Cross Border Tax Consultants

Are you confused about Canadian Income Tax Rules? Should you be reporting your foreign rental income in Canada? Well, let us find out. Regarding reporting rental income for Canadian income tax purposes, foreign and domestic rental income are regarded equally. A Canadian taxpayer must therefore reveal all of their worldwide income. What if the cost of foreign properties is more than $100,000 CAD? Then you must fill out the T1135 form, which is also known as the foreign income verification statement. Continue reading to learn more.     How to Report Foreign Rental Income? • To report your foreign rental income while filing income tax returns in Canada, fill out the T776 Form, also known as the Statement of Real Estate Rentals. • Keep in mind that your international rental income must be reported in Canadian dollars • To avoid double taxation, income taxes paid to the foreign jurisdiction on rental income can be claimed as a foreign tax credit on the taxpayer's Canadian incom...

Are you incorporated? Great idea! You can access lower tax rates with your corporation and pay less tax. For more than ten years, Maroof HS CPA Professional Corporation has been productively aiding clients with their Canadian small business & corporate tax needs.     Who need to file a corporate tax return? All corporations, tax exempt, non-profit and inactive corporations, needs to file a tax return every year even if there’s no tax payable! It’s a criminal act not to file a corporate tax return. A non-resident corporation need to file a T2 return if, at any time in the year, it performed business in Canada, it had a taxable money gain, or in some scenarios, it disposed of taxable Canadian property. When do you need to file your corporate tax return? File your corporate income tax return inside 6 months of the end of every tax year. The tax year of a corporation is its financial period. When the tax year of the corporation ends on the last day of a month, file the corpor...

If you are looking to hire a business plan writer, you have come to the right place. Hiring a business plan writing service will let you more quickly & expertly prepare your business plan. But before appointing someone, you must know the characteristics of preparing an excellent business plan and the credentials of the business plan writer. Characteristics of creating an excellent business plan: Preparing a great business plan encompasses several aspects. The first is without any doubt market research. You have to do substantial research in the following areas: • Customer research: Studying who your target audiences are and their wants and needs. • Industry research: Recognizing your market size and trends affecting it. • Competitive research: Figuring out your direct and indirect competitors and the weaknesses and strengths of each. • Financial research: Apprehending genuine growth rates and costs, so a sensible financial model can be devised. Strategy is the second aspec...

What’s the purpose of a business plan & why are business plans so critical? Here in this post, we have stated our top 10 reasons why you need a business plan in 2021. To prove that you are serious regarding your business: A formal business plan is essential to show all involved parties – investors, partners, employees, and yourself – that you’re committed to building the business. Making your plan pushes you to think through and pick the strategies that’ll impel your growth. To better analyze your competition: Preparing the business plan propels you to assess the competition. All businesses have competition in the form of either direct or indirect competitors, and it’s vital to apprehend your organization’s competitive advantages. And if you don’t have any competitive advantages at present, a business plan helps you find out what you must do to gain them. To get an in-depth customer analysis: A thorough customer analysis is indispensable to an efficient business plan & a boo...

When it comes to moving to a foreign country, there’re many tax concerns that has to be reassessed which could significantly impact your cash flow position at the move. Every resident of Canada is subject to Canadian income tax on his or her own worldwide income. That means that a Canadian resident has to report not just their Canadian source income, but also all other sources of income from outside Canada. When emigrating from Canada , you will become a non-resident of Canada by filing a final Canadian income tax return for the year of emigration, also known as emigrant tax return. If this is the scenario, you’d no longer be needed to pay income tax on any income that are foreign sourced O(after emigration). You’ll still be needed to pay Canadian income tax on particular Canadian sourced income, which will be dependent on the country in which you want to dwell and the treaty between that country and Canada.   Filing a departure income tax return for the year of immigration can be...

The cryptocurrency has become a mainstream investment activity for many in recent years. Many people who held the bitcoins long ago have drastic gains when they disposed off the bitcoins at the peak in 2020. Canada Revenue Agency require all the taxpayers to report gains or losses from transactions in cryptocurrencies. During pandemic, many young investors have used their savings or benefits to buy cryptocurrencies. At end of the year, they are struggling to file taxes. Recently Canada Revenue Agency in Canada and the Internal revenue Service in the United States have joined their forces to detect the taxpayers who are hiding their income from dealings in cryptocurrencies. Taxpayers are misguided that they can hide their income from taxman if they deal in cryptos because there is no public record. That’s not true anymore. The public ledger and other sources can help taxman figure out your non compliance. Due to the cross border information exchange and tax intelligence, more and mo...

Canada taxes cryptocurrencies such as Bitcoin as a commodity. Depending on our circumstances, the resulting income is taxed as a business income or capital gain on your personal income tax return. If you hold bitcoin or other cryptocurrencies as a Capital asset, the result is going to be a Capital gain or loss. Such a gain or loss is included only half in your income. If you are running a crypto business such as trading as a day trader and have huge volumes of transactions, CRA will say it’s a business income. Soits important to consult some tax professional to determine if you are running a business or holding capital assets. If you are a cryptocurrency miner you are definitely running a business and you can treat income as a business income. Business income can be offset against other business losses as well, even your employment income. When you are running a business, you are entitled to all the deductions a business will be ordinarily allowed. Some of these transactions can ...

