Ch. 3 - Tax Administration Flashcards
Filing Requirements: Filing Deadline
- Individual
- Corporation
- Individuals
a. April 30th for general filers
b. June 15th if either the taxpayer or spouse has business income
c. later of 6 months after date of death and normal filing deadline if the taxpayer passed away in the year - Corporations
a. six months after year-end
Filing Requirements: Payment Due Date
- Individual
- Corporation
- Individuals
a. April 30th for all - Corporations
a. two months after year-end for general corporations
b. three months after year-end for CCPCs
Instalments for Individuals:
- required if
- payment due dates
- calculations
- current year (estimated) and one of two prior years have taxes payable over $3,000
- Due the 15th of Mar, June, Sept, Dec
- pay the least of
i. 1/4 x estimated payable for current year
ii. 1/4 x payable in the immediately preceding year
iii. first two: 1/4 x second preceding year ; last two: 1/2 x (preceding year - preceding amounts paid)
Instalments for Corporations (non CCPC):
- required if
- Payments due when
- calculation
- if current year (estimated) and prior year taxes are over $3K
- monthly
- Calculation:
a. 1/12 x estimated CY taxes
b. 1/12 x PY taxes
c. first two: 1/12 x tax payable for second preceding year; last 10: 1/10 x (PY tax -first two instalments paid)
Instalments for Corporations (small CCPCs): 1. what is small CCPC 2. required when 3. calculation
- small CCPC criteria
a. taxable income under $500K in current and PY
b. taxable capital below $10M
c. claimed SBD in CY or PY
d. perfect PY payment history - quarterly for tax year
- Calculation
a. 1/4 x estimated CY tax
b. 1/4 x PY taxes
c. first: 1/4 x second preceding year; last three: 1/3 x (PY taxes - first pmnt)
Interest and Penalties: Interest on Missed Payment Deadline
- interest on taxes owing at prescribed rate + 4%
- compounded daily until paid
Interest and Penalties: Late or Deficient Instalments
- Interest
- Penalties
- prescribed rate + 4%
- penalty of 50% of the greater of:
i. $1,000 and
ii. 25% of the interest that would be payable if no instalments had been made
Interest and Penalties: Interest on Refunds Owed to Taxpayers (Individuals)
- amount
- timing
- interest = refund x (prescribed rate + 2%)
- interest starts from the latest of:
i. 30 days after due date
ii. 30 days after filing done
iii. the day on which the overpayment arose
Interest and Penalties: Interest on Refunds Owing to Taxpayers (Corporations)
- amount
- timing
- interest = refund x prescribed rate
- starts at the latest of the following dates:
i. 120 days after tax YE
ii. 30 days after filing done
iii. the day on which overpayment arose
Interest and Penalties: Failure to File by Due Date
- 1st occurrence
- subsequent occurrences
- large corporations
- penalty is total of:
i. 5% of unpaid tax
ii. 1% x unpaid tax x number of months return is outstanding (no more than 12) - penalty is total of:
i. 10% x unpaid tax
ii. 2% x unpaid tax x number of months outstanding (no more than 20) - additional penalty of 0.0005% per month x taxable capital
Notice of Assessment: Possible Reassessment Period by CRA
- Individuals
- Corporations
i. non CCPC
ii. CCPC
- can reassess up to 3 years
- i. can reassess up to 4 years
ii. can reassess up to 3 years
Notice of Objection and Appeal: NOA disagreement (first attempt)
- timing
- done with who
- Timing
a. Individuals are later of
i. one year after filing due date
ii. 90 days after the date of the mailing of NOA
b. Corporations 90 days after mailing of NOA - with CRA
Notice of Objection and Appeal: NOA disagreement (second attempt)
- with who
- timing
- Tax Court of Canada
2. made within 90 days of mailing of reply to objection
Notice of Objection and Appeal: NOA disagreement (third attempt)
- with who
- timing
- Federal Court of Appeal
2. made within 30 days of decision of Tax Court of Canada
