Federal Corporate Archives

CRA promotes tax relief for businesses

The Canada Revenue Agency (CRA) has announced the launch of the Government of Canada's advertising campaign promoting the 100% capital cost allowance rate for computers.

According to this announcement Canadian business owners now have until January 31, 2011, to acquire new eligible computer hardware, including systems software, in order to claim 100% of the capital cost allowance.

This temporary tax relief measure was previously announced in Canada's Economic Action Plan. It allows Canadian businesses to claim a 100% capital cost allowance deduction for eligible computer hardware, including systems software, acquired after January 27, 2009, and before midnight, January 31, 2011.

For more information on tax relief for businesses, please see the CRA website at: www.cra.gc.ca/taxcuts

New filing requirements for partnerships

According to the Canada Revenue Agency, starting in 2011 the requirement related to the number of partners in a partnership will be replaced with a new requirement based on financial activity and the requirement to file based on the types of partners will be revised. The new requirements apply to all partnerships for fiscal periods ending in 2011 and later.

In 1989, a regulation was added to the Canadian Income Tax Regulations requiring all partnerships to file an annual information return. Under certain conditions, the CRA has exempted partnerships with fewer than six partners from filing. However, over the last 20 years, the Canadian economy and business landscape have evolved, showing that business activity and assets held by a partnership, as well as the complexity of a partnership's structure, are more significant for tax matters than the number of partners.

Along with the changes to the filing requirements, the CRA will introduce a revised information return and tax guide for partnerships in 2011. For more information, go to www.cra.gc.ca/partnership.

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Scientific Research and Experimental Development: Changes

The following news release regarding Scientific Research and Experimental Development (SR&ED) is available on the Canada Revenue Agency web site.

"Changes will be made to improve the program," declares Minister Blackburn

Hamilton, Ontario, January 13, 2010... Today, while addressing the 13th Annual Tax Practitioner Information Session, the Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture and Agri-Food), announced improvements to the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program.

"Our Government understands the importance of research and innovation to our country's present and future economic prosperity. By offering generous investment tax credits, we are encouraging Canadian corporations to invest in innovation and to develop new products, services, and technologies," said Minister Blackburn.

"I am pleased to announce that the Canada Revenue Agency (CRA) will soon be implementing a number of improvements to the program. This July, the CRA will begin to report quarterly, through its Web site, on the time it takes to review an SR&ED claim from start to finish. It will improve on accuracy and on the mutual goal of achieving the timely resolution of a claim," indicated Minister Blackburn.

"CRA officials will also spend more time better explaining the SR&ED program requirements, process, and decisions to the claimants and their representatives. The emphasis on working with claimants is reflected in the new manual, which will become effective on April 1, 2010.

In addition, I am pleased to announce that when, in the course of their review, CRA officials discover that a company has not claimed work that appears to be eligible for the credit, they will now inform the claimant of their finding so that companies can resubmit their claim if within the reporting deadline. This is also reflected in the SR&ED claim review manual and will be effective as of April 1, 2010.

The issue of consistency in our decisions has often been raised by claimants and tax practitioners. I want to assure you that I have listened carefully to these concerns, and I have asked CRA officials to continue working in this area and to propose additional solutions. I will be soon be announcing further enhancements to the SR&ED program as a result," added Minister Blackburn.

The Government of Canada is building on its tradition of excellence through the SR&ED program. By investing in research and development, we are creating a stronger economy, future job opportunities, and a better quality of life for all Canadians.

The program is the largest single source of federal government support for industrial research and development. It encourages businesses to conduct research and development that may lead to new, improved, or technologically advanced processes or products. The program represents approximately 4 billion dollars distributed annually to over 18,000 Canadian businesses.

Mandatory T2 electronic filing coming soon!

The following tax tip is available on the Canada Revenue Agency web site.

Did you know…

For tax years ending after 2009, it will be mandatory for corporations with gross revenues exceeding $1 million to file their T2 corporation returns via the Internet. It is important to note that penalties will be applied to tax years ending after 2010 if you do not file your T2 corporation return using the Internet.

Corporations with gross revenues of less than $1 million are strongly encouraged to submit their corporation returns electronically, even if it is not mandatory. Corporations filing over the Internet can benefit from fewer delays, elimination of traditional delivery expenses, reduction of printing costs, and immediate confirmation of filing.

