Information for Canadian Small

Businesses

RC4070(E) Rev. 15
 Is this guide for you?

A re you starting a new small business in Canada? Are

you operating one already? Then this guide is for you.
It will introduce you to the Canada Revenue Agency (CRA)
■

■
payroll deductions;
income tax reporting and payment;
programs and online services you need to know about, and ■ audits (how to prepare for and handle an audit);
give an overview of your obligations and entitlements
under the laws that we administer. ■ objections and appeals; and

Many activities of a small business are subject to different ■ electronic services.

forms of taxation. This guide will help you with each of For details on some topics, we will refer you to other
these, and will explain how to plan for taxes, keep records, publications which are available at www.cra.gc.ca/forms.
and make and report payments.
Note
It will also explain: This guide includes no GST/HST information that is
■ different kinds of business structures; specific to small businesses that are financial institutions for
GST/HST purposes. For this information, see
■ goods and services tax/harmonized sales tax Guide RC4022, General Information for GST/HST Registrants.
(GST/HST);
If you are not familiar with some of the terms used in this
■ excise tax, excise duties, and the softwood lumber guide, see “Definitions” on page 4.
products export charge;

The success of small businesses is an essential part of Canada’s economic growth. At the CRA, our goal is to provide all the
support we can. We work closely with small businesses to improve services, reduce paperwork, reduce the cost and time of
compliance, and maintain confidence in Canada’s tax system.

If you are blind or partially sighted, you can get our publications
in braille, large print, etext, or MP3 by going
to www.cra.gc.ca/alternate. You can also get our publications
and your personalized correspondence in these formats by
calling 1-800-959-5525.

Unless otherwise noted, all legislative references are to the Income Tax Act and the Income Tax Regulations.
La version française de cette publication est intitulée Renseignements pour les petites entreprises canadiennes.

www.cra.gc.ca
 Table of contents
Page Page
Definitions ......................................................................... 4 Chapter 7 – Audits.............................................................. 25
What is an audit? ................................................................. 25
Chapter 1 – General information ..................................... 7
Underground economy ...................................................... 26
Chapter 2 – Setting up your business ............................. 8 Tax alert ................................................................................ 27
Sole proprietorship .............................................................. 8
Chapter 8 – Objections and appeals ............................... 27
Partnership ........................................................................... 8
How to register a formal dispute ...................................... 27
Corporation .......................................................................... 9
Business number .................................................................. 9 Chapter 9 – At your service............................................... 28
Keeping records ................................................................... 10 Electronic services for businesses ..................................... 28
Bringing assets into a business .......................................... 12 Advance income tax rulings and interpretations............ 29
Asking for a Canada Pension Plan (CPP) or
Chapter 3 – Goods and services tax/harmonized
employment insurance (EI) ruling ................................ 29
sales tax (GST/HST) ..................................... 13
GST/HST rulings and interpretations.............................. 29
What is the GST/HST? ....................................................... 13
Excise duty rulings and interpretations ........................... 29
Who pays the GST/HST? ................................................... 13
Excise taxes and other levies rulings and
Do you have to charge the GST/HST? ............................. 13
interpretations.................................................................. 29
Should you register for the GST/HST? ............................ 13
Service Canada .................................................................... 29
Small supplier................................................................... 13
Scientific research and experimental development
Effective date of registration .......................................... 14
(SR&ED) investment tax credit ...................................... 30
Voluntary registration ..................................................... 14
Canada business service centres ....................................... 30
How to register................................................................. 14
Industry Canada .................................................................. 30
Fiscal year for GST/HST purposes ................................... 14
Your rights, entitlements, and obligations.............................. 30
Reporting periods ................................................................ 15
The Taxpayer Bill of Rights................................................ 30
Input tax credits ................................................................... 15
What is the Voluntary Disclosures Program? ................. 30
Becoming a registrant ...................................................... 16
Cancel or waive penalties and interest ............................. 30
Calculating your net tax...................................................... 16
GST/HST returns ................................................................ 17 Important dates for businesses ........................................ 31
Filing and remitting due dates ........................................... 17
Addresses on our website ................................................. 32
Chapter 4 – Excise taxes, excise duties, the softwood
Forms and publications ..................................................... 33
lumber products export charge, and the
Air Travellers Security Charge .................. 17 Online services ................................................................... 35
What are excise taxes and excise duties? .......................... 17 My Account.......................................................................... 35
Excise taxes ....................................................................... 17 Handling business taxes online ......................................... 35
Excise duties ..................................................................... 18 MyCRA – the web app for individual taxpayers on
Softwood lumber products export charge........................ 18 the go ................................................................................. 35
Air Travellers Security Charge .......................................... 18 Electronic payments............................................................ 35
Chapter 5 – Payroll deductions and remittances ........... 18 For more information ........................................................ 36
Do you need to register for a payroll program What if you need help?....................................................... 36
account? ............................................................................. 19 Direct deposit....................................................................... 36
What to deduct from your employees’ remuneration .... 19 Forms and publications ...................................................... 36
How to report payroll deductions ..................................... 20 Electronic mailing lists ....................................................... 36
Tax Information Phone Service (TIPS) ............................. 36
Chapter 6 – Income tax ....................................................... 20
Teletypewriter (TTY) users ................................................ 36
Accounting for your earnings ............................................ 20
Service complaints .............................................................. 36
Fiscal period for income tax purposes .............................. 20
Reprisal complaint .............................................................. 36
Income ................................................................................... 21
Tax information videos ...................................................... 36
Expenses ............................................................................... 23
How do the three most common types of business
structures pay income tax? ............................................. 24

www.cra.gc.ca 3
 Definitions

T erms that are all capitalized within a definition have

their own listing in this section.
Assets – Any property owned by a person or business.
Assets include money, land, buildings, investments,
inventory, cars, trucks, boats, and other valuables. Assets
Adjusted cost base (ACB) – Usually the cost of a property
can include intangibles such as GOODWILL.
plus any expenses to acquire it, such as commissions and
legal fees. Bad debt – Money owed to you that you cannot collect.
The cost of a CAPITAL PROPERTY is its actual or Balance – The amount left in an account after deposits and
DEEMED cost, depending on the type of property and withdrawals.
how you acquired it. It also includes capital expenditures, Budget – A plan outlining an organization’s financial and
such as the cost of additions and improvements to the operational goals.
property. You cannot add current expenses, such as
maintenance and repair costs, to the cost base of a property. Business expenses – Certain costs that are reasonable for a
particular type of business and that are incurred for the
For more information on ACB, see Interpretation Bulletin purpose of earning INCOME. Business expenses can be
IT-456, Capital Property – Some Adjustments to Cost Base, and deducted for tax purposes. Personal, living, or other
its Special Release. expenses not related to the business cannot be deducted for
Appeal – A process by which you ask a court to review the tax purposes.
decision that the Canada Revenue Agency’s Appeals Business number (BN) – An identifier assigned to a
Division made for the Minister of National Revenue. business to simplify and streamline the way the business
Arm’s length – Refers to a relationship or a transaction deals with the federal government. A business will have
between persons who act in their separate interests. An one BN.
arm’s length transaction is generally a transaction that Calendar year – A year that begins on January 1 and ends
reflects ordinary commercial dealings between parties on December 31.
acting in their separate interests.
Canada Pension Plan (CPP) – An insurance plan to help
“Related persons” are not considered to deal with each Canadians provide INCOME for their retirement. It also
other at arm’s length. Related persons include individuals gives them income if they become disabled. Contributions
connected by blood relationship, marriage, common-law are directly related to annual earnings.
partnership or adoption (legal or in fact). A
CORPORATION and another person or two corporations Capital cost allowance (CCA) – The deduction you can
may also be related persons. claim over a period of several years for the cost of
DEPRECIABLE PROPERTY, that is, property that wears
‘’Unrelated persons’’ may not be dealing with each other at out or becomes obsolete over time, such as a building,
arm’s length at a particular time. Each case will depend furniture, or equipment, that you use in your business or
upon its own facts. The following criteria will be professional activities.
considered to determine whether parties to a transaction
are not dealing at arm’s length: Capital gains – The amount by which the PROCEEDS OF
DISPOSTION less outlays and expenses is more than the
■ whether there is a common mind which directs the ADJUSTED COST BASE of CAPITAL PROPERTY.
bargaining for the parties to a transaction;
Capital loss – The amount by which the ADJUSTED COST
■ whether the parties to a transaction act in concert BASE as well as outlays and expenses of CAPITAL
without separate interests; “acting in concert” means, for PROPERTY is more than the PROCEEDS OF
example, that parties act with considerable DISPOSITIONS.
interdependence on a transaction of common interest; or
Capital property – Generally, any property of value,
■ whether there is de facto control of one party by the other including DEPRECIABLE PROPERTY. Common types of
because of, for example, advantage, authority or capital property include principal residences, cottages,
influence. stocks, bonds, land, buildings, and equipment used in a
For more information, see Income Tax Folio S1–F5–C1, business or rental operation.
Related persons and dealing at arm's length. Commercial activity – Any business or adventure or
Articles of incorporation – A legal document filed with a concern in the nature of trade carried on by a person. These
provincial or territorial government, or the federal activities do not include:
government, which sets out a CORPORATION’s purpose ■ the making of EXEMPT SUPPLIES; or
and regulations.
■ any business or adventure or concern in the nature of
Assessment – A formal determination of taxes, duties, or trade carried on without a reasonable expectation of
other amounts to be paid or refunded. This description also profit by an individual, a personal trust, or a partnership
applies to a reassessment (see NOTICE OF ASSESSMENT). where all the members are individuals.

4 www.cra.gc.ca
Commercial activity also includes making a supply of real Excise – Taxes and DUTIES on the manufacture, sale, or use
property, other than an exempt supply, by any person, of goods and items.
whether or not there is a reasonable expectation of profit,
Exempt supplies – Are supplies of property and services
and anything done in the course of making the supply or in
that are not subject to the GST/HST. GST/HST registrants
connection with the making of the supply.
cannot claim INPUT TAX CREDITS to recover
Confidentiality – The CRA protects income tax, GST/HST, the GST/HST paid or payable on expenses related to
excise duty, EXCISE tax, and other related tax and DUTY making exempt supplies.
information. The only people with access to this
Fair market value (FMV) – Generally, it is the highest
information are those who are authorized by law or those
dollar value that you can get for your property in an open
whom the taxpayer, REGISTRANT, or LICENSEE has:
and unrestricted market between an informed and willing
■ authorized online through My Account or buyer and an informed and willing seller who are dealing
My Business Account; or at ARM’S LENGTH with each other.
■ authorized by completing Form RC59, Business Consent, Fiscal period – The twelve-month period over which a
or Form T1013, Authorizing or Cancelling a Representative. business or profession reports its income-earning activities.
The fiscal period may or may not coincide with the
Corporation – A form of business authorized by federal,
CALENDAR YEAR. A business usually establishes its fiscal
provincial, or territorial law to act as a separate legal entity.
period when it files its first income tax return. See TAX
Its purpose and regulations are set out in its ARTICLES OF
YEAR.
INCORPORATION. One or more persons may own a
corporation. Goodwill – The excess of the purchase price of a business
over the FAIR MARKET VALUE of the net ASSETS of the
Cost of goods sold – The actual cost of items sold in the
business.
normal course of business during a specific period.
Income – The sum of revenues earned in a period of time. It
Debt – An amount that is owed. If you borrow money or
includes revenues from salaries, wages, benefits, tips,
buy something on credit, you have created a debt.
commissions, profits from operating a business or
Deemed – A legal term used for something that is profession, and investments earned.
considered to be something else for a specific situation.
Income statement – A financial statement that summarizes
Also applies to something which hasn’t occurred yet but is
the results of business activities (income and expenses) for a
still considered to have occurred for a specific situation.
period of time. Sometimes called a profit and loss statement.
Depreciable property – Property on which you can claim a
Information slips – These are forms that employers, trusts,
CAPITAL COST ALLOWANCE (CCA). It is usually
and businesses use to tell taxpayers and the CRA how
CAPITAL PROPERTY used to earn income from a business
much income was earned, and how much tax was
or property. The capital cost can be written off as CCA over
deducted.
a number of years. You usually group depreciable
properties into classes. For example, diggers, drills, and Input tax credit (ITC) – This is a credit that GST/HST
tools acquired that cost $500 or more belong in Class 8. You registrants can generally claim to recover the GST/HST
have to base your CCA claim on the rate assigned to each paid or payable for property or services they acquired,
class of property. imported into Canada, or brought into a PARTICIPATING
PROVINCE for consumption, use, or supply in the course
Disposition – Generally, this is the disposal of property by
of their commercial activities.
sale, gift, transfer, or change in use.
Instalments – Periodic payments of income tax that
Duty – Generally, the duty imposed under the Excise
individuals have to pay to the CRA to cover tax they would
Act, 2001, and the Excise Act, as well as the duty levied
otherwise have to pay on April 30. For GST/HST purposes,
under certain sections of the Customs Tariff and includes,
instalments are periodic payments that may also be payable
with some exceptions, the special duty.
by persons who file annual returns.
Election – A formal choice made between the different
Inventory – Generally, the total value of the goods on hand
options available under the tax laws to be applied to a
that a business intends to sell, uses for manufacture, or uses
taxpayer’s financial affairs. For income tax purposes,
to render a service. In certain cases, inventory can also
generally an election is made with your income tax and
include services.
benefit return. For GST purposes, generally an election is
made using a specific form which must be filed by a certain Lease – A contract under which a property is rented from
deadline. one person or business to another for a fixed period of time
at a specified rate.
Employment Insurance Program – This is a federal
program that provides financial assistance to people who Liability – A DEBT owed by a person or business.
are temporarily out of work. Employers and employees pay
Licensee – A person who holds a licence issued under the
amounts into the Employment Insurance Fund.
Excise Act, 2001, the Excise Tax Act, or the Excise Act.
Employment insurance premiums – These are deductions
Loss – The amount by which expenses are greater than
that an employer must make from employees’ paycheques
revenues.
and send to the Receiver General for Canada. Employers
must also contribute employment insurance payments.

www.cra.gc.ca 5
Motor vehicle – An automotive vehicle designed or ■ a van, pick-up truck, or similar vehicle that, in the tax
adapted for use on highways and streets. A motor vehicle year you bought or leased the vehicle, was used 90% or
does not include a trolley bus or a vehicle designed or more to transport goods, equipment, or passengers to
adapted to be operated only on rails. earn income;
Net income – Income subject to income tax after allowable ■ a pick-up truck that, in the tax year you bought or leased
deductions have been subtracted from gross or total income. it, was used more than 50% to transport goods,
equipment, or passengers while earning or producing
Non arm’s length – Generally refers to a relationship or
income at a remote work location or at a special work site
transaction between persons who are related to each other.
that is at least 30 kilometres from the nearest community
However, a non-arm’s length relationship might also exist having a population of at least 40,000 persons; or
between unrelated individuals, partnerships or
■ a clearly marked emergency medical service vehicle used
CORPORATIONS, depending on the circumstances. For
to carry paramedics and their emergency medical
more information, see the definition of “arm’s length.”
equipment.
Notice of assessment – Document that we send to
Payroll deductions – Income tax deductions, CANADA
taxpayers and GST/HST registrants after we have assessed
PENSION PLAN (CPP) or QUEBEC PENSION PLAN
their returns. It tells taxpayers or GST/HST registrants if
(QPP) contributions and EMPLOYMENT INSURANCE (IE)
we made any corrections to the returns or rebate
PREMIUMS that are deducted from an employee’s wages
applications and, if so, what they are. It also tells taxpayers
or salary and sent regularly to us. Employers also make
or registrants if they owe more tax or what the amount of
their own contributions to the CPP or QPP, and EI.
their refund will be.
Penalties – Amounts that taxpayers, registrants, or
Objection – First step in the formal process of resolving a
LICENSEES must pay if they fail to file returns or remit or
dispute between the CRA and a taxpayer, registrant,
pay amounts owing on time, or if they try to evade paying
licensee, or other person who thinks the CRA has
or remitting tax by not filing returns. Penalties must also be
misinterpreted the facts or applied the law incorrectly.
paid by people who knowingly, or under circumstances
Operating expenses – The routine costs of running a
amounting to gross negligence, participate in or make false
business. They include expenses for gasoline, electricity,
statements or omissions on their returns, and by those who
and office supplies. They do not include the cost of
do not provide the information required on a prescribed
buildings or machinery that is expected to last for several
form.
years. See CAPITAL COST ALLOWANCE.
Prepaid expense – An expense you pay for in advance; an
Participating provinces – Provinces that have harmonized
expense you incur for goods and services you will receive
their provincial sales tax with the GST to implement the
in a later FISCAL PERIOD; or an amount you pay in
harmonized sales tax (HST). Participating provinces
interest, income tax, municipal tax, rent, dues, or insurance
include New Brunswick, Newfoundland and Labrador, for later fiscal periods. A prepaid expense is included as an
Nova Scotia, Ontario, and Prince Edward Island, but do not asset on the BALANCE sheet at the end of a fiscal period.
include the Nova Scotia offshore area or the Newfoundland
offshore area except to the extent that certain offshore Proceeds of disposition – Generally, the amount you
activities are carried on in that area. received or will receive for your property. In most cases, it
refers to the sale price of the property. It could also include
Passenger vehicle – A motor vehicle designed or adapted compensation you received for property that has been
primarily to carry people on highways and streets. It seats a destroyed, expropriated, or stolen.
driver and no more than eight passengers. Most cars,
Quebec Pension Plan (QPP) – A pension plan equivalent to
station wagons, vans, and some pick-up trucks are
the CANADA PENSION PLAN (CPP) but offered in the
passenger vehicles. They are subject to the limits for CCA,
province of Quebec. The Quebec provincial government
interest, and leasing.
handles the contributions to the QPP.
A passenger vehicle does not include:
Rates of tax – Percentages of INCOME that must be paid as
■ an ambulance; tax. The Department of Finance Canada sets the basic
■ a clearly marked police or fire emergency-response income tax rates, which vary progressively with the
vehicles; amount of TAXABLE INCOME.

