![Grant Gilmour- Canada Revenue Authority Requires Security Deposit For Non- Resident Corporations](https://www.taxconnections.com/taxblog/wp-content/uploads/Grant-Gilmour-Canada-Revenue-Authority-Requires-Security-Deposit-For-Non-Resident-Corporations.jpg?resize=90%2C90&ssl=1)
A non-resident corporation who is registered for GST/HST is required to provide and maintain a security deposit with the Canada Revenue Authority (CRA). However, if under a specified threshold of sales and net tax payable or refundable, a corporation may be exempt.
Discussion
The minimum amount of security is $5,000 CAD, but can be as a high as $1 million CAD. The initial security deposit amount is based on 50% of the estimated net tax for the year. Net tax is calculated using the company’s Canadian net profit (Canadian sales less Canadian expenses) for the year, multiplied by 5% GST rate (or HST if selling in provinces with HST — see International FAQ #39). Then 50% of the net tax amount is your required security deposit.
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