Canada Revenue Agency invites you to submit your corporation return using the Internet filing option available in Canada Revenue Agency-certified software packages. For more information on Internet filing for corporation returns, go to www.cra.gc.ca/corporation-internet.

You can view the status of your return through My Business Account. This service provides secure access 21 hours a day and also allows you to transfer payments within an account, view account balances and transactions, authorize a representative to access your account information, and more. Find out more at www.cra.gc.ca/mybusinessaccount.

Think green, act green!

This and other CRA tax tips are available on the Agency web site at:
http://www.cra-arc.gc.ca/nwsrm/txtps/2009/tt091110-eng.html

CRA Tax tip: Self-correct misallocated payments

The following tax tip is available on the Canada Revenue Agency Web Site:

Did you know...

You can use My Business Account to transfer payments and credits within your goods and services tax/harmonized sales tax (GST/HST), corporation income tax, excise tax, excise duty, excise tax on insurance premiums, air travellers security charge, and softwood lumber products export charge accounts? "Transfer Payment" allows you to transfer amounts from one interim period to another or pay an amount owing.

If you have an amount available for transfer, you can select the "Transfer Payment" option under "Account balance and activities," submit and confirm the transfer details, and see the updated account balance and interest amounts immediately. If the amount you want to transfer has already been applied to an assessed period, you can request a transfer through My Business Account's "Make online requests" service.

My Business Account provides secure, convenient access to your business accounts seven days a week. Go to www.cra.gc.ca/mybusinessaccount and see what other services may be useful to you.

Think green, act green!

For more information on this or other CRA Tax Tips, visit:
http://www.cra-arc.gc.ca/nwsrm/txtps/2009/tt091013-eng.html

CRA Tax Tip: GST/HST tax filing: quick and easy

The following tax tip is available from the CRA web site:

Did you know... That you can file your goods and services tax/harmonized sales tax (GST/HST) return electronically from your home or office?

Eligible registrants can use the access code from their personalized return to file returns with an amount owing, a nil balance, or a refund of $10,000 or less using GST/HST NETFILE, GST/HST TELEFILE, or My Business Account.

When you file electronically, do not mail a copy of your return to the Canada Revenue Agency. If you need to pay a balance owing, use your financial institution's Internet or telephone banking service or Form RC158, GST/HST Netfile/Telefile Remittance Voucher, to make your payment.

If you are filing on paper, be sure to include your Business Number and reporting period dates to ensure quick processing of your return. When filing on paper, do not use Form RC158 to make your payment.
For more information on filing your GST/HST return electronically, go to www.cra.gc.ca/gsthst-filing. To access My Business Account, go to www.cra.gc.ca/mybusinessaccount.

CRA News Release: CRA succeeds in reducing the Paperwork Burden for Businesses

According to a news release available on the Canada Revenue Agency web site, the CRA is making it easier on business by reducing paperwork burden on busineses.

In 2007, the Government announced the 20 percent Paperwork Burden Reduction Initiative as part of a coordinated plan across the federal government. Through this initiative, the CRA has identified over 8,000 obsolete or non-essential information obligations imposed on business. The elimination of these obligations, when implemented, will reduce the paperwork burden on business by 24.2 percent.

The CRA has committed to making it easier to do business by reducing the frequency of tax remittance and filing requirements and by allowing Ontario corporate taxpayers to file harmonized federal and provincial corporation tax returns. As part of this continued commitment, CRA introduced My Business Account to allow business owners secure and convenient online access to their accounts, and developed indicators to measure the small business compliance burden.

Through its own burden reduction measures and in support of the Paper Burden Reduction Initiative, the CRA continues to liaise with key stakeholders to continue to find innovative ways of making complying with Income‑ and Excise‑related legislation easier for businesses.

For more information on this news release, please see:
http://www.cra-arc.gc.ca/nwsrm/rlss/2009/m03/nr090331-eng.html

CRA Tax tip: T4 filing - think green, act green

The following tax tip is available from the Canada Revenue Agency and is available in full on the CRA web site.

Did you know…

That you can file your T4 information return electronically from the convenience of your computer?

