Tax Compliance in CanadaThe Bookkeeper's Handy Reference
This is "The Due Dates" page. It summarizes tax compliance due dates and information that would be of interest to Canadian small business owners and bookkeepers who work from home.This chat should help small business employers answer employee questions such as, "When do T4s come out?". it’s not always made consciously, but it is still a choice. -- Gary Ryan Blair --
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What is considered the "official" receipt date at the CRA?
Business compliance returns must be physically received by the CRA (not Canada Post) on or before the due date. Canada Post mailing date is not considered to be the receipt date. (The post marked date is only valid as a receipt date for individuals not businesses.) If the due date falls on a weekend or a public holiday, then you have until the next business day.
If you pay electronically, check with your financial institution to see how long from the date of your payment until the funds reach CRA. The funds have to be received by CRA (not your bank) by the due date.
Most financial institutions process overnight. In most cases you have to make your payment online before midnight on the day before the payment is due.
Let's Chat About ...
Owning and operating a business in Canada means you have some legal responsibilities. Canada Revenue Agency (CRA) requires regular reporting of Canadian sales tax, payroll taxes, and income taxes. Each province and territory has their own tax related requirements as well. These regulations are often referred to as government compliance requirements.
Tax compliance returns and payments should be filed on time. Failure to report and remit by due dates leads to costly penalties and interest charges. This site provides the Canadian bookkeeping information you need to know to put more money in your pocket and avoid these charges.
The Bookkeeper's Tip
A Good Tax Compliance Practice
Even if you can't pay the taxes owing, always file compliance returns by their due dates to avoid pricey penalty charges. Interest charges on the balance owing will still apply.
GAAP Update Government Remittances ... and ASPE Have you been wondering if the new Accounting Standards for Private Enterprise (ASPE) that came into effect on January 1, 2011 will affect how you report government remittances on your financial statements? The June/July 2010 issue of CA Magazine (www.camagazine.com) has an article titled What's Changed?. The article explains that the disclosure requirements under ASPE have been reduced ... and simplified. One significant disclosure has been added. There is now a requirement with respect to government remittances other than income taxes to disclose the amount payable at the end of the period. The reasoning behind this is that lenders are the primary users of small business financial statements. Lenders view the status of government tax compliance remittances as important because they have priority status in a bankruptcy. |
Bookkeeper's Handy Reference
Late Filing Penalties for Information Returns
Effective January 1, 2010
Source: CRA website> Businesses> Payroll> General Information> Consequences> Late filing / Failure to file information returns
Generally most information returns are due by the last day of February. The penalty for filing past the due date is the greater of $100 or as determined in the table below:
| Number of Slips | Penalty / Day | Maximum Penalty |
|---|---|---|
| 50 or less | $10 | $1000 |
| 51 to 500 | $15 | $1500 |
| 501-2500 | $25 | $2500 |
| 2501-10000 | $50 | $5000 |
| Greater than 10001 | $75 | $7500 |
Bookkeeper's Handy Reference
Tax Compliance Responsibilities YOU Should Know
Source: The Knowledge Bureau
| Tax Event | Moving Timeline |
|---|---|
| Correcting a Return for Errors or Omissions | 10 years after the end of the adjusted taxation year |
| Tax Court Appeals | No later than 90 days from mailing date of Notice of Reassessment or confirmation of assessment No earlier than 90 days following mailing date of Notice of Objection (if CRA has not responded) |
| Collections - Tax Owing | 10 years from date of assessment Debt collection is suspended when a Notice of Objection or an appeal has been made |
| Objection to a Notice of Assessment or Reassessment | In general, 90 days from mailing date of notice ... individuals 1 year from due date of return |
| CRA Refunds | In general, 3 years from end of relevant tax year ... EI 3 years; CPP 4 years; individuals 10 years for Federal, Ontario and Quebec If due to loss carryback, extended to 6 years ... 7 years if the corporation is not a CCPC |
Make sure you discuss your situation with a professional who can give you advice tailored to your specific circumstances.