■ a motor vehicle you bought to use more than 50% as a Records – Documents such as account books, sales and
taxi, a bus used in the business of transporting purchase invoices, contracts, bank statements, and
passengers, or a hearse in a funeral business; cancelled cheques. Your books and records must be kept in
English or in French. You must keep them in an orderly
■ a motor vehicle you bought to sell, rent, or lease in a manner at your business or residence in Canada for at least
motor vehicle sales, rental, or leasing business; six years from the end of the last TAX YEAR to which the
■ a motor vehicle (except a hearse) you bought to use in a records relate. You must make these books and other
funeral business to transport passengers; documents available to our officers when requested.
■ a van, pick-up truck, or similar vehicle that seats no more Refund – For income tax purposes, it is when an amount is
than the driver and two passengers and that, in the tax sent to a taxpayer because of the assessment of a return. For
year you bought or leased the vehicle, was used more GST/HST purposes, it is when the net tax on a GST/HST
than 50% to transport goods and equipment to earn income; return results in an amount being refunded to a registrant.

6 www.cra.gc.ca
Regional excise duty office – An office that serves as the Taxable income – The amount of INCOME left after all
CRA’s liaison with registrants, LICENSEES, and the general allowable deductions have been subtracted from NET
public on all matters relating to the Excise Duty Program. INCOME. This amount is used to calculate the TAX
PAYABLE.
Registrant – Person who is registered or is required to
register for the GST/HST. Tax year – The CALENDAR YEAR or FISCAL PERIOD for
which income tax is to be paid.
Remittance – A payment of CPP or QPP, EI, income tax, or
GST/HST that is paid to us through a financial institution, Tobacco products – Manufactured tobacco, packaged raw
or that a business or individual sends directly to us. It also leaf, or cigars.
includes the employer’s share of CPP contributions and Workers’ compensation – Money paid to compensate a
EI premiums. person injured on the job. The money is paid out of an
Reserves – Funds set aside to cover future expenses, losses, insurance plan funded by employers and administered by a
or claims. provincial or territorial workers’ compensation
organization.
Salary – The amount an employer pays an employee for
work done. Each employer records this type of Zero-rated supplies – Supplies of property and services
employment income on T4 slips. that are taxable at the rate of 0%. This means there is no
GST/HST charged on these supplies, but GST/HST
Shareholder – A person (individual or CORPORATION)
registrants may be eligible to claim ITCs for the GST/HST
who owns shares of a corporation.
paid or payable on purchases and expenses made to
Social insurance number (SIN) – A unique and personal provide them.
number given to each contributor to the CANADA
PENSION PLAN, QUEBEC PENSION PLAN, and
EMPLOYMENT INSURANCE PROGRAM. A SIN helps
record the contributions and premiums paid into and the Chapter 1 – General information
benefits paid out of the plans and the program. Since these
social insurance plans and program are connected to the tax Finding information on the web
system, the SIN is also used as an identifier for federal
income tax purposes. Everyone who files an income tax and You can find business information and search by topic at
benefit return must provide a SIN. www.cra.gc.ca/business.

Sole proprietorship – An unincorporated business entirely You can also find a list of websites that might be useful for
owned by an individual. small businesses on page 32.

Spouse – Under the Income Tax Act, the term spouse only For more information on starting a business, see Canada
means a married partner. The term common-law partner Business (Services for Entrepreneurs) at
includes partners who meet certain conditions. For more www.canadabusiness.ca. There you will find information
information, see the General Income Tax and Benefit Guide. from the federal, provincial, and territorial governments, as
well as from many other sources.
Supply – The provision of property or a service in any way,
including sale, transfer, barter, exchange, licence, rental,
lease, gift, or other DISPOSITION. About the CRA
Tax centres – CRA offices in different regions of Canada The Canada Revenue Agency (CRA) is the federal
where we process tax returns. government agency responsible for administering tax laws
for the Government of Canada and most of Canada’s
Tax payable – The amount of income tax that you must pay provinces and territories, as well as for delivering various
on taxable income for the tax year. It is also the amount of social and economic benefit and incentive programs
tax payable on a TAXABLE SUPPLY (for GST/HST through the tax system.
purposes).
The CRA collects federal, provincial (except in Quebec),
Tax services offices (TSOs) – CRA offices across the and territorial individual income taxes.
country that provide a point of contact for the public. For
the address of and services available at your TSO, go to The CRA administers and collects the GST/HST (except in
www.cra.gc.ca/tso. Quebec), the air travellers security charge, the softwood
lumber products export charge, Canada Pension Plan (CPP)
Taxable benefits – Amounts of money, or the value of
contributions, employment insurance (EI) premiums, excise
goods or services, that an employer pays or provides in
duties on alcohol and tobacco products, excise taxes on
addition to salary. For example, the contribution by an
gasoline and fuel-inefficient vehicles, and a tax on
employer to a provincial or territorial health insurance plan
insurance premiums (other than marine).
for an employee is a taxable benefit.
Revenu Québec administers the GST/HST in Quebec,
Taxable supplies – These are supplies of property and
except for selected listed financial situations.
services that are made in the course of a COMMERCIAL
ACTIVITY and are subject to GST/HST (including For all provinces and territories (except Alberta and
ZERO-RATED SUPPLIES). Quebec), the CRA administers federal, provincial, and
territorial corporate income taxes.

www.cra.gc.ca 7
The CRA also administers Canada’s international tax where there is a reasonable expectation of profit and there is
agreements with other countries. Therefore, we have a key evidence to support that intention.
role in helping Canadian business and industry compete in
For GST/HST purposes only, a business also includes any
world markets by making sure they have a fair
activity whether or not it is engaged in for profit and any
environment in which to trade.
regular or continuous activity that involves supplying
The CRA is committed to helping small businesses in property by way of lease, license or similar arrangement.
Canada. It recognizes that, as entrepreneurs, you are very
The three most common types of business structures are:
busy making your business profitable. You may not always
have the time, expertise, or inclination to do it all yourself. ■ sole proprietorship;
In some circumstances, you probably consult with
professionals, such as lawyers, accountants, or customs ■ partnership; and
brokers, to help you with your business. Although these ■ Corporation.
individuals will help you, you are the one who is ultimately
responsible for the actions of your business. You need to The type of structure you choose has a significant effect on
stay informed so that you can work in partnership with the the way you report your income, the type of returns you
professionals you hire and with the CRA. file each year, and many other matters.

Your responsibilities are found in the following laws

of Canada: Sole proprietorship
A sole proprietorship is an unincorporated business that is
■ Income Tax Act (federal);
owned by one individual. It is the simplest kind of business
■ provincial and territorial income tax acts; structure.
■ Excise Tax Act; The owner of a sole proprietorship has sole responsibility
for making decisions, receives all the profits, claims all
■ Excise Act; losses, and does not have separate legal status from the
■ Excise Act, 2001; business.
■ Air Travellers Security Charge Act; and If you are a sole proprietor, you pay personal income tax on
all revenue generated by your business. You also assume
■ Softwood Lumber Products Export Charge Act, 2006. all the risks of the business. The risks extend even to your
The CRA administers these laws. However, the Department personal property and assets.
of Finance Canada is responsible for establishing the fiscal You may choose to register a business name or operate
and tax policies of the Government of Canada. under your own name or both.
When the Minister of Finance introduces a budget, it may
include proposed amendments to existing legislation. The Partnership
Department of Finance Canada then issues budget
A partnership is an association or relationship between two
documents to explain the reasons behind the changes. The
or more individuals, corporations, trusts, or partnerships
amendments proposed in the budget bill have to be
that join together to carry on a trade or business.
debated and approved by the Canadian House of
Commons and considered and approved by the Senate of Each partner contributes money, labour, property, or skills
Canada. The bill becomes law when royal assent is given by to the partnership. In return, each partner is entitled to a
the Governor General of Canada. share of the profits or losses of the business. The business
profits (or losses) are usually divided among the partners
based on the partnership agreement.
Chapter 2 – Setting up your Like a sole proprietorship, a partnership is easy to form. In
fact, a simple verbal agreement is enough to form a
business partnership. However, most partnerships are governed by
a written agreement setting out rules for partners entering
A business includes: or leaving the partnership, the division of partnership
income, and other matters.
■ a profession;
The partnership is bound by the actions of any member of
■ a calling; the partnership, as long as these are within the usual scope
■ a trade; of the operations.

■ a manufacture; and A partnership is considered to be a person for GST/HST

purposes. Therefore, it is important that you structure your
■ an undertaking of any kind. affairs in a clear and understandable manner, since your
For income tax purposes only, a business also includes an reporting and remittance of GST/HST will depend on the
adventure or concern in the nature of trade. For more type of structure you choose. If you are a partnership, you
information, see Interpretation Bulletin IT-459, Adventure or may want to set up a separate bank account, have a written
Concern in the Nature of Trade. It also includes any activity partnership agreement, and take other steps to make sure
that it is clear that the business is not a sole proprietorship.

8 www.cra.gc.ca
Corporation Business number
A corporation is a separate legal entity. It can enter into Your first step to doing business with
contracts and own property in its own name, separately the CRA
and distinctly from its owners.
The first time you register a business with us, we assign it a
A corporation may have some of the following features: business number (BN). The BN system is in place to
facilitate the interactions between businesses and the CRA.
■ It is a separate legal entity with a perpetual existence;
This helps businesses reduce costs and be more
■ It can generally raise larger amounts of capital more competitive. It also increases government efficiency.
easily than a sole proprietorship or partnership; or
The four major CRA business program accounts and their
■ The shareholders cannot claim any loss the corporation identifiers are as follows:
sustains.
■ RT – GST/HST
When forming a corporation, the owners transfer money,
■ RP – payroll deductions
property, or services to the corporation in exchange for
shares. The owners are referred to as shareholders. ■ RC – corporation income tax
You can buy and sell shares in a corporation without ■ RM – import/export
affecting the corporation’s existence. A corporation
continues to exist unless it winds up, amalgamates, or A program account number has three parts – a BN, a
surrenders its charter for reasons such as bankruptcy. program identifier and, a reference number. A whole
program account number has 15 characters, which are
You set up a corporation by completing articles of composed as follows:
incorporation and filing them with the appropriate
provincial, territorial, or federal authorities. ■ the nine-digit BN that identifies the business;
■ the two-letter program identifier; and
Are you responsible for your corporation’s ■ the four-digit reference number.
debts?
For example, your account number might look like this:
As a shareholder of your corporation, you have limited
liability. This means that you and the other shareholders are 123456789 RP 0002
not responsible for the corporation’s debts. However, limited
liability may not always protect you from creditors. For (BN) (Program (Reference
example, if a smaller, more closely held corporation wants to identifier) number)
borrow money from a bank or other creditor, the creditor If you had only one account (GST/HST for example), it
may ask for the shareholder’s guarantee that the debt will be would be designated as follows:
repaid. If you agree to this condition, you will be personally
liable for that debt if the corporation does not pay it back. 123456789 RT 0001

This applies to taxes owing as well. If your corporation owes When making payments or enquiries related to your
taxes and has obtained a loan or secured a line of credit, an account, you have to provide the nine-digit BN and identify
advance under the loan or line of credit can be intercepted on the type of account in question by providing the two-letter
account of the corporation’s tax arrears. Notwithstanding program identifier and the four-digit reference number.
that the proceeds of the advance have been paid to the You can register for a BN by Internet, telephone, fax, or
Receiver General for Canada, the corporation is deemed to mail. The Business Registration Online service at
have received the advance and is liable to the lender as such. www.businessregistration.gc.ca is easy to use, convenient,
When you have personally guaranteed the loan or the line of and secure. It is a one-stop, self-serve application that lets
credit for the corporation, you would be liable jointly with you register for a BN and any of the four major CRA
the corporation for the amounts intercepted. business program accounts. At the same time, you can
Directors may also be liable to pay amounts owed by the register for Ontario, New Brunswick, Nova Scotia, and
corporation if it has failed to deduct, withhold, remit or pay British Columbia programs. If your business’s mailing
amounts as required by the Income Tax Act, the Employment address is in Quebec, we suggest you visit
Insurance Act, the Canada Pension Plan, the Excise Act 2001, Revenu Québec’s website at www.revenu.gouv.qc.ca.
and the Excise Tax Act. Note
For more information on director’s liability, see Information Not all businesses are required to have a BN. It is,
Circular IC89-2R3, Directors’ Liability. therefore, important that you review the information for
each type of account before registering for a BN.
For more information on these accounts, including about
registering for any of these accounts, go to
www.cra.gc.ca/bn.

www.cra.gc.ca 9
Are you doing business in Quebec? and services (including those of your associates),
For businesses located in Quebec, you will have to register were $30,000 or less in the last four consecutive calendar
your program accounts for payroll, import-export, or quarters combined and in any single calendar quarter. The
corporation income tax with the CRA. However, you will threshold is $50,000 if you are a public service body (such
have to register your GST/HST program accounts with as a charity, non-profit organization, municipality,
Revenu Québec, instead of the CRA, unless you are a university, public college, school authority, or hospital
selected listed financial institution. authority). For more information on these thresholds, see
“Small supplier” on page 13.
If you are registering for GST/HST program accounts If you think your revenues will be more than $30,000,
only (or $50,000 if you are a public service body), it is probably
If you are registering for GST/HST program accounts only wise to register for the GST/HST sooner rather than later.
and you are not a selected listed financial institution, you Registering for the GST/HST is the same as registering for
do not need to register for a BN with us. For more a BN. However, once you are registered, you must charge
information or to register, visit Revenu Québec’s website at GST/HST on your taxable supplies of property and
www.revenu.gouv.qc.ca or contact Revenu Québec at: services (other than zero-rated supplies) as well as file
regular GST/HST returns whether or not you are a small
Revenu Québec
supplier. You have to stay registered for at least one year
3800, rue de Marly
before you can deregister if you are still a small supplier.
Québec QC G1X 4A5
A person may incur a number of expenses in the course of
Telephone: 1-800-567-4692
establishing a business, even before any taxable supplies
Outside Canada: 1-418-659-4692
are made. Registering early gives you certain advantages,
such as the right to claim, from the time you register, any
Do you need a BN? GST/HST paid or payable on your business’s start-up
If you need any of the four CRA business accounts listed on expenses. For more information, read “Input tax credit” on
page 9, you will need a BN. page 15 and see Guide RC4022, General Information for
GST/HST Registrants.
However, before you register for a BN, you need to know a
few things about the business you plan to operate. For If you intend to import goods into Canada, you should
example, you should know the name of the business, its open an import/export account before you import the
location, its legal structure (sole proprietorship, partnership, goods. This will help avoid delays at the port of entry.
or corporation), and its fiscal year-end. You should also have
As soon as you know that you will have employees, you
some idea of what the sales of your business will be.
should open a payroll deductions account. This account
Without this information, you will not be able to complete
will let you make regular payroll deductions for your
Form RC1, Request for a Business Number (BN).
employees and make remittances on time. For information
If you are registering for a GST/HST account, it is on how to make payroll deductions, see “Chapter 5 –
important that you provide all of the information required Payroll deductions and remittances,” on page 18.
to register. If you register for the GST/HST and your
business claims a net tax refund, the refund may not be Keeping records
paid if this information is inaccurate or incomplete.
Five reasons why keeping records can help
Notes
If you are a sole proprietor or a partner in a partnership,
you
you will continue to use your social insurance number 1. Complete and organized records can help you
to file your income tax and benefit return, even if you identify the sources of your income and decide
have a BN. whether you should charge GST/HST.
If you decide to incorporate, you will need a BN to pay You may receive cash or property from many different
your corporation income tax and to make instalment sources. If you do not have records showing your
payments to your corporation income tax account. income sources, you may not be able to prove that some
sources are non-business or non-taxable for income tax
For more information about the BN, go to www.cra.gc.ca/bn, purposes. You also need to have complete and
or see Booklet RC2, The Business Number and Your Canada organized records to show that your supplies are
Revenue Agency Program Accounts. zero-rated or not subject to GST/HST.

