Business Tax


						Business Tax Services: Smartax provides a wide range of business tax compliance services. To learn how Smartax can help your business comply with tax authorities, please select the link below: Corporations HST Returns Investment Income Partnerships Sole Proprietor WSIB returns

					Smartax can assist you in complying with Canadian tax legislation by: Determining your Canadian federal and provincial tax filing obligations. Preparing and filing your Canadian federal and provincial tax returns. Identifying advantageous tax minimization strategies.

Corporate tax compliance can be confusing, stressful and costly. Our goal is to put your mind at ease while saving you money.

A Smartax Professional can assist you with all your corporate income tax compliance needs.

Who has to file a corporate income tax return?

All resident corporations, with the exception of registered charities, must file a corporate income tax return every year, regardless of whether or not taxes are payable.

A non-resident corporation has to file a return if, at any time in the tax year, one of the following situations applied; the corporation carried on business in Canada, the corporation had a taxable capital gain, the corporation disposed of taxable Canadian property.

What has to be filed?
Corporations are generally required to file a corporate income tax return (T2) with the Canada Revenue Agency (CRA). Separate provincial corporate income tax returns are required for each province in which the corporation has a permanent establishment.

When must you file your corporate income tax return?
Your corporate income tax return must be filed no later than 6 months after the end of each tax year. For example, if your year-end was December 31st then your return would be due no later than June 30th.

Why file on time?
Failing to file your return as and when required can result in interest, penalties, and in rare cases imprisonment. The CRA also publishes convictions, which are damaging for you and your businesses reputation.

If you fail to file a return, the penalties (for first-time violators) are 5% of the unpaid taxes, plus 1% for each complete month that the return is late, up to a maximum of 12 months.

When are corporate income tax installments due?
Corporate income taxes are generally due in quarterly installments for eligible Canadian-controlled private corporations when the corporation’s taxes payable in the previous or current year, exceed $3000. The balance of taxes payable are due within two or three months of the corporation’s year-end, depending on the circumstances. Late installments are subject to interest and penalties.

How long does it take for the Canada Revenue Agency to process your return?
The CRA processes approximately 90% of returns within 60 days of being received.

Smartax can assist you in complying with Canadian tax legislation by:

Determining your Canadian federal and provincial tax filing obligations.
Preparing and filing your Canadian federal and provincial tax returns.

Identifying advantageous tax minimization strategies.

What is HST?
Harmonized Sales Tax (commonly referred to as “HST”) is an indirect tax that is applied to most goods and services supplied in Canada.

Do I have to collect HST?
Generally, you will need to register for and collect HST from your customers if you provide more than $30,000 worth of taxable goods and services in a quarter or in four consecutive quarters, or are a taxi or limousine operator. However, if you provide only exempt goods and services you may not need to charge your customers HST. Exempt goods and services generally include:

Used residential housing;

Long-term residential accommodation (of one month or more), and residential condominium fees;

Most health, medical, and dental services performed by licensed physicians or dentists for medical reasons;

Child-care services (daycare services for less than 24 hours a day) for children 14 years old and younger;

Bridge, road, and ferry tolls (ferry tolls are taxed at 0% if the ferry service is to or from a place outside Canada);

Legal aid services;

Many educational services;

Music lessons;

Most services provided by financial institutions, such as arrangements for a loan or mortgage;

Arranging for and issuing insurance policies by insurance companies, agents, and brokers;

Most goods and services provided by charities;

Certain goods and services provided by non-profit organizations, governments, and other public service bodies such as municipal transit services and standard residential services (for example, water distribution).

In addition, if you are providing goods or services that are exported outside of Canada, you may not need to collect HST from your customers.

If you provide a mix of taxable and exempt goods and services, you will be required to register for HST and collect HST for the taxable goods and services and may not be required to collect GST for anything exempt.

Benefits of registering for HST
By registering for HST you are entitled to claim what is called an Input Tax Credit (ITC). An ITC allows you to recover HST that you have paid to vendors for goods and services for your business.

When do I have to file my return?
If you are a small business owner ($500,000 or less in taxable revenues), you are required to file a HST return on an annual basis. You may request to file on a quarterly or monthly basis. This could be beneficial if you have accumulated more Input Tax Credits than HST.

