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 […]
Introduction: Understanding Director’s Liability Corporate directors in Canada can be held personally responsible for unpaid GST/HST or payroll remittances owed by their corporations. However, this responsibility is subject to specific legal restrictions. The Canada Revenue Agency (CRA) cannot pursue directors indefinitely or without meeting certain statutory requirements. This article outlines the conditions under which directors […]
Am I Being Taxed or Penalized? Receiving an unexpected assessment from the Canada Revenue Agency (CRA) can feel overwhelming, often leaving taxpayers questioning whether they are being penalized or taxed. While taxes and penalties may seem similar, they serve different purposes and have distinct implications. Understanding these differences is crucial when addressing CRA assessments and […]
It’s Tax Season Again… Why Filing Your Tax Returns Matters Filing a tax return might feel unnecessary, especially if you’re not legally required to file, but avoiding it can lead to significant financial and legal consequences. Here’s a breakdown of why filing your tax returns—on time—is essential for every Canadian taxpayer. The Consequences of Late […]
Introduction: Repeated Failure to File Income Tax Penalty Under Canada’s income tax system, taxpayers are obligated to calculate, report, and pay their taxes by the applicable deadlines. While most Canadians comply with these requirements, some fail to file or pay their taxes on time. To ensure compliance, the Canada Revenue Agency (CRA) enforces penalties, including […]
What is an Income Tax Statute-Barred Period? When taxpayers are initially assessed for income tax or GST/HST, they receive a Notice of Assessment. If changes are needed to a prior assessment, the CRA issues a Notice of Reassessment, which overrides earlier assessments. Taxpayers can receive multiple Notices of Reassessment for the same tax year or […]