Be part of the paperless filing solution and eliminate the need to send paper copies of your T4 slips and summary to the Canada Revenue Agency (CRA). File online and receive electronic confirmation that your return has been received by the CRA, and save on printing and mailing costs.

For more information, see:
http://www.cra-arc.gc.ca/nwsrm/txtps/2009/tt090130-eng.html

International Financial Reporting Standards (IFRS)

The use of International Financial Reporting Standards (IFRS) will be required in 2011 for Canadian enterprises including public companies and other profit-orientated enterprises responsible to large or diverse groups of shareholders.

International Financial Reporting Standards are a series of standards and interpretations that have been adopted by the International Accounting Standards Board (IASB). Many of these standards that form FRS are known by the older name of International Accounting Standards (IAS) that were issued between 1973 and 2001 by the board of the International Accounting Standards Committee (IASC).

International Financial Reporting Standards comprise:

- International Financial Reporting Standards (IFRS) - standards issued after 2001
- International Accounting Standards (IAS) - standards issued before 2001
- Interpretations originated from the International Financial Reporting Interpretations Committee (IFRIC) - issued after 2001
- Standing Interpretations Committee (SIC) - issued before 2001

There is also a Framework for the Preparation and Presentation of Financial Statements which describes some of the principles underlying IFRS. The objective of financial statements is to provide information about the financial position, performance and changes in an enterprise, useful to a wide range of users in making economic decisions and to provide the current financial status of the entity to its shareholders and the general public.

For more information, see the IAS web site at http://www.iasb.org

Tax Alert: Tax cheating software?

The Canada Revenue Agency has released a Tax Alert warning businesses against using tax cheating software.

According to the CRA, electronic sales suppression software is currently being marketed and sold to Canadian businesses allowing business to hide income and evade taxes. CRA reminds Canadian businesses that tax evasion is against the law and could result in severe penalties.

"Electronic sales suppression software is designed to work with point-of-sale systems and electronic cash registers. Businesses use the software to delete a portion of sales from their computer records to evade payment of income and sales taxes. In some cases, restaurant owners who suppressed sales using this software have collected taxes from patrons and not remitted them to the CRA as required by law.

The CRA has over 5,000 employees dedicated to finding unreported business income and ensuring that the proper amount of taxes is paid, even when sales records are missing.

The CRA is working to identify those who develop, sell, or use the software. Businesses that have used electronic sales suppression software are suspected of having hidden thousands of transactions and millions of dollars in sales. Once caught, these tax cheaters will face penalties, court fines, and possibly even jail. They will also have to pay the taxes they tried to evade, plus interest.

Although customers may not notice if a business is using electronic sales suppression software, they can do their part to ensure tax compliance by always requesting a copy of their receipt. Businesses which evade taxes are placing an unfair burden on the individuals and other businesses that accurately report their income and pay the taxes they owe."

For more information on this CRA Tax Alert, please see:
http://www.cra-arc.gc.ca/nwsrm/lrts/2008/l081210-eng.html

Tax Tip: Change in Directors for a Corporation

The following tax tip is available on the Canada Revenue Agency Web site...

Did you know...

That you should notify the Canada Revenue Agency (CRA) when directors of your corporation change?

Avoid the possibility of service delays by ensuring that information on the incoming directors is added to our system and information on the outgoing directors is removed. Once the information has been updated, the new directors will be able to speak with CRA agents on the phone and submit written requests, such as Form RC59, Business Consent Form, on behalf of their corporation. Directors can also have online access to their business's tax information through My Business Account at www.cra.gc.ca/mybusinessaccount. For a director to have online access, our system must contain his or her social insurance number.

You can send a copy of official documentation showing the change of directors by fax or by mail to your tax services office. Examples of acceptable documentation include official notification from the incorporating body, minutes of the Board of Directors' resolution approving the change, a certificate of incumbency with an impression of the corporate seal, among others. If we need additional information before updating our system, we will contact you.

for more information on this or other CRA tax tips, please visit the CRA web site at:
http://www.cra-arc.gc.ca/nwsrm/txtps/2008/tt081125-eng.html

CRA Tax Tip: More services to simplify your business taxes

The following tax tip is provided by the Canada Revenue Agency:

Did you know...

That you now have additional options to help manage your business taxes through our My Business Account service?

