Accounting and tax

    legal considerations for companies in Canada

  1. Corporate tax in Canada is levied at the federal (15%) and provincial (3% – 16%) level. The average tax rate is approximately 27%;
  2. Branch offices, however, must pay an additional remittance tax of 25%;
  3. The rate of VAT and frequency of filings vary according to the provinces. The average rate approximates 10%, while the filings can be monthly, quarterly or monthly, depending on the province in which the business is incorporated;
  4. Only 50 % of the amount of capital gains less capital losses is considered taxable in Canada;
  5. Dividend payments, interest payments and royalty payments are subject to a 25% withholding tax in Canada;
  6. Trading and capital losses can both be carried back for 3 years. However, while trading losses can only be carried forward for 20 years, capital losses can be carried forward indefinitely;
  7. Companies incorporated in Manitoba, Newfoundland, Northwest Territories, Nunavat, Ontario and Quebec pay an additional payroll tax, averaging 3.5%;
  8. Resident companies must file their tax returns within 6 months after the end of the accounting year. Please note, all companies must file their returns individually as consolidated returns are not permitted;
  9. Canada has signed DTAs with 95 countries including Australia, China, Singapore, South Africa, United Kingdom and United States to reduce withholding tax on payments abroad;
  10. Healy Consultants Compliance Department will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budgets and sensitivity analysis;
  11. In accordance with Canadian Taxation Act R.S.C., 1985, c. E-15, each entity must register for corporate tax and Goods and Services Tax/ Harmonized Sales Tax (GST/ HST) at the Canada Revenue Agency. Healy Consultants will be happy to assist you with corporation tax and GST registration for a one time fee of US$500;
  12. For an active trading company, these accounting and tax fees are an estimate of Healy Consultants’ fees to efficiently and effectively discharge your annual company accounting, auditing and tax obligations. Following receipt of a set of draft accounting numbers from your company, Healy Consultants will more accurately advise accounting and tax fees. For a dormant company, Healy Consultants’ fees are only US$950;
  13. Monthly and quarterly Government tax obligations include i) monthly payroll reporting and ii) monthly or quarterly VAT and corporation tax return filing. If you need our help, Healy Consultants can complete monthly Government reporting for a monthly fee of US$1,600. Healy Consultants monthly support will include i) receive in dropbox the monthly invoices from our client ii) label monthly bank statement transactions iii) preparation and submission of monthly VAT returns and iv) monitor monthly profit levels to minimize annual tax and v) submission of monthly employee payroll reporting;
  14. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

  1. Every Canada company registered in a federal state must have at least one director and one shareholder. At least one director must be resident of Canada except for the state of British Columbia;
  2. Canada company incorporation can be done online if the shareholders and directors already have a Canada social security number;
  3. Every Canada company must register for tax immediately after incorporation;

Contact us

For additional information on our accounting and legal services in Canada, please email us at Alternatively please contact our in-house country expert, Mr. Petar Chakarov, directly: