille, and large print) to allow persons with disabilities to access the information they need.

Original Source: https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/alberta/5009-c.html

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Accounting Incorporate Sherwood Park Accountants Small Business Accounting and Taxes Services in Edmonton Alberta Tax

Incorporate your business

If you want to incorporate your business provincially or territorially, contact the incorporating authority that applies to you. If you want to incorporate your business federally, visit Innovation, Science and Economic Development Canada.

When you incorporate with the province of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Saskatchewan, Prince Edward Island, or with Innovation, Science and Economic Development Canada, your business will automatically be assigned a Business Number (BN) and a corporation income tax program account.

When you incorporate with any other province or territory, you will have to register for a BN and corporation income tax program account by contacting the Canada Revenue Agency (CRA). For more information, go to How to register for a BN or CRA Program Accounts.

Information you need to register for a corporation income tax program account

You must have all of the following on hand:

  • corporation name
  • certificate number
  • date of incorporation
  • jurisdiction

After you register for a corporation income tax program account

If you incorporate online using the Business Registration Online (BRO) service or by phone you will receive your BN right away, online.

If you incorporate by submitting form RC1, Request for a business number and certain program accounts, or with the province of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Saskatchewan, Prince Edward Island, or with Innovation, Science and Economic Development Canada, you should receive a notice confirming your nine-digit BN and a summary of your CRA program accounts by mail.

Your corporation income tax program account will include the letters RC and a four digit reference number. For example:

  • Business number:
    • 123456789
  • Corporation income tax program account:
    • 123456789 RC 0001

If you need your BN before you receive the confirmation notice, call us at 1-800-959-5525. Have a copy of your certificate of incorporation on hand, because we may ask you for it.

Non-resident corporations that register for a BN with the CRA will also be registered with a corporation income tax program account.

For more information, go to Corporations.

Corporate income tax obligations

Corporations have to meet certain obligations, such as:

  • reporting all income and expenses
  • notifying the CRA when there is a change of directors 

Corporate filing and timelines 

If your business is federally, provincially, or territorially incorporated, or if you are a non-resident corporation operating in Canada, you have to file Form T2, Corporation Income Tax Return. Corporations that we consider to be registered charities are the only exception. For more information on corporate filing, see the topics at Corporation income tax return.

As a corporation, you have special filing requirements. For information on when you must file your Corporation income tax return, go to When to file your corporation income tax return.

Generally, corporations have to pay their taxes in monthly instalment payments or quarterly instalment payments. For more information go to Corporation payments. 

Liabilities and responsibilities

When a corporation fails to deduct, withhold, remit, or pay amounts held in trust for the Receiver General for Canada, the directors of the corporation may be held personally responsible, along with the corporation, to pay the amount owing. This amount includes penalties and interest.

However, if the directors take action to ensure the corporation makes the necessary deductions or remittances, we will not hold the directors personally responsible.

Forms and publications

Report a problem or mistake on this pageShare this page

Original source: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/registering-your-business/corporation-income-tax-program-account.html

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Record keeping requirements for accountants

June 2017

This guidance on record keeping is applicable to accountants and accounting firms that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations.

As an accountant or accounting firm, you have record keeping obligations when you engage in any of the following activities on behalf of any individual or entity (other than your employer), or give instructions for the following activities on behalf of any individual or entity (other than your employer):

  • receiving or paying funds;
  • purchasing or selling securities, real estate, business assets or entities; and
  • transferring funds or securities by any means.

In order to comply with your record keeping requirements, you are required to keep records in a manner in which they can be provided to FINTRAC within 30 days upon request. These records may also be requested through a judicial order by law enforcement to support an investigation of money laundering or terrorist activity financing. A record (or a copy) may be kept in a machine-readable or electronic form, so long as a paper copy can easily be produced.

Employees who keep records for you are not required to keep them after the end of their employment with you. The same is true for individuals in a contractual relationship with you, after the end of that contractual relationship. This means that you have to obtain and keep the records that were kept for you by any employee or contractor before the end of that individual’s employment or contract with you.

There may be situations where you are required to keep records for purposes other than your requirements under the PCMLTFA. For example, a federal or provincial regulator for your sector may require you to keep records in addition to those described in this guidance. If this is the case, you must still meet the requirements described in this guidance. For example, the retention period for your records can be longer than what is described, but it cannot be shorter.

Please note that as an accountant or accounting firm, you have record keeping requirements in addition to those included in this guidance. These additional requirements are detailed in the following Know your client guidance documents:

As an accountant or accounting firm, you must keep the following records:

  1. Suspicious transaction report records
  2. Large cash transaction records
  3. Receipt of funds records
  4. Reasonable measures records

**Note: Exceptions to your record keeping requirements are listed in the last section of this guidance.

**Note: When recording the nature of the principal business or occupation of a client, you must be as descriptive as possible in order to be able to determine whether a transaction or activity is consistent with what would be expected for that client. For example, in the case of a person who is a manager, the occupation recorded should reflect the area of management, such as “hotel reservations manager” or “retail clothing store manager.” The same is true when recording the nature of the principal business of an entity. For example, in the case of an entity in the field of sales, the nature of the principal business should specify the type of sales, such as “pharmaceutical sales” or “retail sales”.

