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Should I Charge GST/HST on My Remote Work?

By |2022-11-17T04:41:56+00:00November 17th, 2022|Accounting, Taxes|

We work with a lot of consultants, and we find this question coming up a lot: “Do I need to charge GST/HST on the services I perform for clients in another country?” Usually, they are referring to clients in the US. The simple answer is no! Place of Supply In Canada, the Canada Revenue Agency (CRA) deems the place of supply for services to be the location where your client is based. This holds true even if you perform the work remotely from your office in Canada. However, there are some exemptions to the place of supply rules. Whether the exceptions [...]

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Alberta’s Interactive Digital Media Tax Credit

By |2022-10-27T19:03:38+00:00October 27th, 2022|Taxes, Technology|

The Alberta Interactive Digital Media Tax Credit (IDMTC) is for eligible registered IDM corporations that develop interactive digital media credit products in Alberta after April 1, 2018. The credit is calculated at 25% of eligible salary and wages incurred in the tax year and is FULLY refundable. That means you are required to first apply it to income taxes payable but if you clear that balance you will still get the amount of the credit as a refund! Eligible corporations that hire under-represented populations may qualify for an additional 5% through the Diversity and Inclusion program component. Here is an example, [...]

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BC’s Interactive Digital Media Tax Credit

By |2022-10-27T18:39:16+00:00October 27th, 2022|Taxes, Technology|

The Interactive Digital Media Tax Credit (IDTMC) is for eligible registered corporations that develop interactive digital media credit products in B.C. after August 31, 2010, and before September 1, 2023 (CURRENT deadline). The credit is calculated at 17.5% of eligible salary and wages incurred in the tax year and is FULLY refundable. That means you are required to first apply it to income taxes payable but if you clear that balance you will still get the amount of the credit as a refund! Here is an example, if you have $200,000 in eligible salaries and wages, you may be entitled to [...]

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Dividends or Wages: Which is Better?

By |2022-09-12T03:40:04+00:00September 12th, 2022|Accounting, Taxes|

Did you know the tax treatment of dividends and shareholder wages differs? In Canada, dividends are considered investment income, whereas wages are employment income and subject to payroll taxes. There are advantages and disadvantages to both. In this blog post, we'll explore the differences between dividends and wages, and help you decide which is better for you. Dividends are payments made to shareholders of a company out of its profits. The amount you receive depends on the number of shares you own. Wages, as you are probably already aware, are payments made to employees for their work. As a shareholder, you [...]

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What are Eligible and Non-Eligible Dividends?

By |2022-08-28T23:27:10+00:00August 29th, 2022|Accounting, Taxes|

When it comes to dividends, there are two main types: eligible and non-eligible. Eligible dividends are those that meet specific criteria in the Canadian Income Tax Act (ITA). To the contrary, non-eligible dividends do not meet those criteria. This can be confusing for business owners and investors. Let's take a closer look at what makes a dividend eligible or not. Eligible Dividends Eligible dividends are paid by a corporation to its shareholders from its "general rate income pool" (GRIP). To be considered part of the GRIP, earnings must come from business activities in Canada. Usually these dividends are paid by public [...]

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The Tax Consequences of Passive Income in a Canadian Corporation

By |2022-08-21T19:40:22+00:00August 22nd, 2022|Taxes|

Do you have passive income in your Canadian corporation? If so, you need to be aware that it is taxed differently than active business income. Income from investments and property can impact your small business deduction. This, in turn, impacts the amount of tax you pay in your corporation. In this post, you'll learn what passive income is and the impact it has on the small business deduction. What is passive income? Passive income is any type of income that is not earned from active work. This includes, but is not limited to, income from property, such as rental income and [...]

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What is a Shareholder Loan?

By |2022-08-20T22:36:18+00:00August 15th, 2022|Accounting, Taxes|

If you have a company, you may have heard the term shareholder loan. You may even know the current balance of what your company owes you. If you have no idea what a shareholder loan is or whether you have one, that’s okay. In this post, we’ll explain what a shareholder loan is and why the money you withdraw from it isn’t always tax free. What is a shareholder loan? A shareholder loan is, simply put, a loan that a shareholder makes to their corporation. The Canada Revenue Agency (CRA) doesn’t consider this money as income for the corporation, so there’s [...]

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The Best Year End Date for Your Canadian Corporation: Why December Isn’t the Best Choice

By |2022-07-23T20:06:22+00:00July 12th, 2022|Accounting, Business, Taxes|

When it comes to choosing a year end date for your Canadian corporation, there are a few things you need to take into account. Many business owners choose December 31st as their year end date. They think it will be convenient because it is the end of the calendar year, but this isn't always the best choice when it comes to tax planning. Continue reading to learn what you should consider when choosing a year end date for your corporation. The Best Year End for Tax Planning In Canada, your year end date is set when you file your first corporate [...]

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Complete Your Sales Tax Returns Using Xero Reports and Never Miss a Deadline Again

By |2022-08-16T15:45:05+00:00May 31st, 2022|Taxes, Xero|

Do you dread completing your sales tax returns every month? Are you unsure where to find the information you need? If you use Xero, you can save yourself the headache. You can use Xero’s sales tax reports to quickly and easily complete your tax returns. All that’s left after that is making sure you file them before the deadline. With so many compatible integrations, Xero can help with deadlines too. Continue reading to learn how to complete your sales tax returns with Xero reports and get them filed before the deadline.  Which sales tax returns can I complete using Xero reports? [...]

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What is SRED and How Do I Track It?

By |2022-05-06T18:04:34+00:00April 27th, 2022|Taxes|

Have you ever heard the term SRED and wondered what it was all about? The Canadian government provides tax-reducing incentives to companies conducting qualifying Scientific Research and Experimental Development (SRED) work. It is important to understand the various tax credits available to support SRED work, so that you may take advantage of them. These tax credits are often overlooked. Businesses don’t know they exist or they don’t realize they qualify for them. The Canada Revenue Agency (CRA) has made a number of changes in recent years. One of these changes was to the SRED program. The SRED program allows businesses to [...]

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