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Taxation Info-GuideLast Verified:
2006-08-03
What is an Info-Guide?The Canada/Manitoba Business Service Centre created Info-Guides to help you navigate through the wide range of programs and services in a specific area as well as related regulations that may affect your business venture. Info-Guides featuring other topics of interest are also available by contacting the Canada/Manitoba Business Service Centre at 204-984-2272 (in Winnipeg) or 1-800-665-2019 (toll free in Canada) or by e-mail at http://www.cbsc.org/manitoba TABLE OF CONTENTS
Financial Assistance
Scientific Research and Experimental Development (SR&ED;) Program Offers income tax incentives to Canadians who conduct scientific research and experimental development (SR&ED) in Canada. Investment tax credits are available for expenditures such as wages, materials, machinery, equipment, some overhead, and SR&ED contracts. Canadian-controlled private corporations with less than $200,000 of taxable income can receive a refundable investment tax credit of up to 35% (enriched rate) for qualifying SR&ED expenses. Other Canadian corporations, proprietorships, partnerships and trusts can receive an investment tax credit of up to 20% for qualifying SR&ED expenditures. Information ServicesAre You an Employee or Self-Employed?Canada Revenue Agency - CRA Phone: Toll free 1-800-959-5525 (english) or 1-800-959-7775 (french) Forms & Publications: 1-800-959-2221 Internet: http://www.cra-arc.gc.ca/E/pub/tg/rc4110 To determine if a worker is an employee or a self-employed individual, and thus if there is an employer-employee relationship or a business relationship, you have to examine and analyze the terms and conditions of the worker's employment as they relate to the following four factors:
These factors are detailed in CRA's publication Employee or Self-Employed? You can order this publication from their website or by phone as noted above.
Business Window Provides one-stop service at the counter, by telephone or fax, for the four Business Number (BN) accounts (corporate income tax, import/export, payroll deductions and GST). Business Window staff can also put business clients in touch with the right contact for other Revenue Canada Agency business programs.
Corporation Internet Filing The Corporation Internet Filing initiative provides the client with an easy-to-use, convenient, secure and confidential option for filing your corporation income tax return. To use this option, corporations must meet the following eligibility criteria: be a resident of Canada; not be involved in Scientific Research and Experimental Development activities; not be an insurance company; not be filing a return that is in its first year after an amalgamation; not have a windup of a subsidiary. You will be required to use CRA-certified software. There may be a cost for you to purchase a tax preparation software package, but the Corporation Internet Filing service is free.
Finance and Taxation Information for Enterprises
Guide for Canadian Small Businesses An easy-to-read publication that provides useful information on a broad range of issues. The guide is targeted primarily at new and prospective businesses. It provides a comprehensive overview of tax and customs related information. Some of the information contained in the guide are: setting up a business; the goods and services tax/harmonized sales tax; excise taxes and duties; importing and exporting; payroll deductions; income tax; audits; objections and appeals; and how to get information from the Canada Revenue Agency. To order the publication, call the toll free number listed above or access it through the Internet. The publication is also available in braille and large print, on audio cassette, and on computer diskette.
New Employer Visits Canada Revenue Agency offers personalized visits to new employers to help them by providing information and assistance with recording, withholding or reporting requirements for employee earnings, income tax, Canada Pension Plan, or Employment Insurance contributions, to ensure they understand their legal obligations and responsibilities as employers. These visits are not audits and are offered as an educational service.
Regulating Tax Rebate Discounting Businesses The Tax Rebate Discounting Act regulates tax discounting businesses. The Act is designed to protect consumers who choose to use a discounting service to get cash now rather than wait for a future income tax refund.
Small Business Information Seminar Topics covered in this 3 hour seminar: How to keep books and records; Types of income to report and expenses to claim; Filing requirements; Rights and obligations. Tax Services
Business Number - BN The Business Number (BN) is a reference numbering system that replaces the multiple numbers businesses need to deal with government. The BN is designed to help businesses reduce costs and increase competitiveness; it also increases government efficiency and helps it deliver one-stop service at Business Windows. Canadian businesses that register for one or more of the following accounts will receive a BN - Corporate Income Tax, Importer/Exporter account number; Payroll (source) deductions (Trust Accounts); Goods and Services Tax/Harmonized Sales Tax (GST/HST). Objections and Appeals - Income Tax Act/Excise Tax ActCanada Revenue Agency - CRA Phone: Toll free 1-800-959-5525 (english) or 1-800-959-7775 (french) Internet: http://www.cra-arc.gc.ca/E/pub/gm/31-0/ Allows taxpayers to formally dispute an assessment for income tax, excise tax or GST/HST. Certain restrictions apply, including time limits. Contact your local Business Window office for more details.
TeleReply A new electronic reply service for payroll deductions. Employers can inform CRA by phone if they have no payroll dedutions remittance to make during a remittance period. This service is fast, free and easy to use. It is available every day except Sundays and statutory holidays. You don't have to mail in a printed remittance voucher, and your reply is processed faster. As well, you'll receive immediate confirmation that your reply has been received. Tax Information for BusinessesBusiness Assessment and Taxation Business owners are required to pay a percentage of the assessed rental value of their premises as determined by the City Assessor. Home based businesses are exempt from business assessment, however, they must pay for a license in lieu of business tax (contact the City of Winnipeg License Branch at 204-986-4663, for more information). For businesses located outside of Winnipeg, please contact your local municipal office for assessment and taxation requirements. Corporation Capital Tax A tax paid by corporations that have a permanent establishment in Manitoba with total paid-up capital of $5,000,000 or greater.