1. Suspicious transaction report records

If you submit a suspicious transaction report to FINTRAC, you must keep a copy of it. This includes STRs for completed and attempted transactions.

Retention: You must keep an STR for at least five years from the date the report was submitted.

2. Large cash transaction records

You must keep a record of every large cash transaction. A large cash transaction occurs when you receive $10,000 or more in cash from a client in a single transaction. A large cash transaction also occurs when there are multiple cash transactions of less than $10,000 each that total $10,000 or more within a 24-hour period, when you know they are conducted by, or on behalf of, the same individual or entity.

When a client conducts a large cash transaction, your record must indicate the receipt of an amount of $10,000 or more in cash, along with the following:

  • the name, date of birth and address of the individual from whom you received the cash, and the nature of their principal business or occupation;
  • the amount and currency of the cash received;
  • the date of the transaction;
  • the purpose and details of the transaction, including:
    • the type of transaction (for example, the cash was to be transferred on the client’s behalf, etc.); and
    • whether any other individuals or entities were involved in the transaction;
  • how the cash was received (for example, in person, by mail, by armoured car, or any other way); and
  • if an account was affected by the transaction, include:
    • the account number and type of account;
    • the full name of the account holder; and
    • the currency in which the account’s transactions are conducted.

Retention: You must keep large cash transaction records for at least five years from the date the record was created.

3. Receipt of funds records

When you receive funds (in cash or in another form) in the amount of $3,000 or more in the course of a single transaction, you must record:

  • the name, date of birth and address of the individual who provided the funds, as well as the nature of their principal business or occupation;
  • the name, address and nature of their principal business if the funds are received from an entity;
  • the amount and currency of the funds received;
  • the date of the transaction;
  • the purpose and details of the transaction:
    • the type and form of the transaction (for example, the cash was for you to transfer on your client’s behalf, etc.); and
    • whether any other individuals or entities were involved in the transaction;
  • if the funds were received in cash, how the cash was received (for example, in person, by mail, by armoured car, or any other way); and
  • if an account was affected by the transaction (i.e. funds withdrawn from or deposited to an account), include:
    • the account number and type of account;
    • the full name of the account holder; and
    • the currency in which the transaction was conducted.

If the receipt of funds record is about a client that is a corporation, you must also keep a copy of the part of the official corporate records that contains any provision relating to the power to bind the corporation regarding the transaction. Official records can include a certificate of incumbency, the articles of incorporation or the bylaws of the corporation that set out the officers duly authorized to sign on the behalf of the corporation, such as the president, treasurer, vice-president, comptroller, etc.

If there were changes subsequent to the articles or bylaws that related to the power to bind the corporation regarding the transaction, and these changes were applicable at the time the transaction was conducted, then the board resolution stating the change would be included in this type of record.

Retention: You must keep a receipt of funds record for transactions of $3,000 or more for at least five years from the date the record was created.

4. Reasonable measures records

The term “reasonable measures” refers to activities you are expected to undertake in order to meet certain obligations. The PCMLTFA and associated Regulations explicitly state when you must take reasonable measures to meet an obligation.

As of June 17, 2017, the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations have been changed to require that a record be kept when reasonable measures were taken, but were unsuccessful. A reasonable measure is unsuccessful when you do not obtain a response, such as a yes or no, and you are unable to make a conclusive determination. Refer to section 67.3 of the Regulations for every activity where you are required to keep records when reasonable measures were unsuccessful.

When reasonable measures are unsuccessful, you must record the following information:

  • the measures taken;
  • the date on which each measure was taken; and
  • the reasons why the measures were unsuccessful.

You must outline the reasonable measures that you take in your compliance policies and procedures. This can form part of your unsuccessful reasonable measures record, or you could document, on a case-by-case basis, the measure taken in each record for unsuccessful reasonable measures.

For example, if you ask a client if they are conducting a large cash transaction on behalf of a third party and they refuse to answer your record should indicate that you asked, the date you asked and the fact that the client refused to answer yes or no.

Should you take a measure that is not included in your policies and procedures, you would have to include details of that measure taken in your record of unsuccessful reasonable measures.

Retention: You must keep records of your unsuccessful reasonable measures for at least five years following the date they were created.

Exceptions to record keeping requirements

If you are required to keep a record about information that is readily available in other records that you have kept, you do not have to record the same information again. This means that if you keep the required information and can produce it during a FINTRAC examination you do not need to create a new record to meet your obligations.

You are not required to keep a receipt of funds record if the funds are received from a public body or very large corporation. The exception also applies for a subsidiary for either of those entities, if the financial statements of the subsidiary are consolidated with those of the public body or very large corporation.

You are not required to keep a large cash transaction record if the cash is received from a financial entity or a public body.

You are not required to keep a receipt of funds record if the funds are received from a financial entity or a public body.

You are not required to keep a receipt of funds record if you must keep a large cash transaction record for the same transaction.

You are not required to keep records when you undertake other accounting activities such as audits, review or compilation engagements.