Pay Taxes Online At CRA Website
Canadian bookkeeping just got a little easier. As of October 2, 2009, CRA has introduced My Payment service. You can pay your business (and individual) taxes online instantly from your bank account through a secure link with approved Canadian financial institutions.
The institutions currently able to participate are RBC, TD, BMO and Scotiabank as they have INTERAC Online agreements.
This service allows you to pay GST/HST, payroll deductions, corporate income tax, excise duties and taxes, individual income tax ... and more.
If you pay after hours, or on the weekend or a holiday, the online payment will be credited the following business day. This service will not allow post dated transactions.
It works by signing onto My Payment located on the home page of the CRA website. Once in My Payment, a set of instructions comes up. Just follow the instructions and make your selections as prompted. No banking information is shared with CRA.
Handy Bookkeeper's Reference
February 2012
| Tax Filing Deadline | Week Day | Tax Type | Tax Period | Form to be Filed | Payment Deadline |
|---|---|---|---|---|---|
| January 25 | Wednesday | Payroll Semi-Monthly | January 1-15 | PD7A | January 25 |
| January 31 | Tuesday | GST/HST Monthly | December | GST34-2 E or 3 E | January 31 |
| February 10 | Friday | Payroll Semi-Monthly | January 16-31 | PD7A | February 10 |
| February 15 | Wednesday | Payroll Monthly | January | PD7A | February 15 |
| February 27 | Monday | Payroll Semi-Monthly | February 1-15 | PD7A | February 27 |
| February 29 | Wednesday | GST/HST Monthly | January | GST34-2 E or 3 E | February 29 |
| three months after yearend | -- | GST/HST Annual yrend NOT Dec 31 | -- | GST34-2 E | three months after yearend |
| June 15, 2012 | Friday | GST/HST Annual yrend IS Dec 31 | 2011 | GST34-2 E | April 30 |
Province - British Columbia Tax Compliance DEADLINES
| Tax Filing Deadline | Week Day | Tax Type | Tax Period | Form to be Filed | Payment Deadline |
|---|---|---|---|---|---|
| REMINDER May 1, 2011 | Sunday | BC Minimum Wage Increase | -- | -- | May 1 |
| REMINDER Nov 1, 2011 | Tuesday | BC Minimum Wage Increase | -- | -- | Nov 1 |
| January 20, 2012 | Sunday | WCB Quarterly Filer | Oct to Dec 2011 | Employer's Remittance Form 1820 | January 20 |
| February 29, 2012 | Monday | WCB Annual Report | Jan to Dec 2011 | Employer Payroll and Contract Labour Report 1810 | February 29 |
| REMINDER May 1, 2012 | Tuesday | BC Minimum Wage Increase | -- | -- | May 1 |
You should have received your base rate and classification unit letter from WCB for 2012 by December 2011.
PST Tax Compliance Notes - PST was eliminated in BC on June 30, 2010. HST became effective July 1, 2010. The final due date for supplemental returns (July to December, 2010) was January 23, 2011. A return should have been filed each month following tax collection. Vendors were permitted to only refund PST to their customers up to October 31, 2010.
Ernst & Young has an excellent article on PST wind-up points for Ontario and BC that is a must read. It was located at www.ey.com> Services> Tax> PST wind-up points for Ontario and BC but you may have to do a google search now for their 2010 Issue No. 36 20 October 2010 Tax Alert. I have a copy if you need information on this and can't find it.
Due to the 2011 referendum held in BC, PST will be returning to BC in 2013 ... awesome twice the paperwork, twice the fun! :0(
Tax Compliance Reminders 2011/2012 Tax Season
LIFETIME ACCESS. Click on image for more information.