Reasons to register 2. Complete and organized records can mean tax

When deciding if you need to register for a BN, you must savings.
consider many factors, such as the reasons for registering Good records serve as a reminder of deductible
for a BN. You only need to register for those business expenses and input tax credits (ITCs). If you do not
accounts for which you need a BN to fulfill your legal record your transactions, you may forget some of your
obligations. expenses or ITCs when you prepare your income tax or
GST/HST returns. For more information on ITCs,
For example, you do not have to register for the GST/HST
see Guide RC4022, General Information for GST/HST
if you are a small supplier. You are a small supplier if your
Registrants.
total revenues from worldwide taxable supplies of property

10 www.cra.gc.ca
3. Complete and organized records can prevent most Your records must be permanent
of the problems you might have if we audit your Regardless of the accounting method you use, your records
income tax or GST/HST returns. must be permanent. They must contain a systematic
If auditors cannot determine your income or taxable account of your income, deductions, credits, and other
revenues because your records are incomplete, they will information you need to report on your income tax and
have to use other methods to establish your income and GST/HST returns.
GST/HST net tax. This will cost you time. In addition, if
your records do not support your claims, they could be What information should your records contain?
disallowed. Your records must:
■ let you determine how much tax you owe, or the tax,
4. Your records will keep you better informed about
duties, or other amounts to be collected, withheld, or
the financial position of your business.
deducted, or any refund or rebate you may claim; and
You need good records to establish your profit or loss,
as well as the value of your business. Information from ■ be supported by vouchers or other necessary source
good records can also tell you what is happening in documents. If you do not keep your receipts or other
your business and why. The successful use of records vouchers to support your expenses or claims, and there is
can show you trends in your business, let you compare no other evidence available, we may reduce the expenses
performance in different years, and help you prepare or claims you have made.
budgets and forecasts. Your records must meet the requirements of the law.
Therefore, incomplete records that use approximate
5. Complete and organized records may help you get amounts are not acceptable.
loans from banks and other creditors.
Note
Creditors need accurate information about your
If you are required to charge GST/HST, you have to
financial position before they give you a loan. To give
include specific information on your invoices. The
them this information, you need to keep organized
information you have to include depends on the amount
records. Also, good records show potential creditors
of the invoice. For more information, see Guide RC4022,
that you know what is going on with your business.
General Information for GST/HST Registrants.
Legal requirements for keeping records Retaining and destroying records
All records such as paper documents and those stored in an
The six-year requirement
electronic medium (such as on computer disk), must be
You have to keep records (other than certain documents for
kept in Canada or made available in Canada at our request.
which there are special rules) for six years:
The records must be in English or French. For more
information on keeping records, go ■ from the end of the last tax year to which they relate for
to www.cra.gc.ca/records. income tax purposes;
You can keep your documents outside Canada if you get ■ after the last year when a record may be required for
written permission from us. GST/HST reporting purposes; and
■ after the goods are imported or exported.
What records should you keep?
You must keep records of all your income. Also, keep all If you filed your income tax return late, keep your records
receipts, invoices, vouchers, and cancelled cheques and supporting documents for six years from the date you
concerning outlays of money. These outlays include: filed the late return.
The minimum period for keeping records usually starts
■ salaries and wages;
from the last year you used the records, not the year the
■ operating expenses such as rent, advertising, and capital transaction occurred or the record was created.
expenditures; and
If you filed an objection or appeal, you must keep all
■ miscellaneous items such as charitable donations. necessary records until the latest of the following dates:
If you import goods into Canada, your records must show ■ the date the objection or appeal is resolved;
the price you paid for imported goods and list their origin ■ the date for filing any further appeal has passed; or
and description. They must also include any paperwork
about the reporting, release, and accounting of the goods, ■ the six-year record keeping period has passed.
as well as the payment of duties and taxes.
Request for early destruction
You should keep these records at your place of business or
If you want to destroy your records early, you have to get
residence in Canada (unless you get written permission
written permission from the CRA. To get this permission,
from us to keep them elsewhere). You have to make them
you have to apply in writing to the director of the tax
available to us on request.
services office in your area by either using Form T137,
Request for Destruction of Records, or preparing your own
written request.

www.cra.gc.ca 11
In addition to our requirements, there might be other federal, If the individual asset prices are set out in the sale
provincial, and municipal laws that require you to keep agreement, and the prices are reasonable, then you should
records. Any permission received from the CRA for early use these prices to claim capital cost allowance (CCA).
record destruction does not extend to records you are
If the individual asset prices are not set out in the contract,
required to keep because of these other laws.
you have to determine how much of the purchase price you
For more information, go to www.cra.gc.ca/records and see should attribute to each asset, how much to inventory, and
Information Circular IC78-10R5, Books and Records how much, if any, to goodwill. These amounts should
Retention/Destruction. coincide with the amounts the vendor determined when
reporting the sale.
Bringing assets into a business The amount you allocate to each asset should be its FMV.
You might transfer to your business assets that belong to You should allocate to goodwill the balance of the purchase
you personally. price that remains after you allocate the FMV to each asset
and to inventory.
If you are operating a sole proprietorship, this is a
reasonably simple process. The Income Tax Act requires that
you transfer these assets to the business at their fair market Example
value (FMV). This means that we consider you to have sold You buy a business for $480,000. The FMV of the net
the assets at a price equal to their FMV at that time. If this identifiable assets of the business is as follows:
amount is greater than your original purchase price, you Accounts receivable .................................................. $ 80,000
must report the difference as a capital gain on your income Inventory .................................................................... 40,000
tax and benefit return. Land ............................................................................ 120,000
Your business will show a purchase of these assets, with a Building ...................................................................... 200,000
cost equal to the FMV at the time of the transfer. This is the Total net identifiable assets ................................... $440,000
value that you will add to the capital cost allowance (CCA) You can determine the value of the goodwill by subtracting
schedule for income tax purposes. the total value of the net identifiable assets from the
For income tax purposes, when you transfer the property to purchase price:
a Canadian partnership or a Canadian corporation, you can Purchase price............................................................ $480,000
transfer the property for an elected amount. This amount Minus
may be different from the FMV, as long as you meet certain Net identifiable assets ............................................... 440,000
conditions. The elected amount then becomes your Amount attributed to goodwill.............................. $ 40,000
proceeds for the property transferred, as well as the cost of
the property to the corporation or partnership.
Once you have determined the values for the assets and the
The rules regarding these transfers of property are technical. goodwill, add the fixed assets (such as buildings and
They allow you to change your business type from a sole equipment) into the appropriate classes for the purpose of
proprietorship to a corporation or partnership; or from a claiming the capital cost allowance (CCA). The goodwill is
partnership to a corporation, on a tax-free basis. For more considered to be an eligible capital expenditure, which is
information, see Interpretation Bulletin IT-291R3, Transfer of treated in a manner similar to assets eligible for CCA.
Property to a Corporation Under Subsection 85(1), Information
Circular IC76-19R3, Transfer of Property to a Corporation Under Treat the value of the inventory as a purchase of goods for
Section 85, and Interpretation Bulletin IT-413R, Election by resale, and include it in the calculation of cost of goods sold
Members of a Partnership Under Subsection 97(2). in your income statement at the end of the year.

For GST/HST purposes, you may be able to claim an ITC For GST/HST purposes, if you buy a business or part of a
for the GST/HST paid or payable on property such as business and acquire all or substantially all (at least 90%) of
capital property and inventory, that you have on hand on the property that can reasonably be regarded as necessary
the day you register. For more information, read “Input tax to carry on the business, you and the vendor may be able to
credits” on page 15, and see Guide RC4022, General jointly elect to have no GST/HST payable on the sale by
Information for GST/HST Registrants. completing Form GST44, Election Concerning the Acquisition
of a Business or Part of a Business. You cannot use this
election if the seller is a registrant and you are not a
Buying a business registrant. In addition, you must buy all or substantially all
When you are considering becoming a business owner, you of the property, not only individual assets.
have the option of buying an existing business or starting
a new one. The option you choose will have a significant For the election to apply to the sale, you have to be able to
effect on how you will account for the purchase of the continue to operate the business with the property acquired
business assets for income tax purposes. under the sale agreement. You have to file Form GST44 on
or before the day you have to file the GST/HST return for
When you buy a business, you generally pay a set amount the first reporting period in which you would have
for the entire business. In some cases, the sale agreement otherwise had to pay GST/HST on the purchase.
sets out a price for each asset, a value for the inventory of
the business, and if applicable, an amount that you can
attribute to goodwill.

12 www.cra.gc.ca
Even when you use the election, GST/HST will still apply False GST/HST exemptions
to a taxable supply of a service made by the seller; a taxable
supply of property made by way of lease, licence, or similar Some individuals, businesses, and organizations are falsely
arrangement; and, if the buyer is not a registrant, a taxable claiming to be exempt from paying the GST/HST. In some
sale of real property. cases, they may even present a fake exemption card to
avoid paying the tax on their purchases.
Another way of buying an existing business is to buy the
shares of a corporation. This does not affect the cost base of If you do not collect the GST/HST from someone who
the assets of the business. As explained previously, a falsely claims to be exempt from paying the GST/HST, you
corporation is a separate legal entity and can own property still have to account for the tax you should have collected.
in its own name. A change in the ownership of the shares Some provinces exempt farmers, municipalities, and certain
will not affect the tax values of the assets the corporation businesses from paying the provincial sales tax. However,
owns. Generally, the purchase of shares of a corporation is these provincial exemptions do not apply to the GST/HST.
not subject to GST/HST.
For more information on changes to your business, go Do you have to charge the GST/HST?
to www.cra.gc.ca/tx/bsnss/tpcs/lf-vnts.
Generally, GST/HST registrants have to charge the
GST/HST on all taxable (other than zero-rated) supplies of
property and services they provide to their customers. You
Chapter 3 – Goods and services are a GST/HST registrant if you are already registered or
are required to register.
tax/harmonized sales tax
(GST/HST) Should you register for the GST/HST?
You have to register for the GST/HST if:
What is the GST/HST? ■ you provide taxable supplies in Canada; and
The GST is a tax that applies to most supplies of goods and ■ you are not a small supplier.
services made in Canada. The GST also applies to many You do not have to register if:
supplies of real property (for example, land, buildings and
interests in property) and intangible property such as ■ you are a small supplier that does not carry on a taxi business;
trademarks, rights to use a patent, and digitized products ■ your only commercial activity is the sale of real
downloaded from the Internet and paid for individually. property, other than in the course of a business (although
The participating provinces harmonized their provincial sales you do not have to register for the GST/HST in this case,
tax with the GST to implement the harmonized sales tax (HST) your sale of real property may still be taxable and you
in those provinces. Generally, the HST applies to the same may have to charge and collect the tax). For more
base of property and services as the GST. In some participating information, see Guide RC4022, General Information for
provinces, there are point-of-sale rebates equivalent to the GST/HST Registrants; or
provincial part of the HST on certain qualifying items. For ■ you are a non-resident who does not carry on business in
more information, see “Point-of-sale rebates” in Canada (see Guide RC4027, Doing Business in Canada –
Guide RC4022, General Information for GST/HST Registrants. GST/HST Information for Non-Residents).
GST/HST registrants that make taxable supplies (other Note
than zero-rated supplies) in the participating provinces For information on registration if you are a public
collect tax at the applicable HST rate. The HST rate can vary service body (charity, non-profit organization,
from one participating province to another. GST/HST municipality, university, public college, school authority,
registrants collect tax at the 5% GST rate on taxable supplies or hospital authority), see Guide RC4022, General
(other than zero-rated supplies) they make in the rest of Information for GST/HST Registrants.
Canada. Specific rules apply for determining whether a
supply is made in Canada and whether a supply is made in Small supplier
a participating province. For more information on the HST You do not have to register if you are a small supplier and
rates and the place-of-supply rules, refer to Guide RC4022, you meet one of the following conditions:
General Information for GST/HST Registrants.
■ you are a sole proprietor and your total revenues from
Who pays the GST/HST? taxable supplies (before expenses) from all your
businesses are $30,000 or less over the last four
Almost everyone has to pay the GST/HST on purchases of consecutive calendar quarters combined and in any
taxable supplies of property and services (other than calendar quarter; or
zero-rated supplies). However, Indians and some groups
and organizations, such as certain provincial and territorial ■ you are a partnership, a corporation, or other
governments, do not always pay the GST/HST on their organization and your total revenues from taxable
purchases. For more information, refer to “Supplies to supplies (before expenses) are $30,000 or less (or $50,000
diplomats, governments, and Indians” in Guide RC4022, or less if you are a public service body) over the last four
General Information for GST/HST Registrants. consecutive calendar quarters combined and in any
calendar quarter.

www.cra.gc.ca 13
Total revenues from taxable supplies means your revenues
from your worldwide supplies of property and services Example
that are subject to the GST/HST (including zero-rated Using the previous example, Zuly had the same sales, with
supplies), or that would be subject to the tax if supplied in the exception of the August 20 sale. Her total revenues from
Canada. It does not include goodwill, supplies of financial taxable sales in her first three calendar quarters combined
services, or sales of capital property. You also have to were $27,000, and were $15,000 in the quarter that ended
include the total revenues from taxable supplies of all of December 31, 2015 (each quarter is less than $30,000 but the
your associates in this calculation. For more information last four quarters combined are more than $30,000). In this
about your total revenues from taxable supplies, see case, she is a small supplier until January 31, 2016. Any
Guide RC4022, General Information for GST/HST Registrants. taxable sale she makes after January 31, 2016, is subject to
GST/HST.
Note
If your total revenues from taxable supplies are The day Zuly makes her first taxable sale after
over $30,000 (or over $50,000 if you are a public service January 31, 2016, is her effective date of registration.
body) in a calendar quarter or over four consecutive She has 29 days after this date to register for the GST/HST.
calendar quarters combined, you are no longer a small
supplier and you have to register for the GST/HST.
Voluntary registration
Exception If you are a small supplier and you are engaged in a
Taxi and limousine businesses and non-resident commercial activity in Canada, you can choose to register
performers selling admissions to seminars, voluntarily, even though you do not have to. If you register
performances, and other events must register for the voluntarily, you have to charge and remit the GST/HST on
GST/HST, even if they are small suppliers. your taxable (other than zero-rated) supplies of property
and services. You may be eligible to claim input tax credits
Effective date of registration (ITCs) for the GST/HST paid or payable on purchases and
The effective date of your GST/HST registration depends expenses for making these supplies. You have to be
on when you go over the small supplier threshold registered for at least one year before you can ask to cancel
of $30,000 (or $50,000 if you are a public service body). your registration if you are still a small supplier. For more
information, see Guide RC4022, General Information for
If your revenues are over the threshold in a calendar GST/HST Registrants.
quarter, you are considered a registrant and must collect
the GST/HST on the taxable supply (other than a If you choose not to register, you do not charge the
zero-rated supply) that made you go over the threshold. GST/HST (other than on certain taxable supplies of real
Your effective date of registration will be the day you made property), and you cannot claim ITCs.
this supply. You have 29 days after this day to register.
How to register
Example You can register for a GST/HST account when you register
Zuly began her business on January 1, 2015. Her total for a business number (BN). Your BN will be your business
revenues from taxable supplies (sales) were $5,000 during identification for all your dealings with us. For more
the first calendar quarter and $7,000 during the second information, see “Business number,” on page 9.
calendar quarter, meaning she was still a small supplier. In If you are incorporated, you may already have a BN and a
the quarter from July 1 to September 30, she had sales
corporation income tax account.
of $40,000, which included an order on August 20
for $25,000 that pushed her sales above $30,000 for the Note
quarter. Zuly is no longer a small supplier as of August 20 It is the person that registers for the GST/HST. Since a
and she has to charge the GST/HST on the $25,000 sale and partnership is a person for GST/HST purposes, it is the
any taxable sales made after this sale. She has 29 days after partnership that registers for the GST/HST and not each
that day to register. In this case, although she is considered partner separately.
to be a GST/HST registrant as of August 20, she has up to
If the physical location of your business is in Quebec, see
September 18, 2015, to register.
“Are you doing business in Quebec?” on page 10.