Original Source: https://www.fintrac-canafe.gc.ca/guidance-directives/recordkeeping-document/record/acc-eng

Categories
Accounting Tax

Accountants

Accountants and accounting firms must fulfill specific obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations to help combat money laundering and terrorist financing in Canada. This means that you have obligations if you are a chartered accountant, a certified general accountant or a certified management accountant. You also have obligations if you are an accounting firm which is defined as an entity engaged in the business of providing accounting services to the public that has at least one partner, employee or administrator that is an accountant.

Accountants and accounting firms are subject to the PCMLTFA when they engage in any of the following activities on behalf of any individual or entity, or give instructions on behalf of any individual or entity in respect of:

  • receiving or paying funds;
  • purchasing or selling securities, real properties or business assets or entities; or
  • transferring funds or securities by any means.

You are subject to the requirements described further below when you engage in these activities, regardless of whether you receive fees or have a formal letter of engagement to do so. In other words, even if you carry out these activities on a voluntary basis, you are subject to the requirements of the PCMLTFA.

If you are paid for your accounting services, the receipt of the professional fees does not trigger associated obligations under the PCMLTFA.

When you give instructions for any of the triggering activities, it means that you actually direct the movement of funds. By contrast, when you provide advice to your clients, it means that you make recommendations or suggestions to them. Providing advice is not considered to be giving instructions.

  • Example of giving instructions: “Based on my client’s instructions, I request that you transfer $15,000 from my client’s account, account number XXX, to account number YYY at Bank X in Country Z.”
  • Example of providing advice: “For tax purposes, we recommend that you transfer your money into a certain investment vehicle.”

If you are an employee of an accountant or accounting firm, the requirements described further below are the responsibility of your employer, except with respect to reporting suspicious transactions and terrorist property, which is applicable to both you and the employer.

Accountants and accounting firms are responsible for providing FINTRAC with certain transaction reports, for implementing a compliance program and for keeping records that may be required for law enforcement investigations. Their obligations under the PCMLTFA and associated Regulations are described below.

Compliance program

A comprehensive and effective compliance program is the basis of meeting all of your obligations under the PCMLTFA and associated Regulations. During a FINTRAC examination, it is important to demonstrate that the required documentation is in place and that employees, agents, and all others authorized to act on your behalf are well trained and can effectively implement all the elements of your compliance program. A senior officer must approve the compliance program and the compliance officer must have the necessary authority to carry out the requirements of the program. You must:

  • Appoint a compliance officer responsible for the implementation and oversight of the compliance program;
  • Develop and apply written compliance policies and procedures that are kept up to date and approved by a senior officer;
  • Apply and document a risk assessment, including mitigation measures and strategies;
  • Develop and maintain a written training program for employees, agents, and others authorized to act on your behalf; and
  • Review your compliance program (policies and procedures, risk assessment and training program) every two years for the purpose of testing its effectiveness.

See Compliance program requirements, the Risk-based approach guide and the Risk-based approach workbook for accountants for more information on these obligations.

Know your client

As an accountant or accounting firm, you must verify the identity of clients for certain activities and transactions according to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR).  Part of knowing your client includes following the methods to identify clients, as well as conducting certain additional activities as listed below:  

Reporting

Accountants and accounting firms are required to complete reports about certain transactions and property and submit them to FINTRAC. Financial transaction reports are critical to FINTRAC’s ability to analyze transactions in order to develop financial intelligence that is disclosed to law enforcement and partner agencies. Therefore, the quality of your reporting will be reviewed by FINTRAC in examinations.

Suspicious transactions: Within 30 days of determining that there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering or terrorist financing offence, you must submit a suspicious transaction report (STR). The following STR guidance pieces explain how to identify and report STRs and all three should be read together. See What is a suspicious transaction report?, Reporting suspicious transactions to FINTRAC and Money laundering and terrorist financing indicators – Accountants.

Terrorist property:  When you know that property in your possession or under your control is owned, controlled by or on behalf of a terrorist or a terrorist group, you must submit a report without delay. You must also submit a report to the Royal Canadian Mounted Police (RCMP) and the Canadian Security Intelligence Service (CSIS). See Guideline 5: Submitting Terrorist Property Reports.

Large cash transactions:  When you receive $10,000 CAD or more in cash (including taxes or other fees) either in a single transaction or in multiple transactions within a 24-hour period, you must submit a report within 15 calendar days. See Guideline 7A: Submitting Large Cash Transaction Reports to FINTRAC electronically and Guideline 7B: Submitting Large Cash Transaction Reports to FINTRAC by paper.

If you have a computer and an internet connection, you must submit all reports to FINTRAC electronically, except Terrorist Property reports, which can only be submitted on paper.

Record keeping

You are responsible for keeping certain transaction and client identification records. These records are to be kept in such a way that they can be provided to FINTRAC within 30 days if required to do so. See Record keeping for accountants for details.

Penalties for non-compliance

Non-compliance with Part 1 or 1.1 of the PCMLTFA may result in criminal or administrative monetary penalties.

Original Source: https://www.fintrac-canafe.gc.ca/re-ed/accts-eng