Question for the accountants
Oct 13th 2006 | 9:12 am
#16
BE Forum Addict
Joined: Apr 2005
Posts: 3,192
From: The Republic of Bacon
Re: Question for the accountants
Originally Posted by Souvenir
Thanks for that. It sounds as if my tax situation would not change dramatically. As things stand, I'm already an offshore employee of the company and file my taxes in Canada.
Would the CGT be calculated on the nominal value of the shares or on the value of the company (my stake would not be a trivial one in % terms)?
Would the CGT be calculated on the nominal value of the shares or on the value of the company (my stake would not be a trivial one in % terms)?
According to the CCRA:
Quote: "If you receive interest or dividend income from another country, you have to report this income in Canadian dollars. Use the exchange rate that was in effect on the day you received the income. If you received the income at different times during the year, use the average annual exchange rate. The average monthly rate as well as the daily rate are available by accessing the Bank of Canada web site.
If you paid foreign taxes on your interest or dividend income, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes (see lines 431 and 433). Do not subtract the taxes from your income when you report it." End quote.
Link: http://www.cra-arc.gc.ca/tax/individ...foreign-e.html
The only down side to getting dividends from business, is the darned tax man assumes you'll get the same the following, and subsequent years and expects you to pay tax instalments based on that, even though it may never happen again!
We got an assessment from CCRA demanding an instalment of $15,000 (by the end of the month) based on some unusually large dividends from last year!! Sure we'd get it back eventually, but they seem to expect you to have that sort of cash lying around to just give to them! (not to mention at very short notice!)
Then of course, they want the same every quarter for the remainder of the tax year
Oct 13th 2006 | 9:21 am
#17
Thread Starter
Joined: Apr 2005
Posts: 9,606
Re: Question for the accountants
Originally Posted by Calgal
Rule of thumb: Resident in Canada = taxable on worldwide income - the reason Howard Hughes left Canada.
According to the CCRA:
Quote: "If you receive interest or dividend income from another country, you have to report this income in Canadian dollars. Use the exchange rate that was in effect on the day you received the income. If you received the income at different times during the year, use the average annual exchange rate. The average monthly rate as well as the daily rate are available by accessing the Bank of Canada web site.
If you paid foreign taxes on your interest or dividend income, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes (see lines 431 and 433). Do not subtract the taxes from your income when you report it." End quote.
Link: http://www.cra-arc.gc.ca/tax/individ...foreign-e.html
The only down side to getting dividends from business, is the darned tax man assumes you'll get the same the following, and subsequent years and expects you to pay tax instalments based on that, even though it may never happen again!
We got an assessment from CCRA demanding an instalment of $15,000 (by the end of the month) based on some unusually large dividends from last year!! Sure we'd get it back eventually, but they seem to expect you to have that sort of cash lying around to just give to them! (not to mention at very short notice!) Then of course, they want the same every quarter for the remainder of the tax year
According to the CCRA:
Quote: "If you receive interest or dividend income from another country, you have to report this income in Canadian dollars. Use the exchange rate that was in effect on the day you received the income. If you received the income at different times during the year, use the average annual exchange rate. The average monthly rate as well as the daily rate are available by accessing the Bank of Canada web site.
If you paid foreign taxes on your interest or dividend income, you may be able to claim a foreign tax credit when you calculate your federal and provincial or territorial taxes (see lines 431 and 433). Do not subtract the taxes from your income when you report it." End quote.
Link: http://www.cra-arc.gc.ca/tax/individ...foreign-e.html
The only down side to getting dividends from business, is the darned tax man assumes you'll get the same the following, and subsequent years and expects you to pay tax instalments based on that, even though it may never happen again!
We got an assessment from CCRA demanding an instalment of $15,000 (by the end of the month) based on some unusually large dividends from last year!! Sure we'd get it back eventually, but they seem to expect you to have that sort of cash lying around to just give to them! (not to mention at very short notice!)
Then of course, they want the same every quarter for the remainder of the tax year Thanks again for more helpful stuff. We can get off the tax stuff, though. I'm already doing that (and dream of only paying $15k per quarter in installments). You can request an adjustment of your installments, by the way.
My main interest is in the day to day practicalities/pains of being here and being a director there.
Oct 13th 2006 | 9:29 am
#18
BE Forum Addict
Joined: Apr 2005
Posts: 3,192
From: The Republic of Bacon
Re: Question for the accountants
Originally Posted by Souvenir
Thanks again for more helpful stuff. We can get off the tax stuff, though. I'm already doing that (and dream of only paying $15k per quarter in installments). You can request an adjustment of your installments, by the way.
My main interest is in the day to day practicalities/pains of being here and being a director there.
My main interest is in the day to day practicalities/pains of being here and being a director there.
)That $15k is ONLY for dividend income though, and on top of all the regular stuff. It came as a bit if a shock, that's all. We have received dividends pretty much annually (not foreign, I hasten to add), but never had a demand for additional installments.