If you are under the threshold amount in one calendar

quarter, but you are over the threshold during four (or
Fiscal year for GST/HST purposes
fewer) consecutive calendar quarters combined, you are Usually, your fiscal year for GST/HST purposes is the same
considered to be a small supplier for those calendar as your tax year for income tax purposes. Generally, the tax
quarters and a month after those quarters. Your effective year of the following persons is a calendar year:
date of registration would be the day you make your first ■ individuals and certain trusts;
taxable supply (other than a zero-rated supply) after you
stop being a small supplier. You have 29 days after this day ■ professional corporations that are members of a
to register for the GST/HST. partnership (such as a corporation that is the professional
practice of an accountant, a lawyer, or a doctor); and

14 www.cra.gc.ca
■ partnerships, where at least one member of the Assigned and optional reporting periods
partnership is an individual, a professional corporation,
Annual taxable Assigned Optional
or another affected partnership.
supplies threshold reporting period reporting
However, some persons use non-calendar tax years. If you amounts periods
are a person described above who uses a non-calendar tax $1,500,000 or Monthly,
year approved by the CRA, you may want to use that same Annual
less Quarterly
year as your GST/HST fiscal year. More than
A corporation generally uses the same fiscal year for $1,500,000 up to Quarterly Monthly
income tax purposes and GST/HST purposes. However, if $6,000,000
a corporation has a non-calendar tax year for income tax More than
Monthly Nil
purposes, it can elect to use a calendar year for its $6,000,000
GST/HST fiscal year.
If you are a corporation that uses a non-calendar year for You or your authorized representative can change your
income tax purposes and GST/HST purposes, and you assigned reporting period by using our online services
change to another non-calendar tax year for income tax at www.cra.gc.ca/mybusinessaccount,
purposes, inform us of the change as soon as possible and or www.cra.gc.ca/representatives, or by sending us a
we will change your GST/HST fiscal year to match it. completed Form GST20, Election for GST/HST Reporting
Period.
You or your authorized representative can change your
fiscal year by using our online services at
www.cra.gc.ca/mybusinessaccount or
Input tax credits
www.cra.gc.ca/representatives, or by sending a completed As a registrant, you recover the GST/HST paid or payable
Form GST70, Election or Revocation of an Election to Change a on your purchases and expenses related to your
GST/HST Fiscal Year. commercial activities by claiming an input tax credit (ITC)
on your GST/HST return. ITCs are deducted from the tax
Reporting periods you are required to collect so that you remit only the
difference, which is referred to as your net tax.
Reporting periods are the periods of time for which you file
your GST/HST returns. Your reporting period is You can claim ITCs only to the extent that your purchases
determined based on the revenue from your total taxable and expenses are for consumption, use, or supply in your
supplies of property and services made in Canada in your commercial activities.
immediately preceding fiscal year or in all preceding fiscal There are some purchases and expenses for which you
quarters ending in your current fiscal year. cannot claim an ITC, such as:
This revenue includes zero-rated supplies of property and ■ certain capital property. For more information on these
services made in Canada, as well as those of your associates. properties, see Guide RC4022, General Information for
Do not include revenue from: GST/HST Registrants;

■ supplies made outside Canada; ■ taxable supplies of property and services acquired or
imported to make exempt supplies of property and
■ zero-rated exports of goods and services; services;
■ supplies of financial services; ■ membership fees or dues to any club whose main
■ taxable sales of capital real property; and purpose is to provide recreation, dining, or sporting
facilities (including fitness clubs, golf clubs, and hunting
■ goodwill. and fishing clubs), unless you acquire the memberships
to resell in the course of your business; and
When you register for the GST/HST, we generally assign
an annual reporting period. However, you may choose a ■ property or services you bought or imported for your
more frequent reporting period. The following chart shows personal consumption, use, or enjoyment.
the threshold revenue amounts that determine the assigned
reporting periods, as well as the optional reporting periods To claim an ITC, the expenses or purchases must be
available if you want to file a return more frequently. reasonable in quality, nature, and cost in relation to the
nature of your business.
Note
The invoices for your expenses and purchases must also
contain specific information. Generally, this information
would include the supplier’s business number (BN), and
the total amount of GST/HST paid or payable or an
indication that the amount includes the GST/HST at the
applicable rate. For more information on the specific
information that these invoices must contain, see
Guide RC4022, General Information for GST/HST Registrants.

www.cra.gc.ca 15
Becoming a registrant Home office expenses
When you become a GST/HST registrant, you may be able You can claim ITCs for your home office expenses only if
to claim an input tax credit (ITC) to recover the GST/HST the work space is:
you paid or owe on property and certain services you
■ your principal place of business; or
acquire before becoming a registrant.
■ consumed or used 90% or more to earn income from
In the case of property, you are considered to have
your business and used on a regular and continuous
purchased the property when you became a registrant if you
basis for meeting your clients, customers, or patients.
held the property for consumption, use or supply in the
course of your commercial activities right before you became This restriction for home office expenses is similar to that
a registrant. You are also considered to have paid GST/HST used for income tax purposes. For more information, see
on the purchase. The amount of tax paid is equal to the basic Interpretation Bulletin IT-514, Work Space in Home Expenses.
tax content of the property. As a result, you may be able to
claim an ITC for the tax you are considered to have paid. Meal and entertainment expenses
In addition, certain services, such as legal and accounting You can claim an ITC for the GST/HST you pay on
fees and regulatory fees acquired to set up a corporation, reasonable meal and entertainment expenses that relate to
may be treated as eligible capital expenditures for income your commercial activities. When the deduction for income
tax purposes. In this case, the services would be treated as tax purposes is limited to 50% of the cost of meals and
property and an ITC may be available. For more entertainment, you can only claim 50% of the GST/HST
information, see Interpretation Bulletin IT-143R3, Meaning you pay on those expenses as an ITC.
of Eligible Capital Expenditure.
For information on the meaning of basic tax content, and Passenger vehicles and aircraft
the availability of ITCs for start-up costs, see Guide RC4022, Corporations follow a primary use rule (more than 50% use
General Information for GST/HST Registrants, Policy in commercial activities) to determine their ITCs for
Statement P-018R, Limitation on ITC Eligibility where a Person passenger vehicles and aircraft.
Becomes a Registrant, and Policy Statement P-019R, Eligibility
for ITC on start-up costs – Eligible capital property. However, individuals and partnerships usually claim ITCs
for passenger vehicles and aircraft based on the capital cost
allowance (CCA) claimed for income tax purposes. If the
Operating expenses use in commercial activities is 10% or less, you cannot claim
The following are examples of operating expenses for any ITC. If the use in commercial activities is 90% or more, you
which you may be eligible to claim an ITC: may be eligible to claim a full ITC.
■ commercial rents; You usually calculate your CCA for income tax purposes at
the end of your fiscal year. Once you have calculated your
■ equipment rentals;
CCA, you can calculate your ITC.
■ advertising;
For more information on calculating and claiming ITCs,
■ utilities; and restrictions for ITCs, time limits for claiming ITCs, and
special rules that apply to charities, refer to Guide RC4022,
■ office supplies (such as postage, paper, and pens).
General Information for GST/HST Registrants.
You can claim an ITC equal to 100% of the GST/HST paid
or payable by you for a particular operating expense Calculating your net tax
(property or service) if substantially all (90% or more) of
your consumption or use of that property or service is (or is You have to calculate your net tax for each GST/HST
intended to be) in the course of your commercial activities reporting period and report this on your GST/HST return.
and all the other ITC criteria are satisfied. To do so, calculate:

You cannot claim an ITC for any of the GST/HST paid or ■ the GST/HST collected or that became collectible by you
payable by you for a particular operating expense (property on your taxable supplies made during the reporting
or service) if substantially all of your consumption or use of period; and
that property or service is (or is intended to be) other than ■ the GST/HST paid or payable on your business
in the course of your commercial activities (for example, purchases and expenses for which you can claim an ITC.
consumed or used to make exempt supplies).
The difference between these two amounts, including any
If you have both commercial activities and non-commercial adjustments, is called your net tax. It is either your
activities (such as exempt supplies), and at least 90% of an GST/HST remittance or your GST/HST refund. If you
operating expense cannot reasonably be allocated to your charged or collected more GST/HST than the amount paid
commercial or your non-commercial activities, you must or payable on your purchases, send us the difference. If the
apportion the GST/HST paid or payable for the property or GST/HST paid or payable is more than the GST/HST you
service between these two activities. You can only claim ITCs charged or collected, you can claim a refund of the difference.
for the portion of the GST/HST paid or payable for the
property or service that relates to its consumption or use in
your commercial activities. Any apportionment must be fair,
reasonable, and used consistently throughout the year.

16 www.cra.gc.ca
For most businesses, this calculation is straightforward. For Exceptions
more details on calculating your net tax, see Guide RC4022, Usually, your GST/HST payment is due by April 30 if
General Information for GST/HST Registrants. However, to all of the following conditions are met:
help reduce paperwork and bookkeeping costs, most small
businesses can use the quick method of accounting to ■ you are an individual with business income for
calculate their GST/HST remittance. For more information, income tax purposes;
see Guide RC4058, Quick Method of Accounting for GST/HST, ■ you file annual GST/HST returns; and
or Guide RC4247, The Special Quick Method of Accounting for
Public Service Bodies. ■ you have a December 31 fiscal year-end.

Note Although your payment is due April 30, you have until
Most charities have to use a special net tax calculation June 15 to file your GST/HST return.
method for reporting the GST/HST they charge and for As an annual filer, you may also have to pay quarterly
claiming ITCs. For more information, see Guide RC4082, instalments. If so, they are due no later than one month
GST/HST Information for Charities. after the last day of each fiscal quarter. For more information,
Bad debt adjustments see RC4022, General Information for GST/HST Registrants.
If you already reported and remitted the GST/HST for a
credit sale on your GST/HST return and all or part of the
amount owed to you became a bad debt that you write off, Chapter 4 – Excise taxes, excise
you can recover the GST/HST that relates to the bad debt
as a tax adjustment when you calculate your net tax. duties, the softwood lumber
If you claimed a GST/HST adjustment on a previous products export charge, and the
GST/HST return for a bad debt you wrote off and later you
receive a payment toward that debt, you have to add back Air Travellers Security Charge
the GST/HST part of that payment as a tax adjustment in
the calculation of your net tax on the GST/HST return for
the reporting period in which you received the payment for
What are excise taxes and excise
the bad debt. duties?
There are two types of federal levies on products
GST/HST returns manufactured or produced in Canada: excise taxes and
excise duties.
Unless you have filed a GST/HST return electronically, we
will automatically send you Form GST34, Goods and Services These levies are applied to a limited range of goods at
Tax/Harmonized Sales Tax (GST/HST) Return for Registrants, different rates and in different ways, depending on the
which includes personalized pre-printed information about product. Excise tax and excise duty apply to goods before
your account. You can stop receiving the GST/HST returns the GST/HST is added.
automatically by using our online service at
www.cra.gc.ca/mybusinessaccount or Excise taxes
www.cra.gc.ca/representatives.
Excise taxes are charged on:
Note
Some persons have to file their GST/HST returns ■ fuel-inefficient vehicles;
electronically. For more information, see “Mandatory ■ automobile air conditioners; and
electronic filing for GST/HST registrants” on page 30.
■ certain petroleum products.
Filing and remitting due dates The Excise Tax Act sets out the excise tax rate for each of
these goods.
Monthly and quarterly filers
When goods are made in Canada, excise tax is payable
If you have a monthly or quarterly reporting period, you
when the goods are delivered to the buyer. When they are
have to file your GST/HST return and remit any amount
imported, excise tax is payable by the importer at the time
owing no later than one month after the end of your
the goods were imported.
reporting period.
Under certain circumstances, you may be able to claim a
Annual filers refund of the excise taxes you paid.
If you have an annual reporting period, you usually have to Manufacturers need an excise tax licence (“E” licence)
file your return and remit any amount owing no later than unless they qualify as a small manufacturer. You qualify as
three months after the end of your fiscal year. a small manufacturer if your total annual sales are not more
than $50,000.

www.cra.gc.ca 17
A wholesaler licence (“W” licence) lets you buy goods for For more information, go to www.cra.gc.ca/softwood. For
resale without paying excise taxes. You may qualify for a information on registration or returns and payments, call
W licence under certain limited circumstances. When you 1-800-935-0313.
have this licence, you collect and remit the excise tax when
For technical enquiries regarding the Softwood Lumber
you sell the goods.
Products Export Charge Act, 2006, call 1-866-330-3304.
For more information, go to www.cra.gc.ca/etsl or call
1-866-330-3304. Air Travellers Security Charge
Excise duties The Canada Revenue Agency is responsible for
administering the Air Travellers Security Charge (ATSC).
Excise duties are charged on spirits, wine, beer, and The ATSC is collected by registered air carriers, and their
tobacco products. The rates of duty on spirits, wine, and agents, when an airline ticket is purchased.
tobacco products are given in the Excise Act, 2001 and duty
rates on beer are given in the Excise Act. All designated air carriers that provide air transportation to
individuals on an aircraft having a maximum certified take-
When these goods are manufactured in Canada, duty is off weight greater than 2,730 kilograms and whose service
payable on the goods at the point of packaging rather than includes chargeable enplanements must register to collect
at the point of sale. Generally, when they are imported into the ATSC.
Canada, duty is payable by the importer when the goods
are imported. These air transportation services, regularly scheduled
flights, and charter flights generally, include:
All persons who manufacture these goods in Canada must
be licensed. Most licensees must provide security of at ■ flights from listed airports in Canada to other listed
least $5,000. airports;

For more information, go to www.cra.gc.ca/exciseduty or ■ transborder flights; and

contact the nearest regional excise duty office. For a listing ■ international flights.
of their offices and numbers, see Excise Duty
Memoranda EDM1-1-2, Regional Excise Duty Offices, If you provide such air transportation services, you must
at www.cra.gc.ca/forms. complete registration Form B248, Registration Form Under
the Provisions of the Air Travellers Security Charge Act, and
mail it to:
Softwood lumber products export
charge Specialty Business Returns (SBR) Unit
Summerside Tax Centre
The Softwood Lumber Products Export Charge Act, 2006 is the 275 Pope Road
legislation for an export charge introduced under the Summerside, PE C1N 6E7
Softwood Lumber Agreement, 2006 (SLA 2006) between the
governments of Canada and the United States (U.S.). The Registered air carriers must file Form B249, Air Travellers
Act imposes a charge on certain softwood lumber products Security Charge Return, on a monthly basis, unless they have
exported to the U.S. after October 11, 2006. Products subject been approved by the CRA to file semi-annually.
to the export charge are defined by the agreement, and are The current ATSC rates are highlighted in Notice
included on the Export Control List under the Export and ETSL 0072. For more information on the ATSC, go to
Import Permits Act, administered by Foreign Affairs, Trade http://www.cra-arc.gc.ca/formspubs/tpcs/atsc-dspta-eng.html.
and Development Canada.
Individuals in Canada or the United States with ATSC
Every person who exports to the U.S. softwood products registration or account-related questions can call the SBR
subject to the charge has to register with the Canada Unit toll free at 1-877-432-5472. Individuals outside these
Revenue Agency (CRA) on or before the day on which the countries can call 902-432-5472. Individuals in Canada or
products are exported. To register, exporters must complete the United States with technical questions can call the CRA
Form B253, Softwood Lumber Products Export Charge – toll free at 1-866-330-3304.
Registration Form. Send the form to:
Surrey Tax Centre
Softwood Lumber Division
9755 King George Boulevard
Chapter 5 – Payroll deductions
Surrey BC V3T 5E1 and remittances
Every person who is registered must file, on a monthly
basis, Form B275, Softwood Lumber Products Export Charge
Return, on which they calculate the charge(s) imposed
during the calendar month. The return and the export
I f you are an employer, you must make regular
deductions from your employees’ remuneration.
You are an employer if:
charge payment are due on or before the last day of the
month after the month during which a charge was ■ you pay salaries, wages (including advances), bonuses,
imposed. For example, a return and a payment for the vacation pay, or tips to your employees; or
month of January will be due on or before the last day
of February. For information on how to file this return ■ you provide certain taxable benefits or allowances such
online, go to www.cra.gc.ca/businessonline. as board and lodging to your employees.

