What are the proposed tax changes on passive investment portfolios held inside a private corporation?
The Canadian government is proposing changes on tax treatment of passive income on investment portfolios held inside a private corporation to neutralize the financial advantages of such holdings. This targets private corporations being used as investment vehicles for retirement. Read More
What is a schedule 20 as part of a T2 corporate tax return?
Schedule 20 is used to calculate an additional tax on non-resident corporations. This tax is called Part 14 or ‘branch’ tax and relates to non-resident corporations that earn income from a business carried on in Canada (see International FAQ #24) and have a permanent establishment in Canada (see FAQ #127). Read More
What are the proposed tax changes on sprinkling income using private corporations?
The Canadian government is proposing restrictions on income sprinkling to family members through dividends and capital gains. This targets private companies using shareholdings or a trust to split income among family members. Read More
As I write this post, my mind goes back to one of my very first posts about U.S. compliance issues. This post was called “What you should consider before contacting a lawyer.” Since that time I have written hundreds of post describing the problems faced by Americans abroad.
More recently
In this first post of this series, I explained the importance of the Canada U.S. tax treaty and how it provides “some protection” to Canadian citizens from U.S. tax debts.
In the second post, I explained some of the characteristics of the OVDP program and how Mr. Dewees got caught in it.
In this post, I am suggesting some possible lessons that can be learned from the story of Donald Dewees. Read More
In an earlier post, I explained why the Canada Revenue Agency assisted the IRS in collecting a penalty on a Canadian resident. The bottom line was that he was presumably NOT a Canadian citizen and therefore did NOT have the benefits of the tax treaty. This post is to explain where the penalty came from in the first place.
It has been widely reported that a U.S. citizen residing in Toronto, Canada since 1971, paid a $133,000 U.S. dollar penalty for failing to file IRS forms disclosing that he was running a business through a Canadian corporation. How did this fly get caught in the spider’s web? Read More
What are the proposed tax changes to private corporations that the Canadian government made in July 2017 and what do these changes mean for my company?
On July 18, 2017, the Canadian government proposed tax changes in an effort to remove tax advantages that small business owners have and address aggressive tax planning strategies involving the use of private corporations. These proposed changes are open for discussion until October 2, 2017, before being formally submitted for legislation. Read More
For many U.S. expats who are delinquent in their expat tax filings, the Streamlined Procedures offer a great solution for catching up with limited or no penalties. Due to the Streamlined program’s qualification requirements, however, American citizens living in Canada, or other countries, who regularly visit the U.S. may find it particularly difficult to participate in the program. Read More
How does PST (Provincial Sales Tax) work and how is it different from GST (Goods and Services Tax)?
PST is a provincially levied retail sales tax that is generally applied to goods or services acquired for personal use in British Columbia, unless there is a specific exemption. GST is a federally levied value added consumption tax that is applied to the supply of most of the goods and services purchased in Canada. Read More
The reality of being a “DUAL” Canada U.S. tax filer is that you are a “DUEL” tax filer
“It’s not the taxes they take from you. It’s that the U.S. tax system leaves you with few opportunities for financial planning.”
I was recently asked “what exactly are the issues facing “Canada U.S. dual tax filers?” This is my attempt to condense this topic into a short answer. There are a number of “obvious issues facing U.S. citizens living in Canada.” There are a number of issues that are less obvious. Read More
What cut-off procedures and controls should I have in place and why are they important for my company?
One of the fundamental accounting concepts is the matching principle (see FAQ #171), expenses must match the related revenue. If a sale is recorded in the fiscal period, the expenses related to that sale should also be recorded in the same fiscal period. Cut-off procedures and controls help to ensure that this matching occurs. Read More
What is a T1134 information return relating to controlled and not-controlled foreign affiliates?
If a Canadian corporation or individual has an interest in a foreign affiliate, whether controlled or not, it will need to complete a T1134 information return. The T1134 information return is broken into two forms, a summary and a supplement. A separate supplement must be filed for each foreign affiliate. Read More
This post is based on (but is NOT identical to) a July 17, 2017 submission in response to Senator Hatch’s request for Feedback on Tax Reform.
Why is the United States imposing an “Exit Tax” on their “non-U.S. pensions” and “non-U.S. assets”? After all, these were earned or accumulated AFTER the person moved from the United States?”
Part A – Why certain aspects of the Exit Tax should be repealed Read More
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