Canada: Year-End Tax Planner – 2012: What Individuals And Owner-Managed Businesses Need To Do Now To Save Tax

Last Updated: November 28 2012
Article by Jason Safar


This calendar includes many key tax deadlines during the next few months. Among the deadlines not included are those for provincial payroll taxes, payroll withholdings, provincial health insurance premiums, workers' compensation, federal and provincial corporate income and capital tax payments, Goods and Services Tax/Harmonized Sales Tax and provincial sales taxes.

Deadlines falling on holidays or Sundays may be extended to the next business day.


The Year-end tax planner is designed primarily for individuals who have accumulated some wealth or who own their own businesses (large or small). Your PricewaterhouseCoopers LLP (PwC) adviser or any of the individuals listed on page 25 can help you use it.

In addition to tax, your financial plan should reflect investment philosophies, sound business practices and motivational considerations. Owner-managers should ensure that sufficient funds are retained to meet business objectives; given the uncertainty in the economic environment, cash flow management is especially important.



  • Corporate rates – general and M&P dropped from 16.5% to 15% in 2012 (small business remains 11% in 2012 and subsequently).
  • Eligible dividends

    • personal taxes increased in 2012.

    • designation rules loosened for payments after March 28, 2012.
  • Pooled registered pension plans – new voluntary savings plan introduced.
  • Personal services business – tax rate increased for taxation years starting after October 31, 2011.
  • Employee profit sharing plans (EPSPs) – new tax for certain EPSP contributions generally made after March 28, 2012.
  • Retirement compensation arrangements – anti-avoidance rules expanded, generally for transactions occurring and investments acquired after March 28, 2012.
  • Group sickness or accident insurance plans – employer contributions generally made after March 28, 2012, relating to coverage after 2012, will be included in an employee's income.
  • Partnership information returns – information requirements expanded (transitional relief is available for 2011 and 2012 fiscal periods).
  • Joint ventures – separate fiscal period eliminated for taxation years ending after March 22, 2011.
  • Scientific research and experimental development (SR&ED)

    • 20% investment tax credit (ITC) decreasing to 15% for taxation years ending after 2013.
    • capital expenditures no longer eligible for SR&ED deduction or ITCs after 2013.
    • overhead proxy rate reduced in stages from 65% to 55% after 2012.
    • SR&ED contract payments eligible for ITCs reduced in some cases after 2012.
    • program to be reviewed.


  • Shareholder loans – Canadian corporations controlled by non-residents can elect to make certain loans to foreign parent companies or related non-resident companies without incurring the deemed dividend withholding tax, generally for loans received or indebtedness incurred after March 28, 2012. Also applies to loans made by, or to, certain partnerships.
  • Thin capitalization rules

    • 2-to-1 debt-to-equity ratio decreasing to 1.5-to-1 for taxation years beginning after 2012.
    • scope of rules broadened.


  • General and M&P corporate rate

    • in British Columbia, may increase to 11% (April 1, 2014).
    • in Ontario, non-M&P rate remains 11.5% for 2012 and until Ontario's budget is balanced (scheduled for 2017-2018); rate reductions rescinded.
  • Small business rate and threshold

    • British Columbia rate remains 2.5%; reduction rescinded.
    • New Brunswick rate may drop (2013 to 2015).
    • Nova Scotia rate declining (2012 to 2013).
    • $500,000 threshold applies in all jurisdictions except Manitoba and Nova Scotia, which have a $400,000 threshold.

  • General capital tax – no longer exists (applied only in Nova Scotia, where it was eliminated on July 1, 2012).
  • Ontario personal income tax – tax on incomes over $500,000 increasing from 11.16% to 12.16% in 2012 and to 13.16% after 2012 (surtaxes apply); rate increases to be rescinded when Ontario's budget is balanced (scheduled for 2017-2018).
  • Quebec personal income tax – tax on incomes over $100,000 possibly increasing from 24% to 25.75% after 2012.
  • Quebec Sales Tax (QST)

    • rate increased from 8.5% to 9.5% on January 1, 2012.
    • to be further harmonized with the GST on January 1, 2013, when the rate will increase from 9.5% to 9.975% and QST will be calculated exclusive of GST (effective harmonized rate of 14.975%).

