SimpsonWigle Law LLP Tax News

The following article appeared in the latest edition of the HLA Journal.

CRA “requirements” (a “Requirement”) are a form of garnishment for unpaid taxes, and they can be quite troublesome for a business, especially if its systems aren’t what they should be. Businesses are used to acting as tax collectors for the federal and provincial government, of course: businesses withhold and remit amounts from wages and they collect and remit sales taxes. A Requirement, however, applies whenever a business is liable to pay an amount to another person; it is an obligation to act as a tax collector that applies in a broader variet of circumstances, not just when wages are payable, or goods or services are sold. (more…)

The CRA has released the latest edition of its Income Tax Technical News (number 37). This issue is devoted solely to the question of the effect of non-deductible expenses on the calculation of safe income on hand in light of The Queen v. Kruco Inc., 2003 FCA 284.

The Tax Court has said it before, and it will say it again: it has no jurisdiction to hear an appeal from a “nil assessment” (an assessment where no federal taxes are payable) or from an assessment that relates only to Ontario taxes. See Baluyot v. The Queen, 2007 TCC 682. (more…)

As readers of this blog know, Joe Monaco and I prepared a presentation last spring on eligible dividends. “Eligible dividends” are taxable dividends paid by a corporation resident in Canada after 2005 that are received by a person resident in Canada and that are designated as eligible for the purposes of the Income Tax Act (Canada). An individual who receives an eligible dividend is entitled to claim an enhanced dividend tax credit. As a result, the effective tax rate on an eligible dividend for an individual otherwise subject to tax at the highest marginal rate is only about 25%.

What are the corporate procedures that a Canadian-controlled private corporation (a CCPC) should follow to pay and designate an eligible dividend? (more…)