There is a trend taking place in the last twelve months. The number of CRA reviews that I am dealing with have increased noticeably. Many of these reviews are not for an earth shattering amount of GST or income taxes being reviewed. They are what I would call random audits to see if the taxpayers randomly chosen are being honest and then extrapolate from there.
Many mature businesses have endured this at least once during their life time – a CRA tax audit. Most businesses survive an audit with no issue. This happens when the business has an adequate set of financial records that is easy for the CRA auditor to examine. So what makes up an adequate set of financial records. First of all, the CRA audit has changed from twenty years ago. In the past, an actual person came to the business premise to examine the books and records. Hence if the ... Read More
Buying a Small Business, Accounting Tips to Minimize Due Diligence CostsSuccessful businesses are often on the hunt to acquire other businesses for strategic reasons. Acquiring a competitor to increase market share or buying out a supplier to add synergy to an existing business are just a few of the many reasons businesses seek acquisitions. At times, an acquisition may be relatively small and a buyer’s cost-benefit analysis may determine that large accounting fees for due diligence ... Read More
Should rental properties be held personally or in a corporation?With the real estate in such high demand in Vancouver, Canada, many Vancouverites are buying investment properties either to generate rental income and/or participate in capital appreciation. The dilemma commonly faced is whether or not the rental unit(s) should be held personally or in a corporation?
Personal ownership makes more senseAlthough there are many pros, cons and legal considerations that come with ... Read More
Self-prepared returns are easy targetsIt is no secret that the Canadian government and the CRA have recently been finding new ways to raise revenue. In recent years, the CRA has devoted more resources towards identifying common filing errors in order to reassess additional taxes, interest and penalties to taxpayers. Statistically, the CRA is aware that tax returns prepared by the taxpayer or unlicensed professional accountants are more likely to contain errors, intentional or ... Read More
Foreign Asset Reporting Pitfalls for Canadian Holding Corporations and IndividualsCanadian taxpayers, individuals, and corporations who hold foreign property exceeding $100,000 in cost at any time during the year, have significant foreign asset reporting obligations. Not only is the reporting obligation an annual requirement, but the penalties for non-compliance can be very steep.
Foreign Asset Reporting ObligationsYour foreign asset reporting obligations are indicated on the ... Read More
One of the first questions I ask a new prospective client is “Why do you wish to switch tax advisors?” The most common complaint is that there is a lack of proactive tax planning from the current advisor. The second common complaint is late filing penalties and interest fees. More specifically, the taxpayer often complains that the current tax advisor has been unresponsive to a tax planning request or has been too busy to make the client a priority. After being in practice for many years now, I ... Read More
In my previous articles, the benefits of incorporating a business have been discussed at length. The tax advantages for corporations are substantial enough that some taxpayers structure the financial relationship with their “vendors” so that they are deemed self-employed, thus qualifying to operate as a corporation earning active business income. This allows the corporation to deduct expenses otherwise not deductible and qualify its corporate profit to the low corporate tax rate (currently 13.5% ... Read More
The past year, I have noticed quite a few more requests from CRA to review medical expenses, donation receipts, and HST returns filed. The best thing for a business owner being audited is that they have been honest with their tax affairs. The second best thing is for the business owner to have a competent professional Vancouver accountant to assist them through the process. If the records are complete and accurate and the professional accountant has experience dealing with CRA, then the audit ... Read More
“Taxes grow without rain.” This Jewish proverb is a crisp and beautiful expression of the agony that almost all taxpayers feel around the world. However, not all taxpayers are fortunate enough to have a simple and easy solution to this problem like Canadians do. With a reliable and extremely lucrative group of professionals like Mew and Company Chartered Accountants, both individuals and businesses can relax and watch while these expert Chartered Accountants work to make things simpler and ... Read More