  • Harmonized Sales Tax (HST)

    • British Columbia – 12% HST to be replaced by 7% provincial sales tax (PST) and 5% federal Goods and Services Tax (GST) on April 1, 2013.
    • Nova Scotia – rate decreasing from 15% to 14% by July 1, 2014, and to 13% by July 1, 2015.
    • Prince Edward Island – combined 15.5% PST/federal GST to be replaced by a 14% HST on April 1, 2013.


Working with your PwC adviser is essential when considering the following year-end tax planning tactics.

Owner-managed businesses

  • Salary/dividend mix – Determine the optimal mix of salary and dividends for you and other family members for 2012.

    • Consider all relevant factors, including the owner/manager's marginal tax rate, the corporation's tax rate, provincial health and/or payroll taxes, RRSP contribution room ($132,333 of earned income in 2012 is required to maximize RRSP contribution in 2013), CPP contributions and other deductions and credits (e.g., for child care expenses and donations).
    • Be aware that if you earn dividends (especially eligible dividends) your alternative minimum tax (AMT) exposure can increase.
    • If the individual does not need cash, consider retaining income in the corporation.

      • Tax is deferred if the corporation retains income when its tax rate is less than the individual owner-manager's rate. See Table 1 on page 20.
      • In times of economic uncertainty, retaining income in the corporation will help the corporation's cash flow and will allow the corporation to have income and pay corporate tax that may be recovered by possible future business losses.
      • Consider the effect of retaining income in the corporation on corporate share value for estate and shareholder agreement purposes.

    • Ontario – If you are resident in Ontario, ensure that your remuneration strategy accounts for Ontario's new personal income tax rate on incomes over $500,000 — 12.16% plus Ontario surtax in 2012, increasing to 13.16% plus Ontario surtax after 2012, until Ontario's budget is balanced (scheduled for 2017-2018).

      • To avoid the new Ontario high-earner tax, keep taxable income at $500,000 or less, by deferring the receipt of taxable bonuses or discretionary dividends until the high income tax is eliminated.
      • If your Ontario taxable income is expected to exceed $500,000 in 2013, consider accelerating taxable bonuses and discretionary dividends to 2012 to avoid the higher tax rate after 2012. Be aware that this strategy may increase your AMT exposure and will hasten the payment of tax.
      • If your Ontario taxable income will exceed $500,000 in 2012 and later years, consider moving to a lower-tax jurisdiction before the end of 2012 (if this timing is not feasible, before the end of 2013).
      • If you are subject to the new Ontario high-earner tax, be aware that distributing non-eligible dividends (starting 2012) and eligible dividends (starting 2013) to trigger a refund of refundable tax on hand is no longer a cash-positive transaction, because the dividend refund rate (i.e., 33 1/3%) is less than the top personal tax rate on these dividends (i.e., non-eligible, 34.52% for 2012 and 36.47% after 2012; eligible, 33.85% after 2012).

    • Nova Scotia – If Nova Scotia tables a budget surplus in its 2013-2014 fiscal year, for 2013 the top $150,000 personal tax bracket and 21% rate will be eliminated, but the 10% personal income tax surtax on provincial income tax exceeding $10,000 will be reinstated. In that case, owner-managers should take into account that personal tax rates may change in 2013 and adjust strategy on the payment of salary and/or dividends accordingly.
    • Quebec – If you are resident in Quebec, be aware that Quebec's minority government is proposing, starting 2013, to increase:

      • the personal income tax rate from 24% to 25.75% on incomes over $100,000; and
      • the health contribution from $200 to a maximum of $1,000 if your net income exceeds $130,000, up to $150,000 (the health contribution will decrease for net incomes below $42,000).