In Canada, every year many taxpayers go to file their individual income tax returns and are shocked to find that a tax return has already been filed for them! Some innocent Canadians, additionally, get fake calls from cybercriminals who impersonate as tax officials. Sadly, Tax frauds are increasing in number everyday. According to the Canadian Anti-fraud Centre, about 45,000 people became victims of cybercrimes and lost around $96 million in 2019. Even then, a big number of Canadians still take this easy and ignore certain facts about e-filing tax returns. CRA has deactivated 800,000 accounts in order to protect the information of the taxpayers whose credentials are for sale on the dark web. The cybercriminals make all these efforts for taking benefits’ payments and refunds of targeted taxpayers. They are making impersonation scams, malware, and phishing schemes. They are striving to steal the confidential information of many Canadians and Residents. If you don’t want to suffer whil...

  Americans have been moving to Canada like never before, especially in 2020. This is really important that as a U.S. Citizen you familiarize yourself with tax obligations. The U.S. taxes its citizens and permanent residents on world-wide income no matter wherever they reside. Canada taxes its residents (not citizens) on their worldwide income. Therefore, Americans in Canada must file both U.S. and Canadian income tax returns. Filing income tax returns in both countries result in some double taxation issues. Fortunately, the U.S. Canada tax treaty provides relief from the double taxation. As the tax rates are higher in Canada it results in the lower to no taxes owing in the U.S. This is important to know that U.S. citizens are subject to two important foreign assets reporting regime: FATCA and FBAR. If you meet certain thresholds you must file FINCEN 114 and 8938 to ensure compliance. If you fail, penalties are outrageously steep. TFSAs and RESPs are not taxable in Canada however...

  This is very common for the employers to avoid expenses by asking their employees to sign contracts as corporations in Canada. If you are an IT professional in Canada and your employer has asked you to incorporate a business and sign the contract, you must know the tax implications of these decisions. When a corporation has an incorporated-employee who performs services on its behalf, it is called Personal Services Business (PSB) as per Income Tax Act in Canada. First, see if your relationship is of employee or independent contactor with the business for whom you are providing these services. IF the relationship is of employment nature, your corporation will be a PSB. If the relationship is of independent contractor, you have an active business income. Now, determining whether the relationship is employee or contractor, is a fact based exercise. Simply signing a contract and saying it is a contractor is not enough. A brilliant article written by Maroof H. Sabri provides a basic...

Canada needs immigrants! Immigration plays a critical role in the Canadian economy. That is why there are multiple immigration programs by different provinces and territories in Canada. Each of these programs have their own requirements based on their local needs. Almost always, business immigration to Canada needs a business concept and business plan. Some of the programs require you to submit business concept in the first stage and a business plan in the second stage. The province evaluates the business concept and business plan and assign a score based on the pre-established criteria. Such a criteria is already published by them. Therefore, it is critical that you read all those guidelines so that you can get the maximum score. A valuable post written by Maroof HS CPA Professional Corporation on how to write a killer business plan for immigration can be found here . They also provide a comprehensive business plan writing service for immigration to Canada. As explained by the pro...

 Not sure where to set up your research centre? Canada might be your go-to. For a while, Silicon Valley in the United States has been a Research and Development hub in the World. But, it may no more be the same. Bloomberg's September 2020 report emphasizes the problems with R&D incentives in the States and why businesses are moving their R&D centres to Canada. But why are foreign businesses setting up their R&D centres in Canada? Canada offers generous R&D Tax Incentives. As a young entrepreneur, setting up a business is no easy feat, but if it's in Canada, you're in for plenty of benefits. By international standards, Canada provides the most attractive R&D treatment. Though the U.S. is one of the top tech hubs since the tax systems are not so generous as that of Canada, there is a drastic shift and a new trend in the way businesses are setting up their R&D centres. Factors such as high business taxes, corporate culture, cost of living, and vari...

    No doubt, Canada is one of the top destinations for business immigration. There are many reasons for businesses to move to Canada. Whether you are looking for a politically and economically stable country, proximity to the United States, an OECD country or the next generation global leader in Research and Development – Canada is the place to be! Canada’s attractiveness makes it an ideal immigration destination for individuals who are running successful businesses in their home countries. Here comes the challenging part: How to immigrate to Canada under a business or investor visa? Well, the immigration process is not that simple and you will be needing a licensed immigration consultant in Canada. (We can recommend the one, but we do not prefer to mention here). In the application process, usually, most of the provinces require to submit the business concept and later on a detailed business plan. This is where a lot of entrepreneurs and investors lose their chances desp...

    The United States uses a Substantial Presence Test (SPT) to determine if an individual needs to report its income to the IRS. When you spend so much time, even without undertaking any economic activity. Substantial presence test (SPT) uses a specified formula to determine the number of days in current and two preceding years. Add the below and if the result is equal to or more than 183 days, you need to file a U.S. income tax return. 1. Total number of days in the current year – 1X 2. Total number of days in the first preceding year – 1/3X 3. Total number of days in the second preceding year – 1/6X If you spend a minimum of 31 days in the current year and the result of the above formula is equal to or more than 183, you have met the SPT. For Canadians spending winter in the United States, it's very easy to meet this substantial presence test and become subject to U.S. income tax. Relief for Canadian Snowbirds from U.S. Taxes If you spend less than 183 days in th...

What is “notice to reader financial statements”? Financial statements of a business show the financial position and performance of that business over a certain period. Generally, there are three financial statements: 1. Balance sheet: Also knows a statement of financial position 2. Income Statement: Also knows as a statement of financial performance 3. Cash flow statement Notes are often attached with these financial statements, however, if you are a small business the management may decide to not prepare them. In all cases, a balance sheet and an income statement must be attached. Notice-to-reader refers to a notice, signed by a registered CPA firm, cautions the readers of these financial statements about the level of involvement of the professional accounting firm. Further, you can use either Accounting standards for private enterprises (ASPE), or International Financial Reporting Standards (IFRS) in Canada. Read more about Notice-to-Reader Financial Statements here . Who ...