18 www.cra.gc.ca
An individual is an employee if the employment Payroll deductions can be complicated. If you are having
arrangement between the worker and the payer is an trouble with them, go to www.cra.gc.ca/payroll.
employer-employee relationship. Although a written
contract might say that an individual is self-employed Canada Pension Plan/Quebec Pension Plan
(working under a contract for services), we may not
The Canada Pension Plan (CPP) came into effect as a way to
consider the individual to be self-employed if there is
provide financial assistance to Canadians when they retire
evidence of an employer-employee relationship. For more
from the workforce. Every person who works in Canada is
information on employment status, see Guide RC4110,
eligible to get benefits when he or she retires.
Employee or Self-Employed?
If you run a business in Quebec, instead of CPP
Your responsibilities contributions, you deduct QPP contributions. Any
deducted QPP contributions should be sent to
As an employer, you have to:
Revenu Québec, instead of the Receiver General for
■ deduct Canada Pension Plan/Quebec Pension Plan Canada.
(CPP/QPP) contributions, employment insurance
Both employees and employers contribute to the CPP or the
(EI) premiums, and income tax from amounts you pay to
QPP. As an employer, you have to deduct CPP or QPP
your employees;
contributions from your employees’ pensionable earnings
■ send the deducted amounts along with your share of and remit them. You also have to contribute and remit an
CPP/QPP contributions and EI premiums that you have amount equal to these contributions in the employees’
to pay throughout the year for your employees to the respective CPP or QPP plans.
CRA; and
For information on the QPP, visit the Revenu Québec web
■ report the employees’ remuneration and deductions on a site at
T4 information return and give an information slip to http://www.revenuquebec.ca/en/entreprises/ras/calculer-
each of your employees. ras/rrq/default.aspx.

Do you need to register for a payroll Employment insurance

program account? The Employment Insurance Program is a federally
administered program that gives financial assistance to
You need to register for a payroll program account if you: people who are unemployed. The program also helps
■ pay salaries or wages; people get training for jobs.
■ pay tips and gratuities; As an employer, you are responsible for deducting
employment insurance (EI) premiums from your
■ pay bonuses and vacation pay; employees’ insurable earnings.
■ provide benefits and allowances to employees; or The rates for EI premiums may vary from year to year. For
■ need to deduct amounts, send those amounts to the CRA, the most current rates, go to www.cra.gc.ca/payroll.
and report amounts from other types of remuneration Note
(such as pension or superannuation). You must also make contributions to the EI program for
If you need a payroll program account and you already your employees. Generally, the employer’s contribution
have a business number (BN), you only need to add a will be slightly more than the employee’s.
payroll program account to that BN. However, if you don’t You also have to deduct provincial parental insurance plan
have a BN, you have to ask for one and register for a payroll (PPIP) premiums such as the Quebec Parental Insurance
program account before your first remittance due date. For Plan (QPIP) premiums. You must contribute employer
more information, see “Business number”, on page 9. amounts for PPIP premiums.

What to deduct from your Income tax

employees’ remuneration As an employer, you are responsible for deducting income
You are responsible for deducting CPP or QPP tax from the salaries, wages, or other remuneration you pay
contributions, employment insurance premiums, and your employees.
income tax from your employees’ remuneration. Employees fall into various categories (such as fishers and
To calculate the various deductions, you can use the Payroll employees who get paid commissions and claim expenses).
Deductions Online Calculator at www.cra.gc.ca/pdoc, or see To help you calculate the amount of income tax to deduct
Guide T4001, Employers’ Guide – Payroll Deductions and from the remuneration of your employees, you may need
Remittances, Guide T4032, Payroll Deductions Tables, or various federal and provincial forms, such as Form TD1,
Guide T4127-JAN, Payroll Deductions Formulas for Computer Personal Tax Credits Return. For more information on these
Programs. The calculator and these publications can help forms, see Guide T4001, Employers’ Guide – Payroll
you determine how much to deduct and what type of Deductions and Remittances.
income is pensionable, insurable or taxable.

www.cra.gc.ca 19
Remittances The accrual method
As an employer, you have to send to the CRA all Under the accrual method, you have to report income in the
CPP contributions, EI premiums, and income tax that were fiscal period you earn it, regardless of when you receive
deducted from your employees’ income, as well as your payment.
share, as an employer, of CPP contributions and
You also deduct allowable expenses in the fiscal period in
EI premiums.
which you incur them, whether or not you pay for them in
Remittances are considered to have been made on the day that period. Incur usually means you paid or will have to
they are received by the Receiver General for Canada. The pay the expense.
date a remittance is received by the CRA is also considered
to be the date the Receiver General receives the remittance. The cash method
You need to choose a remittance method that allows you to
Under the cash method, you report income in the year you
meet your remittance due date.
receive it (whether in cash, property, or services) and you
Deductions, along with your remittance form, must be deduct allowable expenses in the year you pay them, except
received by us on or before your remittance due dates. Due prepaid expenses. If you are a farmer, fisher, or
dates vary depending on the type of remitter you are. self-employed commissioned sales agent, you can use the
cash method.
Most employers have to send the deducted amounts
monthly. Large employers, however, may have to send For more information about the cash method, see
amounts more often. As for small business employers, they guides T4002, Business and Professional Income, T4003,
may be able to send their deductions quarterly. Farming Income, and T4004, Fishing Income.
For more information on the remittance methods, go to
www.cra.gc.ca/payroll or see Guide T4001, Employers’ How to keep sales and expense journals
Guide – Payroll Deductions and Remittances. You should keep a day-to-day record of your receipts and
expenses. Keep this record along with your duplicate
You can check your payroll remittance requirements using
deposit slips, bank statements, cancelled cheques, and
the “View remitting requirements” service at
receipts. This will support your sales revenue and
www.cra.gc.ca/mybusinessaccount.
expenditure claims.

How to report payroll deductions How to record your business expenses

Generally, you report your employees’ salary, wages, and You can generally deduct business expenses if you incur
taxable benefits, as well as any deductions, on the T4 slip, them only to earn income. If you claim expenses, you have
Statement of Remuneration Paid. to be able to back up your claim. You do this by keeping all
You have to fill out and give your employees their copies of your business-related vouchers and receipts, as well as
the T4 slip no later than the end of February after the recording all your expenses in a journal, a computerized
calendar year to which the slip relates. There is a penalty file, or a software accounting program.
for missing this deadline. For more information on this
penalty, go to www.cra.gc.ca/penaltyinformationreturns. Fiscal period for income tax purposes
For more information about T4 reporting requirements and You have to report your business income on an annual
filing methods, go to www.cra.gc.ca/slips or see basis. For sole proprietorships, professional corporations
Guide RC4120, Employers’ Guide – Filing the T4 Slip and that are members of a partnership, and partnerships in
Summary. which at least one member is an individual, professional
corporation, or another affected partnership, your business
income is generally reported on a calendar-year basis.

Chapter 6 – Income tax If you are a sole proprietor or if you are in a partnership in
which all the members are individuals, you can elect to
have a non-calendar-year fiscal period. To file such an
T his chapter introduces you to the process of reporting
earnings and paying income tax on your business’s
profits. It will explain how to account for what your
election, use Form T1139, Reconciliation of Business Income for
Tax Purposes. This form needs to be filed with the CRA by a
specific date. For more information, see Guide RC4015,
business earns and what kinds of income you have to
Reconciliation of Business Income for Tax Purposes.
report. It tells you what expenses you can deduct. It also
tells you how the three most common types of business A corporation’s tax year is its fiscal period. A fiscal period
structures pay tax. cannot be longer than 53 weeks (371 days). A new
corporation can choose any tax year-end as long as its first
Accounting for your earnings tax year is not more than 53 weeks from the date the
corporation was incorporated or formed as a result of an
Generally, you have to report business income (other than amalgamation. The corporation has to file its income tax
farming or fishing income) using the accrual method of return within six months of the end of its fiscal period.
accounting. Farmers or fishers can use the cash method or When the fiscal year ends on the last day of the month, the
the accrual method, but not a combination of both. return is due on or before the last day of the sixth month
after the end of the tax year. When the fiscal year ends on a

20 www.cra.gc.ca
day other than the last day of the month, the return is due ■ Form T1273, Statement A – Harmonized AgriStability and
on or before the same day of the sixth month after the end AgriInvest Programs Information and Statement of Farming
of the tax year. Activities for Individuals;
The rules for fiscal periods are complicated. It is a good ■ Form T1274, Statement B – Harmonized AgriStability and
idea to get familiar with them before you go into business. AgriInvest Programs Information and Statement of Farming
For more information, see Guide RC4015, Reconciliation of Activities for Additional Farming Operations; and
Business Income for Tax Purposes, and Guide T4002, Business
■ Form T2121, Statement of Fishing Activities.
and Professional Income.
You will find instructions on how to complete these forms
Note
in the income tax guides on our website.
If you are a GST/HST registrant, your decision about
your fiscal period-end for income tax purposes may We have designed the forms to accommodate the most
affect your GST/HST reporting periods, as well as your common types of income and expense categories used in
filing and remitting due dates. For more information, see business, so it should be easy for you to set up your
Guide RC4022, General Information for GST/HST accounting records. You can use the categories included on
Registrants. the forms when you establish your accounting records.
You also have to record as income any amount credited to
Income your account or set aside for you as payment for providing
This part gives you an overview of the business income that you goods and services. This includes amounts credited to your
should account for in your records for income tax purposes. accounts as offsets against an amount you owe.
You have to support all income entries in your records with
Types of income original documents—sales invoices, cash register tapes,
During the year, you may receive income from your receipts, fee statements, and contracts. Keep the supporting
business and from sources other than your sales. If they documents in chronological or numerical order and make
relate to your business, you have to include them in your them available if we ask to see them.
business income. You should also keep a separate record of your income
from all other sources, such as professional fees and income
What is business income from property, investments, taxable capital gains, estates,
Business income includes money you earn from a trusts, employment, and pensions.
profession, a trade, a manufacture or undertaking of any
kind, an adventure or concern in the nature of trade, or any Bad debts
other activity you carry on for profit and there is evidence If, during the year, you received any amount that you
to support that intention. For example, income from a wrote off as a bad debt in a previous year, you have to
service business is business income. However, business include the amount in your income for the current year.
income does not include employment income, such as
wages or salaries received from an employer. For more information, see Interpretation Bulletin IT-442R,
Bad Debts and Reserves for Doubtful Debts.
Note
You have to report all amounts of income that are required There may be GST/HST implications on the recovery of
for calculating income for tax purposes. If you do not report bad debts. For more information, see Guide RC4022,
all your income, you may be subject to a penalty of 10% of General Information for GST/HST Registrants.
the amount of income that you did not report.
Reserves
How to account for your business income You have to bring any reserve you claimed in a previous
Business owners have to provide information about their year back into income the next year. The Income Tax Act lets
business income and expenses. you take a new reserve based on your circumstances at that
time.
Although we accept other types of financial statements, we
encourage you to use any of the following forms that apply For more information, see Interpretation Bulletin IT-154R,
to you: Special Reserves.
■ Form T2125, Statement of Business or Professional Activities;
Vacation trips and awards
■ Form T2042, Statement of Farming Activities; If you received vacation trips or other kinds of awards
(such as jewellery or furniture) as a result of your business
■ Form T1163, Statement A – AgriStability and AgriInvest
activities, you must include the value of these awards in
Programs Information and Statement of Farming Activities for
your business income.
Individuals;
Vacation trips and awards may have GST/HST
■ Form T1164, Statement B – AgriStability and AgriInvest
implications. For more information, see Guide RC4022,
Programs Information and Statement of Farming Activities for
General Information for GST/HST Registrants.
Additional Farming Operations;

www.cra.gc.ca 21
Government grants and subsidies Selling a property
If you receive a grant or subsidy from a government or If you sell a capital property, you may have:
government agency, you have to report it as income or as a
■ a recovery of capital cost allowance, (known as
reduction of an expense. Generally, a grant or subsidy:
recapture);
■ increases your income or reduces your expenses;
■ an undepreciated balance in a class and no property
■ relates to an income deficiency; or remaining in that class (known as a terminal loss);
■ relates to specific expenses. ■ a capital gain of capital loss. For example, if you sell a
capital property for more than it cost, you have a capital
For example, if you are a farmer and you received a
gain, and if you sell it for less than it cost, you have a
payment to subsidize your income in a drought year, you
capital loss.
would add the payment to your income. However, if you
are a business that receives a government employment For more information on recaptures and terminal losses,
grant to allow you to hire more students, you would see IT-478R2, Capital Cost Allowance - Recapture and
generally deduct it from the wage expense you are Terminal Loss.
claiming.
For more information on capital gains and capital losses,
Government assistance that enables you to acquire capital see Guide T4037, Capital Gains, and for additional rules
property does not increase your net income. However, for relating to farmers, see Guide T4003, Farming Income.
depreciable property, you reduce the capital cost of the
There may be GST/HST implications when you sell a
property by the amount of assistance received. For other
property. For more information, see Guide RC4022, General
capital property, reduce the adjusted cost base accordingly.
Information for GST/HST Registrants.
For more information, see Interpretation Bulletin IT-273R2,
Government Assistance – General Comments. Inventory and cost of goods sold
To compare expenses against income, you need to do an
Surface rentals for petroleum or natural gas exploration
annual inventory. This is usually a list of goods held for
If you have land that you usually use in your farming or sale. If you are a manufacturer, this includes raw materials
business operation, and you are leasing it out for petroleum as well as packaging material and supplies,
or natural gas exploration, you may have to include the work-in-progress (goods and services that you have not yet
leasing proceeds in your income as a capital receipt or an completed at the end of your fiscal period), and finished
income receipt. goods that you have on hand. Inventory is used to calculate
For more information, see Interpretation Bulletin IT-200, the cost of goods sold and net income on Form T2125,
Surface Rentals and Farming Operations. Statement of Business or Professional Activities.
However, if you have a professional practice and you are
Rental income an accountant, dentist, lawyer, medical doctor, notary,
Rental income can be income from property or income from veterinarian, or chiropractor, you can elect to leave out
business. Income from rental operations is usually income your work-in-progress when you determine inventory.
from property.
Do not include rental income, whether from farm property How to value your inventory
or real estate, with your income from business or farming. The value you place on the items in your year-end
You have to report it separately on your tax return. inventory is important in determining your income. For
income tax purposes, the two acceptable methods of
For more information on rental income and how to report valuing your inventory are by determining:
it, see Guide T4036, Rental Income.
■ the fair market value of your entire inventory (use either
Barter transactions the price you would pay to replace an item or the
A barter transaction takes place when any two persons amount you would get if you sold an item); or
agree to exchange goods or services between them. ■ the value of individual items (or classes of items, if
If you are involved in a barter transaction, the goods or specific items are not easy to distinguish) in the
services you receive could be considered proceeds from a inventory, at their cost or their fair market value,
business operation. whichever is lower.

If you are in a business or profession that provides goods or After you choose a method of inventory valuation, you
services, and you exchange these goods or services in a have to continue to use the same method in later years. For
barter transaction, you have to include the value of the more information, see Interpretation Bulletin IT-473R,
goods or services you exchanged in your income. Inventory Valuation.

Barter transactions may also have GST/HST implications.

For more information, see Guide RC4022, General
Information for GST/HST Registrants.

22 www.cra.gc.ca
Expenses For more information, see Interpretation
Bulletin IT-99R5-CONSOLID, Legal and Accounting Fees.
This part gives you an overview of the business expenses
that you can claim for income tax purposes. For more
information, go to www.cra.gc.ca/business or Advertising expenses
see Guide T4002, Business and Professional Income. You can deduct expenses for advertising, including ads in
Canadian newspapers and on Canadian television and
radio stations. You can also include any amount you paid
What are business expenses? as a finder’s fee.
A business expense is a cost you incur for the sole purpose
of earning business income. Certain restrictions apply to the amount of the expense you
can deduct for advertising in a periodical. You can deduct
You have to support business expense claims with a sales all the expense if your advertising is directed to a Canadian
invoice, an agreement of purchase and sale, a receipt, or market and the original editorial content in the issue
some other voucher that supports the expenditure. If you is 80% or more of its total non-advertising content.
pay cash for any business expenses, be sure to get receipts
or other vouchers. Receipts should include the vendor’s You can deduct 50% of the expense if your advertising is in
name and the date. a periodical directed to a Canadian market and the original
editorial content in the issue is less than 80% of its total
non-advertising content.
Running a business from your home
You can deduct expenses for the business use of a work You cannot deduct expenses for advertising directed
space in your home, as long as you meet one of these mainly to a Canadian market when you advertise with a
conditions: foreign broadcaster.

■ it is your main place of business; or Business tax, fees, licences, and dues
■ you use the space only to earn your business income, and You can deduct any annual licence fees and business taxes
to meet your clients or customers. you incur to run your business.

You can deduct part of your maintenance costs, such as You can also deduct annual dues or fees to keep your
heating, home insurance, electricity, and cleaning materials. membership in a trade or commercial association.
You can also deduct part of your property taxes, mortgage However, you cannot deduct club membership dues
interest, and capital cost allowance (CCA). To calculate the (including initiation fees), if the main purpose of the club is
part you can deduct, use a reasonable basis, such as the to provide dining, recreational, or sporting facilities for its
area of the work space divided by the total area of your members.
home.
Insurance expenses
For more information, see Guide T4002, Business and You can deduct all regular commercial insurance premiums
Professional Income. that you pay for buildings, machinery, and equipment that
you use for your business.
Types of operating expenses
Personal or living expenses Interest and bank charges
In most cases, you cannot deduct personal or living You can deduct the interest you pay on money you borrow
expenses. However, you can deduct travel expenses you to run your business. However, there are some limits.
incur in the course of carrying on a business while away
There is a limit on the interest you can deduct on money
from home.
you borrow to buy a passenger vehicle. For more
The general rule is that you cannot deduct outlays or information, see “Motor vehicle expenses” in Guide T4002,
expenses that are not related to earning business income. Business and Professional Income.
There is also a limit on the amount of interest you can
Prepaid expenses deduct for vacant land.
A prepaid expense is an expense you pay ahead of time. If
you use the accrual method of accounting, claim any You can choose to capitalize the interest you pay on the
expense you prepay in the year or years in which you money you borrow for any of the following purposes:
receive the related benefit. ■ to buy depreciable property;
For more information, see Interpretation Bulletin IT-417R2, ■ to buy a resource property; or
Prepaid Expenses and Deferred Charges.
■ for exploration and development.
Accounting and legal fees For exploration and development, when you choose to
You can deduct the fees you incurred for external capitalize interest, you add the interest to the cost of the
professional advice or services, including consulting fees. property or the exploration and development costs.
You can deduct accounting and legal fees you incur to get Do not deduct the capitalized interest as a current expense.
advice and help in keeping your records. You can also For more information, read “Interest” in Guide T4002,
deduct fees you incur for preparing and filing your income Business and Professional Income.
tax and goods and services tax/harmonized sales tax returns.

www.cra.gc.ca 23
Maintenance and repairs Office expenses
You can deduct the cost of labour and materials for any You can deduct office expenses for small items such as pens,
minor repairs or maintenance done to property you use to pencils, paper clips, stationery, and stamps. However, you
earn income. However, you cannot deduct the value of cannot deduct expenses for capital items such as calculators,
your labour. filing cabinets, chairs, and desks. For more information,
see Guide T4002, Business and Professional Income.
You cannot deduct costs you incur for capital repairs.
However, you may be able to claim CCA on repaired
Salaries, including employer’s contributions
property. A capital expense generally gives a lasting benefit
or advantage. For example, the cost of putting vinyl siding You can deduct the cost of salaries you pay to employees.
on the exterior walls of a wooden house is a capital You report each salary by the end of February on a T4,
expense. Statement of Remuneration Paid, or T4A, Statement of Pension,
Retirement, Annuity and Other Income. For more information
For more information about capital cost allowance, see on these slips, see Guide T4001, Employers’ Guide – Payroll
Guide T4002, Business and Professional Income. Deductions and Remittances.

Meals and entertainment Can you deduct business start-up costs?

The maximum part you can claim for food, beverages, and To deduct a business expense, you need to have carried on
entertainment expenses is 50% of either the amount you the related business in the fiscal period in which the
incur or an amount that is reasonable in the circumstances, expense was incurred. Because of this, you have to be clear
whichever is less. about the date your business started.
The 50% limit also applies to the cost of your meals when Determining what you can claim as a start-up expense can
you travel or go to a convention, conference, or similar be difficult. For more information, see Interpretation
event. Special rules can, however, affect your claim for Bulletin IT-364, Commencement of Business Operations, or
meals in these cases. For more information, see “Meals and Guide RC4022, General Information for GST/HST Registrants.
entertainment,” “Convention expenses,” or “Travel,” in
Guide T4002, Business and Professional Income.
How do the three most common
For more information, see Interpretation Bulletin IT-518R, types of business structures pay
Food, Beverages, and Entertainment Expenses.
income tax?
Motor vehicle expenses Sole proprietor
You can deduct expenses you incur to run a motor vehicle A sole proprietor pays taxes by reporting income (or loss)
that you use to earn business income. However, several on a T1 income tax and benefit return.
factors can affect your deduction.
If you are a sole proprietor, you or your authorized
What kind of vehicle do you own? representative have to file a T1 return if you:
The kind of vehicle you own can affect the expenses you
deduct. For income tax purposes, there are two types of ■ have to pay tax for the year;
vehicles (see “Definitions” on page 4):
■ disposed of a capital property or had a taxable capital
■ motor vehicle gain in the year;
■ passenger vehicle ■ have to make Canada Pension Plan/Quebec Pension
Plan (CPP/QPP) payments on self-employed earnings or
For more information about capital cost allowance limits, pensionable earnings for the year;
interest limits, and leasing costs, see Guide T4002, Business
and Professional Income. ■ want to access employment insurance (EI) special
benefits for self-employed persons. For more
You can deduct motor vehicle expenses only when they are information, see Guide T4002, Business and Professional
reasonable and you have receipts to support them. Income; or
The types of expenses you can deduct include: ■ received a demand from us to file a return.
■ fuel and oil; You also need to file a return if you are claiming an income
■ maintenance and repairs; tax refund, a refundable tax credit, a GST/HST credit, or
the Canada child tax benefit. You also might have to file if
■ insurance; you are entitled to receive provincial tax credits.
■ licence and registration fees; The list above does not include every situation where you
■ capital cost allowance; might have to file.

■ interest you pay on a loan used to buy a motor vehicle; Note

and As a sole proprietor, you may have to pay your income
tax by instalments. You may also need to make
■ leasing costs. instalment payments for CPP contributions on your own
For more information about motor vehicles, income. For more information, go
see Guide T4002, Business and Professional Income. to www.cra.gc.ca/instalments.

24 www.cra.gc.ca
When you file your income tax and benefit return, you For more information, go to www.cra.gc.ca/partnership or
must include financial statements or one or more of the see Guide T4068, Guide for the Partnership Information Return
following forms, as applicable: (T5013 Forms).
■ Form T2125, Statement of Business or Professional Activities;
Corporation
■ Form T2042, Statement of Farming Activities;
A corporation has to file a T2 corporation income tax return
■ Form T1163, Statement A – AgriStability and AgriInvest no later than six months after the end of every tax year,
Programs Information and Statement of Farming Activities for even if it does not owe taxes. It also has to attach complete
Individuals; financial statements and the necessary schedules to the
return. A corporation usually pays its taxes in monthly or
■ Form T1164, Statement B – AgriStability and AgriInvest quarterly instalments. For more information about due
Programs Information and Statement of Farming Activities for dates, see “Important dates for businesses,” on page 31. For
Additional Farming Operations; more information on instalment payments and the filing
■ Form T1273, Statement A – Harmonized AgriStability and requirements for corporations, see Guide T4012,
AgriInvest Programs Information and Statement of Farming T2 Corporation – Income Tax Guide, or Guide T7B-CORP,
Activities for Individuals; Corporation Instalment Guide, or go to
www.cra.gc.ca/payments.
■ Form T1274, Statement B – Harmonized AgriStability and
AgriInvest Programs Information and Statement of Farming The tax year for a corporation is its fiscal period. For more
Activities for Additional Farming Operations; and information on corporations, go to www.cra.gc.ca/t2return.
■ Form T2121, Statement of Fishing Activities.
We will also accept a computer-generated version of these Chapter 7 – Audits
forms.

Partnership What is an audit?

A partnership by itself does not pay income tax on its Auditing is a way for the CRA to monitor and inspect
operating results and does not file an annual income tax GST/HST and income tax and benefit returns, excise taxes
return. Instead, each partner includes a share of the and duties, and payroll records. Although there is a high
partnership income (or loss) on a personal, corporation, or standard of compliance with the law in Canada, audits help
trust income tax return. You do this whether or not you us maintain public confidence in the fairness and integrity
received your share in money or as a credit to your of Canada’s tax system.
partnership’s capital account.
Each partner also has to file financial statements or one of
How we choose returns to audit
the forms referred to above in the section on sole Your return is recorded in a computer system that lets us
proprietorship. A computer-generated version of any of choose returns to be audited and sort them into different
these forms is acceptable. groups.

A partnership that carries on a business in Canada, or a In some cases, we compare selected financial information
Canadian partnership with Canadian or foreign operations for current and previous years of taxpayers involved in
or investments, has to file Form T5013, Statement of similar businesses or occupations.
Partnership Income, for each of the fiscal periods of the The four common ways of choosing returns are:
partnership where:
■ at the end of the fiscal period, the partnership has an 1. Computer-generated lists
absolute value of revenues plus an absolute value of Most returns are selected for audit review from
expenses of more than $2 million, or has more than computer-generated lists. For example, the computer
$5 million in assets; or system can compare the selected financial information
of taxpayers involved in similar businesses or
■ at any time during the fiscal period:
occupations and generate lists of returns with audit
– the partnership is a tiered partnership (has another potential. From these lists, we choose returns to be
partnership as a partner or is itself a partner in another audited.
partnership);
2. Audit projects
– the partnership has a corporation or a trust as a
In some cases, we test the compliance of a particular
partner;
group of taxpayers. If the test results show that there is
– the partnership invested in flow-through shares of a significant non-compliance within the group, we may
principal-business corporation that incurred Canadian audit its members on a local, regional, or national basis.
resource expenses and renounced those expenses to the
partnership; or 3. Leads
– the Minister of National Revenue asked in writing for a Leads include information from other audits or
completed Form T5013, Statement of Partnership Income. investigations, as well as information from outside
sources.

www.cra.gc.ca 25
4. Secondary returns Finalizing an audit
Sometimes we select returns for audit because of their When an audit is completed, the auditor may propose
association with other previously selected returns. For certain adjustments to your return. He or she will prepare a
example, if you are in partnership with another summary of the proposed adjustments.
taxpayer, and that person’s return has been selected for
audit, it is usually more convenient to examine all the If the auditor finds that your return has to be reassessed
records at the same time. (which means you will have to pay more taxes or you are
entitled to a refund), you will receive a proposal letter
How we conduct audits explaining the reason for the reassessment. You will have
30 days to agree or disagree with the proposed
If your return is selected, an auditor will review your reassessment. The auditor can further explain the
records at a CRA office (office audit) or at your place of reassessment if necessary.
business (field audit).
If you provide more information within this period, the
The auditor will examine books and records, documents, auditor will consider it and will issue a new proposal letter,
and information (collectively referred to as records) such as: if applicable.
■ information available to the CRA (such as tax returns If there are no proposed adjustments to your return, the
previously filed, credit bureau searches, or property auditor will tell you this when the audit is completed.
database information);
If there are changes, you will be issued a notice of
■ your business records (such as ledgers, journals, invoices, assessment or a notice of reassessment.
receipts, contracts, and bank statements);
Note
■ your personal records (such as bank statements, The auditor’s role is to determine the correct amount of
mortgage documents, and credit card statements); duty or tax payable. This may result in your taxes being
■ adjustments made by your bookkeeper or accountant to reduced and you receiving a refund.
arrive at income for tax purposes; and
What are your rights?
■ the personal or business records of other individuals or If the auditor finds that your return has to be reassessed
entities not being audited (for example, a spouse, family (which means you will have to pay more taxes or you are
members, corporations, partnerships, or a trust [settlor, entitled to a refund), you will receive a proposal letter
beneficiary, and trustee]). explaining the reason for the reassessment. You will have
The auditor will contact you and ask that you send specific 30 days to agree or disagree with the proposed
records to a CRA office, or arrange a convenient date and reassessment. The auditor can further explain the
time to start the audit at your place of business. reassessment if necessary.

If a field audit is needed, on arriving at your place of What are your responsibilities?
business, the auditor will present an identification card.
Before examining your records, the auditor may want to By law, you have to keep adequate books and records to
discuss the general nature of your business, or tour the determine your tax obligations and your entitlements.
premises to get a better understanding of the transactions Generally, books and records must be kept for a minimum
recorded in your books. of six years after the year they relate to.

Throughout the process, the auditor may request If you use a computer for your accounting records, you
information and help from your employees, particularly must keep your books and records in an electronically
those who do your accounting. readable format, even if you also keep them on paper.
Using the service of a tax professional does not relieve you
Your personal records and the personal or business records of your responsibilities.
of other individuals or entities are legally considered to be
part of the items that relate, or may relate, to the business For an audit, please make available to the auditor your
being audited. An auditor can also examine the records of records (both paper and electronic), any supporting
family members. documents, and explanations to the questions the auditor
will have.
Delays in the audit, and how to avoid them
The time an audit takes depends on the state of your
Underground economy
accounting records and related documents, as well as the The underground economy typically involves economic
size and complexity of your business. Your co-operation activity that is unreported or under-reported for tax
will help keep this time to a minimum. purposes. The underground economy includes failure:
Well-kept records will reduce the time needed to complete ■ to file;
the audit. For more information, see the record-keeping
■ to register;
guidelines on page 10 of this guide.
■ to report a business activity
■ to report business income; or
■ to report employment income.