    • Ensure that your remuneration strategy accounts for these proposed changes.
      • Consider accelerating taxable bonuses and discretionary dividends to 2012 to avoid the possibility of a higher tax rate on incomes over $100,000 after 2012. Note that this strategy may increase your AMT exposure and will hasten the payment of tax.
      • If the proposed changes are enacted and you will be subject to the top combined federal/Quebec marginal income tax rate in 2013, be aware that distributing eligible dividends to trigger a refund of refundable tax on hand will no longer be a cash-positive transaction, because the dividend refund rate (i.e., 33 1/3%) is less than the top personal tax rate on eligible dividends (i.e., 35.22%, starting 2013).
    • Qualifying small business corporation share status – Recognize that forgoing bonus and/or dividend payments and stockpiling passive investments could cast doubt on whether substantially all of the assets of a Canadian-controlled private corporation (CCPC) are used in an active business, in turn jeopardizing the ability to claim the $750,000 lifetime capital gains exemption, among other things.
    • Scientific research and experimental development (SR&ED) – Consider not forgoing bonus payments if it causes a CCPC's SR&ED investment tax credits (ITCs) to be non-refundable and subject to the lower ITC rate. (But retaining some income will allow the company to use the non-refundable ITCs.)
    • Salaries to family members – Pay a reasonable salary to a spouse or child who is in a lower tax bracket and provides services to your business. This also allows family members to have earned income for CPP, RRSP and child care expense purposes.
    • Dividends to family members – Consider paying dividends to adult family members who are shareholders in your company and in a lower tax bracket. Individuals with no other income can receive up to about $50,000 in dividends, without triggering any tax, depending on their province or territory of residence and the availability of the general rate income pool (GRIP).

  • Dividend tax regime – Be aware of how the dividend tax rules affect dividend distributions.

    • Designate dividends that can qualify as eligible dividends. (Designation procedures differ for public and non-public companies, but both require designation at the same time as, or before, payment of the eligible dividend.)
    • Consider electing to treat all or part of any excess eligible dividend designation as a separate non-eligible dividend.
    • Be aware that for dividends paid after March 28, 2012:

      • a corporation can designate, at the time it pays a taxable dividend, any portion of the dividend to be an eligible dividend; and
      • the Minister of National Revenue can accept late eligible dividend designations that are made within three years after the day the designation was first required to be made.

    • CCPCs

      • Determine the CCPC's ability to pay eligible dividends by estimating its general rate income pool (GRIP) as at its 2012 year end.
      • Consider distributing dividends in the following order:1
        1. Eligible dividends that trigger a refundable dividend tax on hand (RDTOH) refund.
        2. Non-eligible dividends that trigger a RDTOH refund.
        3. Eligible dividends that do not trigger a RDTOH refund.
        4. Non-eligible dividends that do not trigger a RDTOH refund.
      • Consider making the election that permits a CCPC to be treated as a non-CCPC for purposes of the dividend tax regime. For a newly incorporated CCPC that is expected to earn only active business income and will not benefit from the small business deduction, this would eliminate the need to calculate and monitor GRIP before paying eligible dividends.
      • A CCPC that will become a non-CCPC (i.e., planning to go public or become controlled by non-residents) should consider the effect of the federal dividend tax rules, as well as the deemed year-end rules.

    • Non-CCPCs

      • Determine whether the non-CCPC must pay non-eligible dividends before it can pay eligible dividends, by computing its low-rate income pool (LRIP).
      • A non-CCPC that will become a CCPC should consider the effect of the federal dividend tax rules.

  • Cash flow management – Recognize that managing your business cash flow is critical, especially in times of economic uncertainty. To reduce working capital outflows, reduce or defer tax instalments (if lower taxable income is expected), maximize federal and provincial refundable and non-refundable tax credits (e.g., SR&ED ITCs and film, media and digital incentives), trigger capital losses to recover capital gains tax paid in previous years, and recover any income, sales or customs tax overpayments from previous years.
  • Remuneration accruals – Accrue reasonable salary and bonuses before your business year end. Ensure accrued amounts are paid within 179 days after the business' year end and appropriate source deductions and payroll taxes are remitted on time.
  • Pooled registered pension plan (PRPP) – Consider joining a PRPP, a voluntary savings plan that is similar to a defined contribution RPP (or a group RRSP plan). See our Tax memos:
    • "Pooled Registered Pension Plans: A new retirement savings vehicle"; and
    • "Pooled Registered Pension Plans (PRPPs)–Tax rules introduced."
  • Legislation to implement federal PRPPs has been enacted. The provinces and territories must introduce their own enabling legislation to implement provincial and territorial PRPPs. Quebec intends to introduce a similar voluntary retirement savings plan.
  • Retirement compensation arrangements (RCAs) – Consider setting up an RCA as an alternative to paying a bonus. However, be aware that:

