Paper file taxes canada

According to the CRA, individuals who normally, customarily, or routinely live in another country, and are not considered a resident of Canada, may be classified as non-residents. Ultimately, only the CRA can determine your residency status. There are no strict rules; just guidelines and interpretations by the agency regarding your residency. If you are classified as a non-resident of Canada, you are only obligated to pay tax on income you receive from sources in Canada. To ensure that the correct portion of tax is deducted by your Canadian payers — people, employers or other entities who pay you money — you should notify them that you are a non-resident of Canada for tax purposes , as well as your country of residence.

This allows the payers to deduct the Part XIII tax when income is paid to you, usually at a rate of 25 percent unless there is a tax treaty between Canada and your country of residence. These amounts are non-refundable, and you do not have to file a Canadian tax return to report the income unless you choose to. The CRA has recently published guidance on its existing process for requesting a remission review, including information on:. In Technical Interpretation I, the CRA was asked whether the owner of a qualifying property that operates a hotel, or other similar business, would be considered to use its qualifying property primarily to earn rental income and therefore not eligible to claim the CERS for that qualifying property.

While a question of fact, the CRA provides some helpful guidance. The CRA indicates that generally, any income earned from the use or occupation of a property is considered to be rental income.

However, where an entity also provides significant additional services that are integral to the success of its ordinary activities, it is the CRA's position that the operation of that entity would be earning income from the services provided instead of rental income. The CRA indicates that whether a particular payment for insurance made by an eligible entity in respect of a qualifying period is qualifying rent expense depends on the terms of the relevant insurance contract.

Generally, if the insurance is on the qualifying property, then the amount paid for the insurance should be part of qualifying rent expense. In contrast, if the insurance is for content or personal property, then the amount paid for the insurance should not be included in qualifying rent expense. The CRA has recently released guidance on how authorized representatives can make a bulk request for the cancellation of penalties and interest on behalf of multiple taxpayers, for which the request for relief have common reasons or similar facts.

When submitting a bulk request, representatives should ensure the following:. The original release caused a significant amount of confusion and many questioned whether Finance Canada could change the coming into force date of the bill. Confirmation was provided that the bill is the law, and it currently applies as passed by Parliament. Finance Canada believes that the bill allows for surplus stripping as it could apply where there is no genuine intention to transfer ownership of the business and as such, compromises the integrity of the tax system.

In particular, reference is made to converting dividends into capital gains which are taxed at a lower rate. The same risk presumably applies to gains eligible for the capital gains exemption although that is not discussed specifically.

Further draft legislation will be released which will contain more rigorous rules that will deal with issues such as whether the new owners are active in the business. The final legislation will apply as of the later of either November 1, or the date of publication of the final draft legislation.

The purpose of this study is to evaluate the web content, as well as the online calculator used in the CRHP application process. The study takes approximately 45 minutes. You can submit your questions on Slido enter code until Sunday, July 11, Bill C sought to eliminate this inequity.

As the bill was considered by Parliament, the Department of Finance Canada expressed concerns that the draft changes could allow for inappropriate surplus stripping. Due to this, on June 30, Finance Canada announced that:. The CRA indicated, however, that after the registration is complete, a representative will have to provide proper authorization for any further communication with the CRA.

Of note, the CRA has announced that the simplified registration site will open on June 21, Two recently published technical interpretations, I7 and I7, deal with whether various mandated closures would qualify for lockdown support. The scenarios presented to the CRA were:. Of particular note, the CRA indicates that in determining whether a public health restriction requires that some or all of the activities of the eligible entity at the qualifying property are required to cease i.

The CRA also notes that for a particular order to meet the conditions of a public health restriction under subsection The CRA indicates that the entity may have some flexibility in the method it can use to satisfy this condition, provided that it is appropriate for those particular circumstances. Thus, in the case of a travel agency, if, prior to the closure, clients made in-person visits to the office to arrange travel bookings and in-person visits ceased upon closure of the office as the result of an order or decision, then those activities could be considered restricted activities and this condition could be satisfied.

The fact that employees started working from home and started making travel bookings over the phone once the office closed would not preclude this condition from being met. The CRA applies this same rationale for the closed store in the shopping mall but still providing curbside pickup or delivery for its customers i. For the food court restaurant, where the public seating areas for customers of the restaurant are required to be closed, the CRA indicates that the "sit-down dining" activities could be considered restricted activities, and the fact that take-out service may continue would not preclude the restaurants from having restricted activities related to "sit-down dining".

It is not clear to us how the 25 per cent of revenues condition noted above would be documented in this situation. Finally, the CRA re-confirms that for the condition that the restricted activities are required to cease for a period of at least one week, there is no requirement this must be within a particular qualifying period. As noted in our earlier post, the CRA recommends that affected corporations should file their federal and provincial claim forms without taking into account the federal COVID extension.

Of note, the table in section A. The CRA has reconfirmed that these due dates still apply. The CRA recommends that such taxpayers should file their federal and provincial claim forms without taking into account the federal COVID extension. We understand that the CRA will be publishing guidance on this issue on their website shortly and we have suggested that they confirm the due dates that apply in each province or territory. On June 2, the Government of Canada released backgrounders providing details on the Canada Recovery Hiring Program , as well as on the extension and changes to the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy programs as announced in the federal budget.