26 www.cra.gc.ca
Know the businesses and individuals with whom you are ■ In every other case, including taxes that were assessed for
dealing, and use the information at your disposal, over-contributions to an RRSP or a TFSA, you have to file
including our website to recognize those who are an objection within the 90 days following the date of the
participating in the underground economy. For more notice of assessment or notice of reassessment.
information, go to www.cra.gc.ca/undergroundeconomy.
You or your authorized representative can file an objection
by:
Tax alert
■ using the online services:
Protect yourself!
– “Register my formal dispute” for individuals at
We know that most taxpayers, given the proper information www.cra.gc.ca/myaccount or through
and tools, will voluntarily meet their tax obligations. www.cra.gc.ca/representatives;
Our website contains information that will help taxpayers – “Register a formal dispute (Notice of Objections)” for
understand how to protect themselves against tax schemes, business at www.cra.gc.ca/mybusinessaccount or
and understand the consequences they might face. through www.cra.gc.ca/representatives;
For example, some taxpayers don't realize the financial and ■ sending us a completed Form T400A, Objection – Income
personal risks they are exposed to by paying cash for home Tax Act; or
renovations. Other taxpayers don't know that participating
in certain tax shelter schemes to avoid paying taxes could ■ sending a signed letter to the chief of appeals at your
not only mean a loss of their principal, the repayment of appeals intake centre.
taxes owed, and penalties and interest, but it could also
GST/HST – To file an objection, use Form GST159, Notice of
lead to fines and imprisonment.
Objection (GST/HST). The time limit for filing an objection is
Information is the key! For more information about how to within the 90 days following the date of the notice.
protect yourself against tax schemes, go to www.cra.gc.ca/alert.
In the province of Quebec, Revenu Québec administers the
GST/HST unless you are a selected listed financial
institution. To get information on time limits and how to
Chapter 8 – Objections and file an objection to a GST assessment or reassessment
completed by Revenu Québec, contact them directly. For
appeals more information, visit the Revenu Québec website
at www.revenu.gouv.qc.ca/en/entreprise/
If you disagree with an assessment, you can get an taxes/tvq_tps/default.aspx.
explanation of the changes by calling 1-800-959-5525. Many Excise duty – You or your authorized representative can
disputes are resolved this way, without having to file a file a notice of objection within the 90 days following the
formal dispute. day of your notice of assessment or notice of reassessment
If you want to change your assessment because of new or using:
additional information, you can: ■ the “Register a formal dispute (Notice of Objection)”
■ go to www.cra.gc.ca/changereturn; or service at www.cra.gc.ca/mybusinessaccount, or
at www.cra.gc.ca/representatives; or,
■ send a letter to the tax centre address shown on the
notice of assessment. ■ Form E680, Notice of Objection (Excise Act, 2001).

Note Other taxes – You or your authorized representative can

Include your social insurance number and any file a notice of objection using:
documents supporting the requested change with ■ the “Register a formal dispute (Notice of Objection)”
your letter. service at www.cra.gc.ca/mybusinessaccount, or
If you still disagree with the assessment, you have the right through www.cra.gc.ca/representatives;
to register a formal dispute. ■ Form E413, Notice of Objection (Excise Tax Act);
■ Form RC45, Notice of Objection (Softwood Lumber Products
How to register a formal dispute Export Charge Act, 2006); or
Income tax – If you disagree with your assessment or
■ Form E676, Notice of Objection (Air Travellers Security
reassessment, you can register a formal dispute. Filing an
Charge Act).
objection is the first step in the formal process of resolving a
dispute. The time limit for filing an objection is as follows: If you are using one of these forms, send it to the office
listed on the back of the form.
■ If you are an individual (other than a trust), or if you are
filing for a testamentary trust, the time limit for filing an Canada Pension Plan and employment insurance – If you
objection is either one year after the due date for the return think we have misinterpreted the facts or not applied the
or within the 90 days following the date of the notice of law correctly, you have the right to appeal assessments and
assessment or notice of reassessment, whichever is latest. rulings related to the Canada Pension Plan (CPP) and
employment insurance (EI).

www.cra.gc.ca 27
To file an appeal to the Minister of National Revenue, you If you are not registered, call 1-800-714-7257 to make the
or your authorized representative can: necessary changes to your address before using NETFILE.
■ use the online services
File your corporation income tax return over the Internet
at www.cra.gc.ca/mybusinessaccount or
at www.cra.gc.ca/representatives; You can file your corporation income tax return with us using
the Internet. You will benefit from faster processing and
■ mail your appeal to the CPP/EI appeals office located in refunds, less paper use, and lower mailing and courier costs.
your region or to any tax services office;
All corporations with annual gross revenue of more than
■ use Form CPT100, Appeal of a Ruling under the Canada $1 million have to file their corporation income tax return
Pension Plan and/or Employment Insurance Act (to appeal a over the Internet. Businesses can use our corporation Internet
ruling of CPP and/or EI); or filing service or file through My Business Account, and
authorized representatives can file through
■ Form CPT101, Appeal of an Assessment under the Canada
Represent a Client without a web access code. A penalty for
Pension Plan and/or Employment Insurance Act (to appeal
non-compliance will be charged if a corporation that has to
an assessment of CPP and/or EI).
file over the Internet does not comply with this requirement.
In all cases, you can send us a letter detailing your request,
After a corporation income tax return has been prepared
signed by you (or the appellant) or by an authorized officer
using our certified commercial software, simply access the
of a corporation.
corporation Internet filing website, follow the easy-to-use
For more information on the formal process of resolving a instructions, and send the return. You will receive
dispute, go to www.cra.gc.ca/resolvingdisputes. immediate confirmation once the return has been accepted
for processing. If you have problems sending the return
over the Internet, online messages should help you
solve them.
Chapter 9 – At your service
When you register with the CRA for direct deposit by using
our online service or by sending us Form RC366, Direct
Electronic services for businesses Deposit Request for Businesses, your refund will be in your
Electronic services help businesses by streamlining account the same day we would have mailed your cheque.
communications with the Canada Revenue Agency and To take advantage of this service, go
simplifying the preparation and submission of tax information. towww.cra.gc.ca/directdeposit.
For more information, go to www.cra.gc.ca/businessonline.
For more information, go to www.cra.gc.ca/mybusinessaccount
or to www.cra.gc.ca/representatives or call our
Registering your business Corporation Internet Filing Help Desk at 1-800-959-2803.
Business Registration Online is a one-stop registration
service that lets you apply for a business number (BN) with Mandatory electronic filing for GST/HST registrants
us, as well as register for programs administered by Some GST/HST registrants have to file their GST/HST
British Columbia, Nova Scotia, and Ontario. return electronically. Your filing options, however, depend
You can also use this online service if you have a BN and on your reporting circumstances. For more information on
need to register for any of the four major program accounts options for the electronic filing of GST/HST returns, go to
(GST/HST, payroll deductions, corporation income tax, www.cra.gc.ca/gsthst-filing.
and import/export). Businesses with a physical address in You may also be able to electronically file your return and
Quebec that need a GST account will be automatically make your payment through a participating financial
linked to the Revenu Québec website. For more institution or third-party service provider. Contact your
information, go to www.cra.gc.ca/bro. local branch or service provider to see if they offer this
service, or go to www.cra.gc.ca/gsthst-edi.
Filing returns Note
File your income tax and benefit return using NETFILE Eligible corporation income tax, GST/HST, and
NETFILE is one of our electronic tax-filing options. This information returns can be filed electronically by
service lets you file your income tax return with us using business owners through My Business Account, at
the Internet. You can only send your own return to us using www.cra.gc.ca/mybusinessaccount, or by authorized
NETFILE. Authorized representatives cannot send returns representatives through Represent a Client at
for their clients through NETFILE. When you use this www.cra.gc.ca/representatives.
service, you cannot change any of your personal
information such as your name, address, date of birth, or The GST/HST Registry
direct deposit information.
The GST/HST Registry is an online service that lets you
If you have registered with the My Account service, you or validate the GST/HST number of a business. This ensures
your authorized representative can change your address that claims submitted for input tax credits only include
before using NETFILE by going to GST/HST charged by GST/HST registrants.
www.cra.gc.ca/myaccount.
For more information, go to www.cra.gc.ca/gsthstregistry.

28 www.cra.gc.ca
You can validate a Quebec sales tax (QST) registration Asking for a Canada Pension Plan
number for a person who is registered for the QST, other
than a selected listed financial institution, by accessing the
(CPP) or employment insurance (EI)
QST registry on the Revenu Québec website at ruling
www.revenu.gouv.qc.ca/en/sepf/ You can ask for a ruling on the status of a worker or workers
services/sgp_validation_tvq/default.aspx. under the Canada Pension Plan or the Employment Insurance
Act, using the “Request a CPP/EI ruling” service
Getting help at www.cra.gc.ca/mybusinessaccount, or if you are an
To get help using My Business Account, GST/HST authorized representative at www.cra.gc.ca/representatives.
NETFILE, GST/HST TELEFILE, Information Returns, To ask for a ruling for a given year, you have to send your
Electronic Filing, Represent a Client, and the Payroll request by June 29 of the next year.
Deductions Online Calculator, you or your authorized
representative can call the e-Services Helpdesk at GST/HST rulings and interpretations
1-877-322-7849 or for clients using a teletypewriter (TTY),
You can ask for a written ruling or interpretation on how the
call 1-888-768-0951.
GST/HST applies to your operations or transactions. We will
provide guidance, and as much certainty as possible, about
The following table shows their hours of service: how the GST/HST applies and the consequences of your
transactions or proposed transactions. If you need general
Hours of service information about GST/HST, go to www.cra.gc.ca/gsthst or
call 1-800-959-5525.
Time zone Monday to Friday
We provide our GST/HST rulings and interpretations
Pacific time 3:45 a.m. to 6:00 p.m. service from rulings centres across Canada (except in
Quebec). You or your authorized representative can call us
Mountain time 4:45 a.m. to 7:00 p.m. at 1-800-959-8287. For service in Quebec, call
Central time 5:45 a.m. to 8:00 p.m. Revenu Québec at 1-800-567-4692.

Eastern time 6:45 a.m. to 9:00 p.m. For more information, see Pamphlet RC4405, GST/HST
Rulings – Experts in GST/HST Legislation and GST/HST
Atlantic time 7:45 a.m. to 10:00 p.m. Memorandum 1.4, Excise and GST/HST Rulings and
Newfoundland and Interpretations Service.
Labrador time 8:15 a.m. to 10:30 p.m.
Outside Canada and Excise duty rulings and interpretations
the U.S. (Eastern time) 6:45 a.m. to 9:00 p.m. You can ask for a written ruling or interpretation on how
Teletypewriter (TTY) excise duties apply to certain goods (such as alcohol and
(Eastern time) 6:45 a.m. to 9:00 p.m. tobacco products). For more information, contact a regional
excise duty office. For a listing of their numbers, see Excise
Note Duty Memoranda EDM1-1-2, Regional Excise Duty Offices, at
The e-Services Helpdesk is not available on weekends www.cra.gc.ca/forms.
and statutory or civic holidays.
For help with corporation Internet filing, call Excise taxes and other levies rulings
1-800-959-2803.
and interpretations
For general business enquiries, call 1-800-959-5525. You can ask for a written ruling or interpretation on how
For more information about our electronic services for the excise tax or air travellers security charge applies to
businesses, go to www.cra.gc.ca/businessonline. your operations or transactions. For more information on
requesting an excise tax or other levies ruling, go to
http://www.cra-arc.gc.ca/E/pub/et/contacts/contacts-e.html.
Advance income tax rulings and
interpretations Service Canada
An advance income tax ruling is a written statement to a
We work with other federal agencies and departments to
taxpayer from the Income Tax Rulings Directorate that says
serve Canadians in smaller communities by offering a
how we will interpret and apply Canadian income tax law
variety of government services in single locations called
to transactions a taxpayer is considering. For more
Service Canada centres. For the centre nearest you, visit
information, see Information Circular IC70-6R6, Advance
www.servicecanada.gc.ca.
Income Tax Rulings.

www.cra.gc.ca 29
Scientific research and experimental What is the Voluntary Disclosures
development (SR&ED) investment tax Program?
credit The Voluntary Disclosures Program (VDP) allows you to
We have set up a service to address the needs of come forward and correct inaccurate or incomplete
individuals and businesses that have claimed the SR&ED information or to disclose information you had not
investment tax credit. We regularly hold public information previously reported to us.
sessions to explain the meaning of SR&ED, describe eligible You may avoid penalties and prosecution if you make a
activities, explain what expenditures qualify for the credit, valid disclosure before you become aware of any
and describe the documentation needed for a claim. For compliance action being initiated against you by us. You
more information on this credit and these sessions, go to will only have to pay the taxes owing plus interest.
www.cra.gc.ca/sred or call 1-800-959-5525.
A disclosure is valid if it:
Canada business service centres ■ is voluntary;
These centres provide businesses with access to information ■ contains complete information;
about the programs and services of various federal
■ involves the application or the potential application of a
departments and agencies, including the Canada Revenue
penalty; and
Agency, Industry Canada, and economic development
agencies such as the Atlantic Canada Opportunities ■ generally includes information that is more than one year
Agency, Western Economic Diversification Canada, and overdue.
Canada Economic Development for Quebec Regions. Other
partners include provincial and non-government agencies. The VDP provides an avenue for you to correct past errors
and omissions and become compliant with tax laws.
On the Canada site, www.canada.ca, you can find a list of
links to the websites of Government of Canada For more information, go to www.cra.gc.ca/voluntarydisclosures
departments, agencies, and Crown corporations. You can or see Information Circular IC00 1R4, Voluntary Disclosures
also find links to websites maintained by organizations for Program, or GST/HST Memorandum 16.3, Cancellation or Waiver
which federal departments and agencies are responsible. of Penalties and/or Interest.

Industry Canada Cancel or waive penalties and interest

To access Industry Canada’s extensive expertise and The CRA administers legislation, commonly called the
information resources, visit www.ic.gc.ca. taxpayer relief provisions, that gives discretion to the CRA to
cancel or waive penalties or interest when taxpayers are
unable to meet their tax obligations due to circumstances
Your rights, entitlements, and obligations beyond their control.
The CRA operates on the fundamental belief that taxpayers
are more likely to comply with the law if they are treated fairly Income Tax
and have the information, advice, and services they need to The CRA’s discretion to grant relief is limited to any period
meet their obligations. These obligations may include filing that ended within 10 years before the calendar year in which
required returns, paying taxes, providing information, and a request is submitted or an income tax return is filed.
properly declaring imported or exported goods.
For penalties, the CRA will consider your request only if it
Although we want to make sure you are aware of your relates to a tax year or fiscal period ending in any of the
obligations, we also want to make sure that you understand 10 calendar years before the year in which you make your
and can exercise your rights. request. For example, if you make a request in 2016, it has
to relate to a penalty for a tax year or fiscal period ending in
The Taxpayer Bill of Rights 2006 or later.
The Taxpayer Bill of Rights (TBR) describes and defines 16 For interest on a balance owing for any tax year, the CRA
rights and builds on the CRA's corporate values of will consider only the amounts that accrued during the
professionalism, respect, integrity, and cooperation. It 10 calendar years before the year in which you make your
describes the treatment you are entitled to when you deal request. For example, your request made in 2016 must
with the CRA. The TBR also sets out the CRA Commitment relate to interest that accrued in 2006 or later.
to Small Business to ensure their interactions with the CRA
are conducted as efficiently and effectively as possible. GST/HST
For more information about your rights and what you can The CRA will consider waiving or cancelling interest or
expect when you deal with the CRA, go to cra.gc.ca/rights. penalties related to a reporting period ending in any of the
10 calendar years after the end of that reporting period.
To submit your request for relief, use Form RC4288, Request
for Taxpayer Relief –Cancel or Waive Penalties or Interest.
For more information about relief from penalties or interest,
go to www.cra.gc.ca/taxpayerrelief.

30 www.cra.gc.ca
 Important dates for businesses
Sole proprietorships and partnerships Corporations
Monthly, by Send us the payroll deductions from your Monthly, by Send us the payroll deductions from
the 15th employees’ remuneration, along with your the 15th your employees’ remuneration, along
part of Canada Pension Plan (CPP) with your part of CPP contributions and
contributions and employment insurance EI premiums, by the 15th of the next
(EI) premiums by the 15th of the next month.
month.
Quarterly, by If you are self-employed, make your Monthly Corporations have to pay instalments of
the 15th instalment payments of tax and CPP or their current-year taxes, by the last day
contributions by these dates: Quarterly of each month or each quarter.
1st instalment: March 15
2nd instalment: June 15
3rd instalment: September 15
4th instalment: December 15
Last day of File your T4 and T4A slips along with the Last day of File your T4 and T4A slips along with the
February related Summary form. Distribute the slips February related Summary form. Distribute the
to your employees. slips to your employees.
March 31 If required, partnerships (except those Two months The balance of corporation income tax
made up of corporations, or a from your tax payable is due.
combination of individuals, corporations, year-end
and trusts with different filing dates) must
file a partnership information return before
this date.
April 30 File your income tax and benefit return for Three months For Canadian controlled private
the previous year. Pay any tax amounts from your tax corporations claiming the small business
owing. Self-employed individuals and year-end deduction, the balance of the corporation
their spouses or common-law partners tax payable is due.
have until June 15 to file their returns.
June 15 Self-employed individuals (and their Six months Corporations must file a T2, Corporation
spouses or common-law partners) must from your tax Income Tax Return, no later than
file their income tax and benefit returns by year-end six months after the corporation’s
June 15. However, to avoid interest year-end.
charges, you have to pay any balance
owing by April 30.
December 31 For farmers and fishers, calculate and
pay the amount of your current-year
instalment payment.