    • anti-avoidance rules for RCAs engaged in non-arm's length transactions will parallel the "prohibited investment" and "advantage" rules applicable to tax-free savings accounts, RRSPs and RRIFs. They will apply to:

      • investments acquired after March 28, 2012, or that become prohibited after March 29, 2012; and
      • advantages extended, received or receivable after March 28, 2012.

    • for RCA contributions made after March 28, 2012, RCA tax refunds are restricted in certain cases when the RCA property, reasonably attributable to a prohibited investment or advantage, has declined in value.

  • See our Tax memo "Employee benefits and executive compensation: Draft legislative proposals released."
  • Employee profit sharing plans (EPSPs) – Consider setting up an EPSP as an alternative to paying a bonus. However, be aware that for EPSP contributions generally made after March 28, 2012, a new tax will be imposed on the portion of an employer's EPSP contribution, allocated by the trustee to a "specified employee," that exceeds 20% of the employee's salary received in the year from the employer. A specified employee generally includes an employee who has a significant equity interest in, or does not deal at arm's length with, the employer. See our Tax memo "Employee benefits and executive compensation: Draft legislative proposals released."
  • Employee stock options – Be aware that only the employer or employee (not both) can claim a tax deduction for cashed-out stock options. File an election if the company chooses to forgo the tax deduction.
  • Donations – Make charitable donations and provincial political contributions (subject to certain limits) before year end. Be aware that Canadian donors will be able to make tax-receiptable gifts after 2012 to foreign charitable organizations that have been granted designated status for 24 months by the Minister of National Revenue.
  • Final corporate tax balances – Pay final corporate income tax and (in Nova Scotia, capital tax) balances and all other corporate taxes imposed under the Income Tax Act within two months after year end (three months for certain CCPCs).
  • Corporate withdrawals – Make tax-effective withdrawals of cash from your corporation (e.g., by paying tax-effective dividends or non-taxable capital dividends, returning capital or repaying shareholder loans).
  • Corporate income
    • Small business rate – Small businesses in Nova Scotia and New Brunswick should consider deferring income to 2013 and later years by maximizing discretionary deductions (e.g., CCA) in 2012 to benefit from future small business rate decreases. Nova Scotia's rate decreases to 3.5% on January 1, 2013, and New Brunswick plans to decrease the rate in stages to 2.5% over the next three years, but no details have been announced.
    • General rate – If your company is subject to British Columbia's general tax rate, consider accelerating income to 2012 and 2013 by minimizing 2012 and 2013 discretionary deductions; the general rate may increase from 10% to 11% on April 1, 2014, if the province's fiscal situation worsens.
  • Mandatory e-filing of corporate income tax and information returns – To avoid penalties, e-file:
    • corporate income tax returns if annual gross revenues exceed $1 million (similar penalties apply in Quebec); and
    • information returns if more than 50 information returns are submitted annually.
  • Partnership information returns – Be aware that information requirements for partnership information returns have been expanded for fiscal periods ending after 2010 (transitional relief is available for 2011 and 2012 fiscal periods). Partners must start gathering information to determine the adjusted cost base of each partner's interest in the partnership and each partner's at-risk amount for the partnership. See our Tax memo "Changes to partnership returns: What they mean for you."
  • Partnership deferral – If you have a corporate partner in a partnership, be aware that the deferral of partnership income is curtailed for certain corporate partners with taxation years ending after March 22, 2011, in respect of partnerships with misaligned year ends. As a result:

    • the corporate partner must accrue a notional income amount from the partnership for the portion of the partnership's incomplete fiscal period that falls within the corporation's taxation year;
    • the corporate partner should consider requesting permission to change either:

      • the fiscal year end of the partnership to coincide with that of the corporate partner; or
      • its taxation year end; and

    • the corporate partner should determine whether a reserve continues to be available in respect of additional income reported on the transition to the new rules.

