Based in Toronto, CA, Stuart Bollefer delivers knowledgable tax investment advice across a range of clients. Well versed in Canada Revenue Agency (CRA) regulations, Stuart Bollefer has a knowledge of strategies companies employ in optimizing taxes.
One 2022 CRA bulletin brought focus to the limitations personal services businesses (PSBs) face in claiming expenses and other tax deductions, compared with other companies. The example given is one in which a man is offered a 12-month contract position with full-time hours at a trucking company. In this situation the worker may set up a numbered company that has him as the only employer and shareholder, and ABC Trucking as the only client. This numbered company may either keep funds within the business or distribute them to the driver. What this driver may not realize is that the numbered company functions as a personal services business, which involves a T2 tax form. The expenses that may be deducted are limited to wages, salaries, and benefits, as well as specific corporate legal and other expenses. Reflecting a lack of compliance with this regulation, the CRA is contacting companies within sectors in which PSBs are used, and requesting documentation of specific payer and payee relationships. With no legal actions expected to result, the CRA's focus is on making sure that companies correct errors and ensure that compliance mandates are met.
0 Comments
Leave a Reply. |
AuthorExperienced Toronto Attorney Stuart Bollefer. Archives
September 2022
Categories |