Note
It is important that you file required returns and remit payments on time. If you do not file and remit on time, penalties
apply and interest is charged on unpaid taxes and penalties.
To help you remember important business dates, you can use the Business Tax Reminders mobile app. For more
information, go to www.cra.gc.ca/mobileapps.
For more information on important dates, go to www.cra.gc.ca/importantdates.

www.cra.gc.ca 31
 Addresses on our website
Visit our website at www.cra.gc.ca. Below is a list of some useful addresses for small businesses:
Topic website
Aboriginal peoples www.cra.gc.ca/aboriginalpeoples
AgriInvest Program www.agr.gc.ca/agriinvest
AgriStability Program www.agr.gc.ca/agristability
Air Travellers Security Charge www.cra.gc.ca/atsc
Business home page www.cra.gc.ca/business
Business number (BN) registration www.cra.gc.ca/bn
Business Tax Reminders mobile app www.cra.gc.ca/mobileapps
Complaints and disputes www.cra.gc.ca/resolvingdisputes
Conducting business on the Internet (e-commerce) www.cra.gc.ca/ecomm
Contact us www.cra.gc.ca/contact
Contract payment reporting www.cra.gc.ca/contract
Corporation income tax www.cra.gc.ca/t2return
Corporation Internet filing www.cra.gc.ca/corporation-internet
Direct deposit – Business www.cra.gc.ca/dd-bus
Electronic payments www.cra.gc.ca/payments
Electronic mailing lists www.cra.gc.ca/lists
Electronic services www.cra.gc.ca/electronicservices
E-services for businesses www.cra.gc.ca/businessonline
Events and seminars www.cra.gc.ca/events
Excise and GST/HST News www.cra.gc.ca/formspubs/typ/gsthstnws-eng.html
Excise taxes and special levies www.cra.gc.ca/etsl
Frequently asked questions www.cra.gc.ca/faqs
Filing information returns electronically www.cra.gc.ca/iref
Forms and publications www.cra.gc.ca/forms
Forms and publications – Online order forms www.cra.gc.ca/orderforms
GST/HST Information for businesses www.cra.gc.ca/gsthst
GST/HST electronic filing and remitting www.cra.gc.ca/gsthst-edi
Informant Leads Program www.cra.gc.ca/leads
My Business Account www.cra.gc.ca/mybusinessaccount
Payroll www.cra.gc.ca/payroll
Payroll Deductions Online Calculator www.cra.gc.ca/pdoc
Prescribed interest rates www.cra.gc.ca/interestrates
Public holidays and due dates www.cra.gc.ca/duedates
Represent a Client www.cra.gc.ca/representatives
Security options – Taxable benefit www.cra.gc.ca/stockoptions
Service Complaints www.cra.gc.ca/complaints
Small businesses www.cra.gc.ca/smallbusiness
T4 information returns (how to file) www.cra.gc.ca/slips
Taxpayer Bill of Rights www.cra.gc.ca/rights
Taxpayers’ Ombudsman www.oto-boc.gc.ca
Taxpayer relief provisions www.cra.gc.ca/taxpayerrelief
Tax services offices and tax centres www.cra.gc.ca/tso
Tax myths www.cra.gc.ca/myths
Underground economy www.cra.gc.ca/undergroundeconomy
Voluntary Disclosures Program www.cra.gc.ca/voluntarydisclosures
What’s new www.cra.gc.ca/whatsnew

32 www.cra.gc.ca
 Forms and publications
Guides Forms
■ RC17, Taxpayer Bill of Rights Guide: Understanding Your ■ B200, Excise Tax Return
Rights as a Taxpayer
■ B248, Registration Under the Provisions of the Air Travellers
■ RC4015, Reconciliation of Business Income for Tax Purposes Security Charge Act
■ RC4022, General Information for GST/HST Registrants ■ B249, Air Travellers Security Charge Return
■ RC4027, Doing Business in Canada – GST/HST Information ■ B253, Softwood Lumber Products Export Charge –
for Non-Residents Registration Form
■ RC4033, General Application for GST/HST Rebates - Includes ■ B275, Softwood Lumber Products Export Charge Return
Forms GST189, GST288, and GST507
■ B284, Election or Revocation of the Election for Semi-Annual
■ RC4058, Quick Method of Accounting for Reporting
GST/HST - Includes Form GST74
■ CPT100, Appeal of a Ruling under the Canada Pension Plan
■ RC4082, GST/HST Information for Charities and/or Employment Insurance Act
■ RC4110, Employee or Self-Employed? ■ CPT101, Appeal of an Assessment under the Canada Pension
Plan and/or Employment Insurance Act
■ RC4120, Employers’ Guide – Filing the T4 Slip and Summary
■ E413, Notice of Objection (Excise Tax Act)
■ RC4420, Information on CRA – Service Complaints
■ E676, Notice of Objection (Air Travellers Security Charge
■ T4001, Employers’ Guide – Payroll Deductions and
Act)
Remittances
■ E680, Notice of Objection (Excise Act, 2001)
■ T4002, Business and Professional Income
■ GST20, Election for GST/HST Reporting Period
■ T4003, Farming Income
■ GST44, Election Concerning the Acquisition of a Business or
■ T4004, Fishing Income
Part of a Business
■ T4008, Payroll Deductions Supplementary Tables
■ GST70, Election or Revocation of an Election to Change a
■ T4012, T2 Corporation – Income Tax Guide GST/HST Fiscal Year
■ T4032, Payroll Deductions Tables ■ GST159, Notice of Objection (GST/HST)
■ T4036, Rental Income ■ L15, Application for Licence under the Provisions of the Excise
Tax Act
■ T4037, Capital Gains
■ N15, Excise Tax Application for Refund/Rebate
■ T4068, Guide for the Partnership Information Return (T5013
Forms) ■ RC1, Request for a Business Number (BN)
■ T4127-JAN, Payroll Deductions Formulas for Computer ■ RC45, Notice of Objection (Softwood Lumber Products Export
Programs Charge Act, 2006)
■ T4130, Employers’ Guide - Taxable Benefits and Allowances ■ RC59, Business Consent
■ T7B-CORP, Corporation Instalment Guide ■ RC193, Service-Related Complaints
■ RC257, Request for an Information Return Program
Pamphlets, brochures, and slips Account (RZ)
■ P148, Resolving Your Dispute: Objections and Appeal Rights ■ RC366, Direct Deposit Request for Businesses RC4288,
Under the Income Tax Act Request for Taxpayer Relief – Cancel or Waive Penalties or
■ RC2, The Business Number and Your Canada Revenue Interest
Agency Program Accounts ■ T137, Request for Destruction of Records
■ RC4247, The Special Quick Method of Accounting for Public ■ RC4288, Request for Taxpayer Relief – Cancel or Waive
Service Bodies Penalties or Interest
■ RC4405, GST/HST Rulings – Experts in GST/HST ■ T400A, Objection – Income Tax Act
Legislation
■ T1013, Authorizing or Cancelling a Representative
■ T4, Statement of Remuneration Paid
■ T1139, Reconciliation of Business Income for Tax Purposes
■ T4A, Statement of Pension, Retirement, Annuity and Other
Income

www.cra.gc.ca 33
■ T1163, Statement A – AgriStability and AgriInvest Programs Income Tax Folios
Information and Statement of Farming Activities for
■ S1–F5–C1, Related persons and dealing at arm’s length
Individuals
■ T1164, Statement B – AgriStability and AgriInvest Programs Information circulars
Information and Statement of Farming Activities for
Additional Farming Operations ■ IC00-1, Voluntary Disclosures Program

■ T1273, Statement A – Harmonized AgriStability and ■ IC07-1, Taxpayer Relief Provisions

AgriInvest Programs Information and Statement of Farming ■ IC70-6R6, Advance Income Tax Rulings
Activities for Individuals
■ IC76-19R3, Transfer of Property to a Corporation Under
■ T1274, Statement B – Harmonized AgriStability and Section 85
AgriInvest Programs Information and Statement of Farming
Activities for Additional Farming Operations ■ IC78-10R5, Books and Records Retention/Destruction
■ T2042, Statement of Farming Activities ■ IC89-2R3, Directors’ Liability
■ T2121, Statement of Fishing Activities
Excise duty memoranda
■ T2125, Statement of Business or Professional Activities
■ EDM1-1-1, The Excise Duty Program
■ T5013, Statement of Partnership Income
■ EDM1-1-2, Regional Excise Duty Offices
■ TD1, Personal Tax Credits Return
■ EDM2-1-1, Licence Types
■ T2, Corporation Income Tax Return
■ EDM2-3-1, Registration Types
■ T4SUM, Summary of Remuneration Paid
Excise tax and special levies
Interpretation bulletins memoranda
■ IT-99R5-CONSOLID, Legal and Accounting Fees ■ X2-1, Licences
■ IT-154R, Special Reserves ■ X2-2, Small Manufacturers
■ IT-200, Surface Rentals and Farming Operations ■ X2-3, Bonds Given as Security by Licensed Wholesalers
■ IT-273R2, Government Assistance – General Comments ■ X3-1, Goods Subject to Excise Tax
■ IT-291R3, Transfer of Property to a Corporation Under ■ X6-1, Books and Records
Subsection 85(1)
■ X6-2, Returns and Payments
■ IT-364, Commencement of Business Operations
■ IT-413R, Election by Members of a Partnership Under GST/HST memoranda
Subsection 97(2)
■ GST/HST Memorandum 1.4, Excise and GST/HST Rulings
■ IT-417R2, Prepaid Expenses and Deferred Charges and Interpretations Service
■ IT-442R, Bad Debts and Reserves for Doubtful Debts
■ IT-456, Capital Property – Some Adjustments to Cost Base
■ IT-459, Adventure or Concern in the Nature of Trade
■ IT-473R, Inventory Valuation
■ IT478R2, Capital Cost Allowance - Recapture and
Terminal Loss
■ IT-514, Work Space in Home Expenses
■ IT-518R, Food, Beverages, and Entertainment Expenses

34 www.cra.gc.ca
 Online services
My Account Receiving your CRA mail online
Using the CRA’s My Account service is a fast, easy, and You, or your representative (authorized at a level 2), can choose
secure way to access and manage your tax and benefit to receive most of your CRA mail for your business online.
information online, seven days a week. When you or your representative registers for online mail,
To log in to My Account, you can use either your CRA user we will no longer mail most correspondence items. Instead,
ID and password or the Sign-in Partner option. an email notification will be sent to the email address(es)
provided when there is new mail available to view online.
An authorized representative can access most of these To register, select the “Manage online mail” service and
online services through Represent a Client at follow the easy steps.
www.cra.gc.ca/representatives.
Using our online mail service is faster and easier than
For more information, go to www.cra.gc.ca/myaccount. managing paper correspondence.

Handling business taxes online Authorizing the withdrawal of a

Save time using the CRA’s online services for businesses. pre-determined amount from your bank
You can: account
■ authorize a representative, an employee, or a group of Pre-authorized debit (PAD) is an online, self-service,
employees, who has registered with Represent a Client, payment option. Through this option, you agree to
for online access to your business accounts; authorize the CRA to withdraw a pre-determined payment
from your bank account to pay tax on a specific date or
■ request or delete authorization online through dates. You can set up a PAD agreement using the CRA's
Represent a Client, if you are a representative; secure My Business Account service at
■ change mailing and physical addresses, as well as the www.cra.gc.ca/mybusinessaccount. PADs are flexible and
address where you keep your books and records; managed by you. You can view historical records, modify,
cancel, or skip a payment.
■ file a return electronically without a web access code;
For more information, go to www.canada.ca/payments and
■ register for online mail, get email notifications, and view select “Pre-authorized debit.”
your mail online;
■ enrol for direct deposit, update banking information, and MyCRA – the web app for individual
view direct deposit transactions; taxpayers on the go
■ authorize the withdrawal of a pre-determined amount Getting ready to file? Use MyCRA to check your RRSP
from your bank account; deduction limits, look up a local tax preparer, or see what
■ request additional remittance vouchers; tax filing software the CRA has certified.

■ transfer payments and immediately view updated Done filing? Use MyCRA to see the status of your tax
balances, without having to calculate interest; return and the resulting assessment.

■ stop or restart the mailing of the GST/HST return for Want information throughout the year? Use MyCRA to
registrants package; check your TFSA contribution room, confirm before you
donate that the charity at your door is registered, and
■ add another business to your profile; calculate the effect your donation will have on your taxes.
■ view answers to common enquiries, and if needed, To get more details on what you can do with MyCRA and
submit account-related enquiries; to access the CRA’s web-based mobile app, go to
■ view the account balance and instalment balance, www.cra.gc.ca/mobileapps.
including the corresponding transactions (for example,
payments); and Electronic payments
■ do much more. Make your payment using:
To register or log in to our online services, go to: ■ your financial institution’s online or telephone banking
services;
■ www.cra.gc.ca/mybusinessaccount, if you are a business
owner; or ■ the CRA’s My Payment service at
www.cra.gc.ca/mypayment; or
■ www.cra.gc.ca/representatives, if you are an authorized
representative or employee. ■ pre-authorized debit at
www.cra.gc.ca/mybusinessaccount.
For more information, go to
www.cra.gc.ca/businessonline. For more information on all payment options, go to
www.canada.ca/payments.

www.cra.gc.ca 35
 For more information
What if you need help? Service complaints
If you need more information after reading this guide, go
You can expect to be treated fairly under clear and
to www.cra.gc.ca/smallbusiness or call 1-800-959-5525.
established rules, and get a high level of service each time
you deal with the Canada Revenue Agency (CRA); see the
Direct deposit Taxpayer Bill of Rights.
Direct deposit is a faster, more convenient, reliable, and If you are not satisfied with the service you received, try to
secure way to get your income tax refund directly into your resolve the matter with the CRA employee you have been
account at a financial institution in Canada. dealing with or call the telephone number provided in the
To enrol for direct deposit or to update your banking CRA’s correspondence. If you do not have contact
information, go to www.cra.gc.ca/directdeposit. information, go to www.cra.gc.ca/contact.
If you still disagree with the way your concerns were
Forms and publications addressed, you can ask to discuss the matter with the
employee’s supervisor.
To get our forms or publications, go
to www.cra.gc.ca/forms or call 1-800-959-5525. If you are still not satisfied, you can file a service complaint
by filling out Form RC193, Service-Related Complaint.
Electronic mailing lists If the CRA has not resolved your service-related complaint,
We can notify you by email when new information on you can submit a complaint with the Office of the
a subject of interest to you is available on our website. To Taxpayers’ Ombudsman.
subscribe to our electronic mailing lists, go For more information, go to www.cra.gc.ca/complaints.
to www.cra.gc.ca/lists.
Reprisal complaint
Tax Information Phone Service (TIPS)
If you believe that you have experienced reprisal, fill out
For personal and general tax information by telephone, use Form RC459, Reprisal Complaint.
our automated service, TIPS, by calling 1-800-267-6999.
For more information about reprisal complaints, go to
www.cra.gc.ca/reprisalcomplaints.
Teletypewriter (TTY) users
TTY users can call 1-800-665-0354 for bilingual assistance Tax information videos
during regular business hours.
We have a number of tax information videos for
small businesses on topics such as business income and
expenses, GST/HST, and payroll. To watch our videos, go
to www.cra.gc.ca/videogallery.

36 www.cra.gc.ca