It appears that the details contained in the backgrounders are consistent with what was in the budget documents. In CRA technical interpretation I7 E , the CRA was asked to comment on whether certain amounts paid or credited by an eligible entity to an eligible employee, who is an owner-manager, are considered eligible remuneration for purposes of CEWS in a number of different scenarios. The CRA confirmed that salary and wages paid to an owner-manager retroactively in respect of a week during a qualifying period can generally be considered eligible remuneration for purposes of the CEWS to the extent that the eligible remuneration reflects the actual amount paid in respect of the particular claim period.

Finally, if the corporation pays the salaries and wages to an owner-manager which are then immediately returned to the eligible employer as either a shareholder loan or capital contribution, the amounts will not qualify as eligible remuneration for purposes of the CEWS. The CRA indicated that since the Act calculates the subsidy amount for an eligible employee in respect of a week in the qualifying period, the qualifying entity has discretion to claim a lesser amount in its application by excluding any employees from the CEWS calculation under the Act.

Technical interpretation I7 E deals with whether a boat slip is considered real or immovable property such that rental expenses for the boat slip qualify for CERS. The CRA provides general comments and indicates that the taxpayer should look to common law principles or the Civil Code of Quebec if the property was located in Quebec to determine whether a particular property, such as a boat slip, would be considered real or immovable property.

On May 26, the CRA published guidance that could help your clients determine whether they have been contacted by a legitimate CRA agent.

See our April 14, posting for further details on the issue with the calculator. The CERS webpage now clarifies that if a lockdown period is one week or longer, a business may qualify for lockdown support even if the minimum lockdown period of one week overlaps two different claim periods. The CRA notes that if the CERS calculator was used on or before May 20, , it may not have accurately calculated lockdown support if the lockdown period overlapped two or more claim periods.

The CRA concludes that while the legal title of a property may be relevant in determining whether a particular property is a qualifying property, it is not necessarily the case that a qualifying property of an eligible entity will always conform to its legal title.

As such, a single legal title may, depending on the circumstances, contain more than one qualifying property. Similarly, a particular property may be a "qualifying property" for more than one eligible entity. However, in some situations, a particular property may include a portion that is subject to the SCDE exclusion in the definition of qualifying property.

In such a case, the fact that a part of a property is excluded may not, depending on the circumstances, preclude the remaining part of the property from being a qualifying property. The CRA provides that since the "chair rent" is rent for the use of, or right to use, an area within the salon that is real or immovable property such that it is capable of being a qualifying property, it may be a qualifying rent expense for the stylist, provided all of the conditions in the definition of qualifying rent expense are met.

The CRA notes that this is a question of fact that must be determined by considering all of the circumstances of a particular situation, including the particular written agreement between the stylist and the landlord. Technical Interpretation I7 E deals with whether amounts received by an eligible entity from a business interruption insurance policy is included in an entity's qualifying revenue for purposes of the CEWS. The CRA indicates that since an entity would typically acquire business interruption insurance to replace lost revenue when the entity is unable to carry on its ordinary activities, insurance proceeds would generally be included in qualifying revenue and would not be considered an extraordinary item.

The CRA wass also asked where such insurance proceeds are included in revenue in a prior period, and are based on a gross revenue benchmark less cost of sales, whether an eligible entity can determine their qualifying revenue for the particular prior reference period based on the insurance proceeds plus a notional amount to represent what their revenue would have been during this period had they been able to operate. The CRA indicates that, since only amounts resulting in an inflow of cash, receivables or other consideration are included in qualifying revenue, therefore, an eligible entity would not be able to gross up their qualifying revenue by a notional amount.

To help affected businesses prepare for their new compliance obligations, the CRA has launched a new webpage which includes a questionnaire to help businesses determine if they need to register under the new regime, as well as instructions and examples. The federal government had announced in the federal budget that the CRA will work closely with businesses to assist them in meeting their obligations.

The CRA notes on their webpage that where the affected businesses and platform operators show that they have taken reasonable measures but are unable to meet their new obligations for operational reasons, the CRA will take a practical approach to compliance and exercise discretion in administering these measures during a month transition period, starting July 1, Issues discussed with the CRA include the following:.

We recommended that the CRA provide clear guidance on situations where relief will be provided for late-filed T1 returns through the Taxpayer Relief Program. Also, the process for requesting relief should be as simple as possible on the assumption that the number of requests for relief will be larger than normal. Some specific suggestions include:. We asked the CRA to keep in mind that many incomplete T1 returns may have been filed since no extension was allowed and that it should expect that it will take more time to finalize these returns through T1 adjustments.

Consequently, the workloads of many firms remain high. With this in mind, we asked the CRA to delay verification work until after June 30 where possible. On corporate tax returns, the province of Quebec has announced that relief similar to that provided to individuals is not planned and we assume the same will be true federally for T2 returns.

