Category: Definitions

You are a non-resident for tax purposes if you: normally, customarily, or routinely live in another country and are not considered a resident of Canada; or do not have significant resident ties in Canada; and you live outside Canada throughout the tax year; or you stay in Canada for less than 183 days in the…

You are a factual resident of Canada for tax purposes if you keep significant residential ties in Canada while living or travelling outside the country. The term factual resident means that, although you left Canada, you are still considered to be a resident of Canada for income tax purposes.  You could be a factual resident…

You are a deemed resident of Canada for tax purposes if you are in one of the following situations:

A dwelling means a self-contained domestic establishment. Generally, this is a complete and separate living unit with a kitchen, bathroom, sleeping facilities, and its own private access. 

Small business deduction (SBD) reduces part I tax that the corporation would otherwise have to pay. It is only available to corporations that were Canadian-controlled private corporations (CCPCs) throughout the tax year.

Eligible small business corporation this is a Canadian-controlled private corporation, where all or substantially all of the fair market value (FMV) of its assets are used principally in an active business that is carried on primarily in Canada by the corporation or an eligible small business corporation related to it.

Home buyers’ plan (HBP) is a government program which allows you to borrow funds from your registered retirement savings plan (RRSP) tax free to buy or build your home.

A terminal occurs if, at the end of a fiscal year, when all assets in a class have been disposed of but a undepreciated Capital Cost (UCC) balance still remains in the pool.

Unused RRSP deduction room at the end of the year generally means your RRSP deduction limit for the year minus the amount you deducted for RRSP and SPP contributions for that year.

Retiring allowance, also called severance pay, is an amount you receive on or after retirement from an office or employment in recognition of long service.