Business owners can now use this secure online service to:

check the status of goods and services tax/harmonized sales tax (GST/HST)* returns and see when Notices of Assessment were issued; and
access a variety of business tax information and services, including account balances and activities.

Starting in November 2008, you will be able to transfer payments and credits within your GST/HST,* corporation income tax, or other levies account. This service will allow you to transfer amounts not yet applied to an assessed period and view the results immediately, including updated interest amounts and account balances. If the amount you wish to transfer has already been applied to an assessed period, you can request a transfer through our Make online requests service in My Business Account.

Business owners can authorize their employees and representatives to view or change their tax information online. Once authorized, the employees and representatives would access the services through Represent a client at www.cra.gc.ca/representatives.

For more information on this tax tip and others, visit the CRA web site at:
http://www.cra-arc.gc.ca/nwsrm/txtps/2008/tt081022-eng.html

CRA Tax Tip:T2 filing made easy

The following Tax Tip is available on the Canada Revenue Agency web site:

Did you know…

That you can file corporation income tax returns electronically from your desktop computer? The benefits of using the Corporation Internet Filing service include receiving an immediate confirmation of receipt and faster processing and refunds. Join us in creating a sustainable environmental footprint by reducing our paper consumption.

Tax professionals can use their EFILE number and password to file eligible corporation income tax returns on behalf of their clients. Need to pay a balance owing? Many businesses find it convenient to use their financial institution's Internet or telephone banking service.

For more information about this tax tip and filing your corporate tax return, please visit the CRA web site at:
http://www.cra-arc.gc.ca/newsroom/taxtips/2008/tt080610-e.html

CRA Tax Tip: Apprenticeship job creation tax credit

Did you know...

That businesses with an eligible apprentice may be able to claim the apprenticeship job creation tax credit? This is a non-refundable tax credit equal to 10% of the eligible salaries and wages payable to eligible apprentices for employment after May 1, 2006. The maximum credit is $2,000 per year for each eligible apprentice.

For more information about the credit, visit cra.gc.ca/individuals and select "A" from the drop-down menu for "Apprenticeship job creation tax credit."

For more information on this or other CRA Tax Tips, see:
http://www.cra-arc.gc.ca/newsroom/taxtips/2008/tt080128a-e.html

AGREEMENT REACHED FOR HARMONIZATION OF ONTARIO CORPORATIONS TAX WITH FEDERAL REGIME

The following news release is avaialable on the Canada Revenue Agency web site:

HUMAN RESOURCES AGREEMENT REACHED FOR HARMONIZATION OF ONTARIO CORPORATIONS TAX WITH FEDERAL REGIME Streamlining will save Ontario businesses up to $190 million a year

Ottawa, Ontario, July 31, 2007…The Canada Revenue Agency (CRA) and the Ontario Ministry of Revenue have signed a Human Resources Agreement that represents a significant step in the move to federal administration of Ontario's corporate taxes.

The agreement outlines employment opportunities at the CRA for Ontario staff currently involved in corporation tax audit, appeals and advisory roles, and describes how the two organizations will manage the movement of employees who accept job offers from the CRA. It provides for these employees to begin working at the Agency on April 3, 2008.

“In Budget 2007, the Government of Canada made a commitment to reduce the federal paper burden and tax compliance costs for small businesses,” said the Honourable Carol Skelton, Minister of National Revenue. “Single administration of Ontario's corporate tax will reduce the compliance burden on the province's businesses by an estimated $100 million a year in administrative costs alone.”

“Ontario's business community will begin to experience the tangible benefits of CRA administration in February of 2008, when they start to remit single instalment payments to the Agency,” added Minister Skelton. “The hiring of the Ontario employees at the CRA means that corporations will see integrated audit and objections processes in April of next year. The single return will follow in 2009 for tax years ending after December 31, 2008.”

“This is a good deal for Ontario and it protects Ontario revenues,” said Ontario Minister of Revenue Michael Chan. “This agreement recognizes that Ontario's corporate tax professionals are skilled and experienced and the CRA has recognized their value.”

“This agreement also demonstrates the ongoing commitment to the partnership between our province and the federal government,” added Minister Chan. “The streamlining of tax administration will improve efficiency and help businesses free up resources that can be invested in new jobs and help build a stronger, more productive economy for all Ontarians.”