Since relief for corporations will likely need to come through the Taxpayer Relief Program, we will discuss how this program will be administered for late-filed corporate tax returns with the CRA. Finance Canada has recently updated their website to include the explanatory notes for the proposals included in Bill C which includes certain Budget measures and other previously announced measures. On April 30, , the federal government introduced Bill C , an Act to implement certain provisions of the budget tabled in Parliament on April 19, , and other measures.

As mentioned in our previous post, this bill contains some of the measures introduced in the federal budget, as well as some other previously announced measures. It also includes a number of other previously announced measures, such as:.

For further details, please see the NWMM. The questions have been reviewed and the CRA has provided responses to us which we are able to share. It is unclear at this time whether these questions and answers will be posted on the CRA website. It has come to our attention that there is an inconsistency in the way the CERS calculator is computing lockdown support amounts. In particular, the issue of concern arises when a lockdown period spans two qualifying periods. While not totally clear, our interpretation is that the one-week period does not have to be fully within the qualifying period for which a claim is being made.

Accordingly, a one-week period that straddles the end of one qualifying period and the beginning of another may still satisfy the requirement and a claim can be made in both periods. The CRA has confirmed with us that this is also their interpretation. Unfortunately, the CERS calculator currently does not reflect this interpretation.

Currently, the calculator only allows a lockdown support amount where the lockdown period within the claim period is at least seven days.

The CRA is aware of this inconsistency and has indicated they will be updating the calculator to address this situation shortly. The CRA confirmed that an eligible entity would have to calculate its revenue reduction for both subsidies using the same rules i.

The CRA provided an example where Corporation A and Corporation B, both eligible entities, are members of an affiliated group and have jointly elected that the qualifying revenue of the affiliated group be determined on a consolidated basis under paragraph Since Corporation A and Corporation B have jointly elected that the qualifying revenue of the affiliated group be determined on a consolidated basis for that qualifying period, the consolidated amount must be used as the qualifying revenue by Corporation B in determining its revenue reduction for the CERS.

Canada and the U. Business assets acquired during a reference period: In technical interpretation E5 E , the CRA addresses a situation where the business assets are acquired during a reference period and whether a proration is necessary when determining qualifying revenue. Assuming the election under paragraph Also, where both the vendor and the acquirer have eligible remuneration during the current reference period, they can both claim the CEWS if they otherwise qualify.

Eligible remuneration and outsourced staff : In technical interpretation E5 E , the CRA provides guidance on the implications to CEWS in scenarios between an outsource staffing company and their clients. The CRA indicates that generally, a staffing company's staff are employees of the staffing company and not that of its client.

Therefore, a payment made by the client to a staffing company would not be considered eligible remuneration paid to an eligible employee of the client for CEWS purposes. The CRA is also asked to comment on the implications of the situation where the outsource staffing company has received the CEWS and the client receiving the staffing services has received an offsetting discount for the subsidy received.

For the client, the discount offered by the outsource staffing company should not, in and by itself, reduce the amount of its eligible remuneration for the wage subsidy.

The U. The IRS will be providing formal guidance in the coming days. On the personal tax deadline for Canada, we are continuing to discuss the issue with the CRA. In a recent CRA technical interpretation E5 , the CRA provides some guidance on what additional expenses would meet the definition under paragraph The CRA confirms that where a lease is not a net lease, only the gross rent would meet the definition of qualifying rent expense. As a result, the CRA indicates that even if the lease contains a requirement for a tenant to pay for utilities, any payments made by the tenant for utilities will not be a qualifying rent expense.

With respect to net lease arrangements, the definition provides that additional amounts required to be paid under the net lease by the eligible entity may be a qualifying rent expense. For example, if a net lease requires a tenant to pay utilities as part of regular instalments of operating expenses customarily charged to the tenant, the CRA indicates that this payment is a qualifying rent expense.

This article is for sole proprietors only, and exclusively covers federal taxes. As a self-employed person, your business earnings and your personal income are one and the same. The remainder would be taxed at The rate of CPP contributions on your income is 9.

Employees have half that amount withheld from their paycheck, while their employer pays the other half. When you work for someone else, the taxes you pay on your income are withheld automatically. Exactly how much you actually pay will depend on your tax bracket and the deductions you qualify for. So you file your tax return with Form T1 as personal income. When you file your taxes as a sole prop, your business income is treated as personal income, and reported on your personal tax return— Form T1, General Income Tax and Benefit Return.

Even though you report your income on Form T1, the CRA wants to know about all your business activities during the year. The client fills out one copy of the form, reporting how much they paid you, and submits it to the CRA.

They fill out a second form, and send it to you. Using your T4As for the year, you can determine how much revenue you earned from each client, and in total.

Business expenses are any costs you incur in the course of running your business. And, if you keep good records , you may be able to deduct some of them from your taxes. Not sure what qualifies as a deductible expense? Every qualified business expense needs to be backed up with an itemized receipt, in case of a CRA audit.

For ambiguous expenses—ones that could be interpreted as being for personal use, rather than professional—take care to make a note on the receipt about the purpose of the expense.

For example, if you grab lunch with a client in order to discuss a project, write on the back of the receipt who you met and what you talked about.