Excise Taxes and Excise Duties Excise Duties are charged on spirits, beer, wine and tobacco products manufactured in Canada. The duty is charged on goods at the point of manufacture rather than sale and is based on the quantity of goods produced. Excise Tax is applied to items such as certain petroleum products, jewellery, heavy automobiles (not trucks) and automotive air conditioners. The excise tax is set at either a specific rate or as a percentage of the manufacturer's sale price, and is in addition to the GST. Persons who manufacture or produce excise taxable goods, the value of which exceeds $50,000 per calendar year, are required to obtain an Excise Tax License. A Wholesaler License can also be obtained in certain circumstances. This allows for the purchase and resale of these goods and permits the wholesaler to collect the tax at the point of sale instead of paying it upfront.
Goods and Services Tax and Harmonized Sales Tax - GST/HST Most persons and organizations engaged in commercial activities in Canada who have annual worldwide, taxable sales of more than $30,000, must register for and collect GST/HST. However, certain products, services and organizations are exempt from the GST. Check with the department above for more information. All taxi operators must register for GST/HST, regardless of their revenues.
Income Tax Returns - T1 General Income Tax and Benefit Return All individual residents living in Canada or individuals who earn an income in Canada must file a tax return. When used in conjunction with supplementary guides such as Business and Professional Income, Farming Income, Fishing Income the General Income Tax and Benefit package allows non-incorporated business people to report their income.
Income Tax Returns - the T2 Corporate Income Tax Return and the T2 Short Return Under the Income Tax Act, all corporations must file a T2 or T2 Short return even if no tax is payable. This includes non-profit organizations, tax-exempt corporations, and inactive corporations. The only exception to this rule are corporations which fell within the guidelines of a registered charity for the fiscal year. Provincial Taxes Wholesalers, retailers, dealers, operators and others whose business involvements relate to: gasoline, propane, diesel and heating fuel, electricity, natural and manufactured gas, coal, interprovincial trucking, tobacco products, and pari-mutuel betting may be subject to additional taxes. Please contact Manitoba Finance for more information. Retail Sales Tax Any person carrying on a business in Manitoba must have a valid Retail Sales Tax (RST) number issued under The Retail Sales Tax Act before making any taxable sales in the province. Tax Information for EmployersEmployment Insurance, Canada Pension Plan, and Employee's Income Tax All employers are required by law to deduct Employment Insurance Premiums, Canada Pension Plan contributions, and Income Tax from remuneration paid to employees. See information on the Business Number to register. Self-employed individuals are required to submit Income Tax and Canada Pension Plan contributions in quarterly installments. If it is uncertain whether an employee-employer relationship exists, a ruling can be obtained from Canada Revenue Agency. Payroll Tax (Health and Post Secondary Education Tax Levy) Employers with a permanent Manitoba establishment pay this tax on employees' salaries. Some exemptions apply.
Social Insurance Number - SIN A unique nine digit number assigned to an individual for use in the administration of programs, namely, Employment Insurance and the Canada Pension Plan. Employers who want to remit income tax deductions and premiums based on an employee's income must ensure that the employee produces a SIN card within three days after being hired.
Tables on Diskette - Payroll Deductions An electronic version of the payroll deduction tables which calculate the Income Tax, Canada Pension Plan and Employment Insurance contributions that Canada Revenue Agency requires an employer to withhold from an employee's income. There is no charge for this product.
Trust Accounts Division The division handles the enforcement and some collection activities related to withholding, remitting and reporting requirements of the Income Tax Act, the Canada Pension Plan, the Employment Insurance Act and the Excise Tax Act. Tax Information for Non-Profit Organizations
Information on Charities Canada Revenue Agency - CRA 325 Broadway, Winnipeg, MB R3C 4T4 Phone: Toll free 1-800-959-5525 (english) or 1-800-959-7775 (french) Forms & Publications - 1-800-959-2221 Internet: http://www.cra.gc.ca/E/pbg/tf/t1044/README.html Available to organizations claiming non-profit status under paragraph 149(1)(I) of the Income Tax Act as well as agricultural organizations, boards of trade or chambers of commerce as described in paragraph 149(1)(e) of the Act. More information is available in the publication Income Tax Guide to Non-Profit Organization (NPO) Information Return. To obtain a copy, contact Canada Revenue Agency or access it through the internet site listed above. Canada/Manitoba Business Service Centre 250 - 240 Graham Ave P.O. Box 2609 Winnipeg, Manitoba R3C 4B3 Canada Telephone: 204-984-2272 Fax: 204-983-3852 Toll-free (information): 1-800-665-2019 TTY Toll-free (hearing impaired): 1-800-457-8466 TTY (hearing impaired): 1-800-457-8466 E-mail: manitoba@cbsc.ic.gc.ca Web site: http://www.cbsc.org/manitoba Hours of operation: 8:00 a.m. to 5:00 p.m. Monday to Friday
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