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A corporation must file a corporation income tax return (T2) by its due date even if it does not owe taxes. Complete financials statements and the necessary schedules should also be attached to the T2 return.
Auditing is a way for the Canada Revenue Agency (CRA) to monitor and inspect GST/HST and income tax returns, excise taxes and duties, and payroll records. Audits help maintain public confidence in the fairness and integrity of Canada’s tax system.
You can deduct legitimate business expenses to low your income, and thus income taxes. But make sure you can back up your expense claims with supporting documents in case you are audited. Here are the common supporting documents:
Sole proprietorship is an unincorporated business entirely owned by an individual. It is one of the three most common types of business structures. The other two are partnership and corporation.
If you file your corporate income tax return late, the penalty is 5% of the unpaid tax that is due on the filing deadline, plus 1% of the this unpaid tax for each complete month that the return is late, up to a maximum of 12 months. If the Canada Revenue Agency (CRA) sent you…
You have to file your corporate income tax return within six months of the end of each tax year. The tax year of a corporate is its fiscal period.
To make a claim for SR&ED tax incentives, you have to file an income tax return and Form T661 – Scientific Research and Experimental Development (SR&ED) Expenditures Claim.
This is part three of the example about how to calculate Capital Cost Allowance (CCA).
Prescribed proxy amount (PPA) is a notional amount on which SR&ED ITC can be earned with respect to SR&ED overheads (and other expenditures). It is calculated as a percentage of a salary base. The PPA is only applicable when the claimant elects to use the proxy method.
Am arm’s length transaction is a transaction between persons who each act in their own self-interest. Related persons are not considered to deal with each other at arm’s length.