Bookkeeper's Handy Reference
2011/2012 Canadian Tax Season Due Dates
| Tax Type | Tax Period | Form to be Filed | Filing AND Payment Deadline | Week Day |
|---|---|---|---|---|
| Interest payment on inter-spousal loans | 2011 | bank transaction | Jan. 30, 2012 | Tuesday |
| T4, T4A, T5 Receipts | 2011 | T4,T4A,T5 and TSums | Feb. 29, 2012 | Wednesday |
| RRSP Contribution | 2011 | -- | Feb. 29, 2012 | Wednesday |
| T3 Receipts | 2011 | T3 and T3Sum | Mar. 31, 2012 | Saturday |
| US Tax Return | 2011 | -- | Apr. 16, 2012 | Monday |
| Individual Tax Return | 2011 | T1 | April 30, 2012 | Monday |
| Self-Employed Tax Return (incl spouse) | 2011 | T1 (T2125) | FILE-Jun. 15 PAY-Apr 30 | FILE-Fri. PAY-Mon. |
| Corporate Tax Return | 2011 | T2 | Click here for details | -- |
| Construction Payment Reporting System (CPRS) | 2011 | T5018 & T50818 Sum | 6 months after end of reporting period | -- |
Click here for CRA 2012 indexation adjustment for personal income tax and benefit amounts.
Bookkeeper's Handy Reference
2011/2012 Canadian Tax Installment Due Dates
| Tax Type | Tax Period | Form to be Filed | Filing AND Payment Deadline | Week Day |
|---|---|---|---|---|
| 4th Tax Installment | 2011 | INNS3 E or T1162A | December 15, 2011 | Thursday |
| Annual Installment Farmers, Fishermen | 2011 | mailed in Nov | December 31, 2011 | Saturday |
| 1st Tax Installment | 2012 | INNS3 E or T1162A | March 15, 2012 | Thursday |
| 2nd Tax Installment | 2012 | INNS3 E or T1162A | June 15, 2012 | Friday |
| 3rd Tax Installment | 2012 | INNS3 E or T1162A | September 15, 2012 | Saturday |
Bookkeeper's Handy Reference
2011/2012 Tax Date Reminders
| Tax Type | Tax Period | Form to be Filed | Deadline |
|---|---|---|---|
| New Benefit Year Begins (CTB, GST Credit, OAS) | 2011 | 2010 T1 | Fri. Jul. 1, 2011 |
| Advance Payment Application WITB | 2011 | RC210 | Wed. Aug. 31, 2011 |
| Self-Assessment RRSP Excess Contributions Interest Penalty | 2011 | T1-OVP | Mon. Apr. 2, 2012 |
| Overdue Taxes Interest Begins Accruing Daily | 2011 | -- | Tue. May 1, 2012 |
| Refund Interest on Late Processed Refunds due from CRA | 2011 | -- | Fri. Jun. 15, 2012 |
Click on image for more information.
Before you file your tax return, be sure to check out Revenue Canada's web page on "Tax Cuts For Businesses and Individuals".
It provides you with information on some of the tax credits and benefits available to Canadians. If you click on Business or Individuals on the side bar, you will have access to more detailed information.
The Business side bar has been divided into categories to make it easy to find what is relevant to you:
- Construction
- Daycare
- E-commerce
- Self-employed
- Small businesses
- Other categories I won't list here.
The Individuals side bar has been divided into categories (not as nice as previously but still good) to make it easy to find what is relevant to you:
- Employees (previously the working taxpayer)
- Students (previously the student)
- Seniors (previously the senior)
- Persons with disabilities (previously the disabled and their caregivers)
- "The parent" has been moved. You will find it on the home page navigation button called Child and Family Benefits recipients
- Tradesperson (previously the tradesperson).
- Other categories have been added that I won't list here.
While still a good review for any Canadian bookkeeper on the latest changes, it's not as concise an overview as in past years.
This brings my chat on Tax Compliance to an end for today. Time to water my plants with the cold tea and refresh my cup. ;0)
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