Introduction – Managing Tax Audits for Business Expenses For small businesses, maintaining organized books and records is crucial for withstanding scrutiny during a CRA tax audit. However, the realities of running a business often mean that documenting every legitimate business expense takes a backseat to day-to-day operations. Unfortunately, this can create significant issues, as CRA […]

Introduction When taxpayers cannot settle their tax assessments within a reasonable timeframe, the Canada Revenue Agency (CRA) employs various tools to collect tax debts, including garnishments. Known as “Requirements to Pay” (RTPs), these garnishments enable the CRA to demand payments from third parties holding or owing funds to the tax debtor. Essentially, RTPs allow the […]

Introduction Directors of Canadian corporations can be held personally liable for specific tax debts of the corporation, including GST/HST remittance arrears under the Excise Tax Act and payroll remittance arrears under the Income Tax Act. However, there are critical safeguards in place, such as a two-year limitation period and requirements for due diligence.  This article […]

Introduction Businesses providing goods and services in exchange for money or other valuable consideration are required to charge their customers GST/HST. When businesses collect  GST/HST, they must hold it in trust for the government of Canada. Taxpayers with annual  revenues exceeding $30,000 must register for a GST/HST number, collect GST/HST, file regular  GST/HST returns with […]

Introduction – Payroll Tax Withholding Obligations Canadian employers who pay salaries, wages, or other types of remuneration to employees must withhold or deduct amounts as specified by the regulations under the Canadian Income Tax Act. These deductions typically cover personal income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. Employers are responsible […]

Introduction – Payroll Tax Remittance Obligations Canadian employers paying salaries, wages, or most other types of remuneration to employees are legally required to withhold or deduct amounts from each payment. These amounts typically cover income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums.  The employer must remit these withheld amounts to the […]

Introduction Tax instalment payments are quarterly payments made to the Canada Revenue Agency (CRA) in advance of filing a tax return. Most individuals meet their tax obligations through payroll deductions, where taxes are withheld by employers. However, for those with little or no tax withheld at the source—such as self-employed individuals, investors, or those with […]

Introduction to Business Tax Audits Business tax audits are a crucial mechanism used by the Canada Revenue Agency (CRA) to ensure compliance with tax obligations related to income tax, payroll deductions, benefits, remittances, and GST/HST under the Income Tax Act and the Excise Tax Act. During a tax audit, the CRA examines a business’s financial […]

Introduction – Indirect Tax Audit Methods Canada’s tax system is built on self-reporting, where taxpayers—be they individuals, corporations, or trusts—are required to file annual income tax returns and regular GST/HST returns. While the Canada Revenue Agency (CRA) generally assesses taxpayers based on the submitted returns, some cases warrant further scrutiny through audits. Audits typically involve […]