If your business has annual taxable revenue of more than $500,000 and less than $6,000,000 you are required to file a return on a quarterly basis. However, if you generate more than $6,000,000 you are required to file a return on a monthly basis.

If you operate as a charity, you may report annually regardless of taxable revenues.

When is my HST return due?
If you are an annual reporter, you have to file your return within three months after the end of the fiscal year. Otherwise, it is due within one month from the end of the reporting period. Payment, if any, is due together with your filing.

How can Smartax assist in complying with HST legislation:

Assessing HST filing, collection and remittance obligations
Preparing HST returns

When to file?
If you make certain payments to a resident of Canada, including dividends, interest, royalties, and other income, you may have to file an investment income information return (T5).

What to file?
When required to file a Investment income return you should file a T5 Summary with the related T5 slips with the Canada Revenue Agency (CRA) and a second copy of the T5 slips would be distributed to the recipient of the payment.

T5 information return due dates?
Investment income information returns are due before March 1 following the calendar year in which the information relates. If you terminate your business activities then your T5 information return is due within 30 days after the date the business was terminated.

T5 slips also have to be delivered to the recipients on or before the day you are required to file the investment income information return.

Why file on time?

The Canada Revenue Agency can assess a penalty of $25 per day with a minimum and maximum penalty of $100 and $2,500 respectively for filing a investment income information return late.

Interest may also apply on unpaid amounts from the day the amount was due at the prescribed rate, which is determined on a quarterly basis by the Canada Revenue Agency.

How can Smartax help?

Smartax can assist you in complying with Canadian tax legislation by:

Determining your Canadian federal tax filing obligations.
Preparing and filing your Canadian federal investment income information returns.
Identifying advantageous tax minimization strategies.

With evolving tax legislation, partnership returns can be complex. Hiring a competent tax professional with an attention to detail is critical. Errors and omissions can cost you interest, penalties and the reputation of your business.

A Smartax Professional can advise you of your filing obligations and can assist you with the preparation of your partnership’s information return.

What is a partnership?
A partnership is generally a type of business entity in which partners share the profits or losses of the business undertaking. Partners can consist of, but are not limited to, individuals, corporations and trusts.

Who has to file a Partnership Information Return (PIR)?
A partnership information return is generally required by the CRA when there are 6 partners at any point during the fiscal year, or one or more of its partners is in another partnership.

Voluntarily filing a partnership information return, even when not required, can be beneficial because it can ensure that the partnership’s taxation year becomes statue barred within the normal reassessment period. When a partnership information return is not filed the Canada Revenue Agency can review and re-determine income or loss at any point in the future.

What has to be filed?
A partnership information return generally consists of a complete T5013 Summary with supplementary slips and schedules. Supplementary schedules consist of, but are not limited to, net income or loss for tax purposes, balance sheets, income statements, financial statement notes checklist, and reconciliation of partners’ capital account.

When must a partnership information return be filed?
If all the members of the partnership are individuals throughout the year then the partnership information return is due no later than March 31st following the year-end. If all of the members of the partnership are corporations then the due date is no later than 5 months after the partnership’s fiscal year-end.

Why file on time?
The penalty for not filing a partnership information return on time is $25 per day, for each day it is late, with a minimum penalty of $100 and a maximum penalty of $2500.Various other penalties apply when you fail to file your return as and when required.

Smartax can assist you in complying with Canadian tax legislation by:

Determining your Canadian federal tax filing obligations.
Preparing and filing your Canadian federal information returns.
Identifying advantageous tax minimization strategies.

Business owners who operate an unincorporated business (commonly referred to as “self employed” or “sole proprietors”) or are partners in a partnership that does not file a T5013 report their business income and expenses on their personal tax returns.

What to file?
Business owners (except professionals) report their business activity on T2125 - Statement of Business or Professional Activities.

Filing a Tax Return
See the personal tax section to determine when a return is required.

When do I need to file?
Your personal tax return is due June 15. However, all taxes owed must be paid by April 30.

How can Smartax help you?
Smartax can assist you in complying with Canadian tax legislation by:

Determining your tax filing obligations.
Identifying tax minimization strategies.
Preparing your personal tax return and applicable business income schedules.