The single administration of Ontario's corporate tax by the CRA will lead to one set of rules, one form, one audit, one appeals process and one point of contact. For tax years ending after December 31, 2008, businesses will also save $90 million a year in lower Ontario corporate income taxes as a result of harmonization with the federal corporate income tax base.

For more information, see:
http://www.cra-arc.gc.ca/newsroom/releases/2007/july/nr070731-e.html

CRA Tax tip: Apprenticeship job creation tax credit

The Canada Revenue Agency (CRA) has issued a tax tip pertaining to a tax credit for apprenticeship job creation:

"Did you know...

That businesses with an eligible apprentice may be able to claim the apprenticeship job creation tax credit? This is a non-refundable tax credit equal to 10% of the eligible salaries and wages payable to eligible apprentices for employment after May 1, 2006. The maximum credit is $2,000 per year for each eligible apprentice."

For more information on this or other Canadian tax tips, visit the CRA web site at:
http://www.cra-arc.gc.ca/newsroom/taxtips/2007/tt070201b-e.html

CRA SERIOUS ABOUT COMPLIANCE

The Canada Revenue Agency (CRA) has release a news release in response to allegations that it treats some taxpayers unfairly.

"The Income Tax Act requires employers whose monthly source deduction remittances exceed $50,000 make their payments at a financial institution by the business day they are due. This is to ensure that the payments are immediately credited to the Government of Canada. Some employers have been making their remittances directly to the CRA, with the result that the deposit was often delayed until the next business day, which might occur two or even three days later. Playing the system this way, while advantageous to some employers, was unfair to all other taxpayers."

The CRA has indicated that it has clearly advised nearly 57,000 large employers of the penalty where large employers continue to make late remittances. The penalty represents 10 per cent of the amount of the payment.

"Suggesting that such penalties are unfair is in fact suggesting that the CRA not apply the provisions of the Income Tax Act. This would have the effect of giving a small number of businesses what amounts to unfair financial advantages."

The news release continues that the CRA remains committed to equal treatment of all taxpayers and will impose penalties where warranted.

For more information on this news release, visit the CRA website at: http://www.cra-arc.gc.ca/newsroom/releases/2006/nov/nr061124-e.html

CRA Fact Sheet: CRA & 2D Bar Coding

Now available on the Canada Revenue Agency website:

In October 2006, the Canada Revenue Agency (CRA) will introduce two-dimensional (2D) bar codes for T2 returns, which will be used to process computer-generated paper returns filed by corporations. The 2D bar code technology is presently being used for T1 Individual returns and has proven to be highly effective.

For more information please see the CRA website at:
http://www.cra-arc.gc.ca/newsroom/factsheets/2006/sept/fs060925-e.html

CRA Fact Sheet: My Business Account

Now on the Canada Revenue Agency website:

"The Canada Revenue Agency (CRA) has expanded its suite of e-services to provide business owners with convenient and secure on-line access to their personalized business account information through a new on-line service called My Business Account."

For more information see the full fact sheet at:
http://www.cra-arc.gc.ca/newsroom/factsheets/2006/sept/fs060925b-e.html

THE SR&ED PROGRAM

The Scientific Research and Experimental Development (SR&ED) program is a federal tax incentive program to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada. The program has been designed to encourage the development of new, improved, or technologically advanced products or processes by Canadians and Canadian businesses.

According to the CRA web site, the SR&ED program is the largest single source of federal government support for industrial research and development in Canada. You may be eligible to apply for SR&ED investment tax credits for expenditures such as wages, materials, machinery, equipment, some overhead, and SR&ED contracts.

For more information on the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program, including eligibility and the application process, see the CRA web site at:
http://www.cra-arc.gc.ca/taxcredit/sred/menu-e.html

CRA Extended Hours for Business Support

The Canada Revenue Agency has indicated that they will be providing extended service on its business enquiries telephone lines to include two Saturdays, February 19, and 26, 2005, from 10:00 a.m. to 4:00 p.m. (local time).

While the business enquiry telephone service operates year round, the extended service is intended to assist employers who may need help preparing T4 slips for employees.

More information can be found on the CRA site at:
http://www.cra-arc.gc.ca/newsroom/releases/2005/feb/0218saturday-e.html