  • Joint venture deferral – If you have a corporate participant in a joint venture arrangement, be aware that the CRA's administrative policy no longer allows joint venture arrangements to report income using a separate fiscal period. As a result:

    • the corporate participant must report its actual share of joint venture income or loss up to the end of its own yearend for tax years ending after March 22, 2011, and in certain cases can claim a transitional reserve for the additional income included in that year; and
    • the corporate participant should consider:

      • making the accounting period used for the joint venture align more closely with the year ends of the corporate participants;
      • requesting permission to change its taxation year end to align with the joint venture's reporting period; or
      • converting the joint venture arrangement into a partnership.

    • See our Tax memo "Joint Ventures—CRA ends policy allowing separate fiscal periods: How will this affect your company? (Updated March 23, 2012)."

  • Hiring credit for small business – Claim this credit of up to $1,000 in 2012 if your business's 2011 employment insurance (EI) premiums were $10,000 or less and increased in 2012.
  • Avoidance transactions – Be aware that:
    • draft legislation makes an "avoidance transaction" meeting certain conditions a "reportable transaction" that must be reported to the CRA, generally for transactions entered into after 2010 and those that are part of a series of transactions completed after 2010. The draft legislation was re-released on October 24, 2012. Contact your PwC adviser to discuss changes to these rules.
    • Quebec requires disclosure of certain aggressive tax planning transactions. See our Tax memo "Quebec's Regime for Aggressive Tax Planning: Prescribed Form Released."
  • Depreciable assets
    • Accelerate purchases of depreciable assets. Ensure assets are available for use at year end.
    • Purchase eligible M&P machinery and equipment. The CCA deduction is enhanced from 30% declining balance to 50% straight-line, for purchases made before 2014.
    • Consider making a special election to treat leased fixed assets as purchased under a financing arrangement.
  • Reserves – Identify and claim reserves for doubtful accounts receivable or inventory obsolescence.
  • Business income reserve – If you sold goods or real property inventory in 2012 and proceeds are receivable after the end of the year, you may be able to defer tax on related profits by claiming a reserve over a maximum of three years.
  • Dispositions – Defer, until after year end, planned dispositions that will result in income.
  • Accounting method – Consider changing the corporation's method of accounting in respect of the timing of income inclusions. This may require the Minister's approval. Alternatively, consider using a different method for tax than for accounting purposes, if permitted for tax purposes. For example, for construction projects, if the percentage of completion method is used for accounting purposes, use the completed contract method for tax purposes to provide a tax deferral.
  • Costs of doing business – Compare costs of doing business in different jurisdictions.
  • Intercompany charges
    • Ensure charges are reasonable given changes in the economy.
    • Consider adjustments to intercompany charges to reduce overall taxes paid by the related group. For example, charge reasonable mark-ups for services provided by related corporations.
  • Capital gains reserve – If you sold or will sell capital property in 2012 in exchange for debt, you may be able to defer tax on part of the capital gain by claiming a capital gains reserve over a maximum of four years.
  • Foreign exchange – Consider triggering a foreign exchange loss that is on account of capital before year end to offset capital gains in the current year or previous three.
  • Individual pension plans (IPPs) – If you have (or will) set up an IPP, be aware that certain advantages have been eliminated (e.g., minimum withdrawal requirements will apply to IPP members over 71, starting 2012, and new rules apply for funding past service contributions after March 22, 2011).
  • Shareholder loans to your corporation – Determine whether your corporation would benefit from deductible interest on shareholder loans made to the corporation, to reduce active business income to the $500,000 threshold ($400,000 in Manitoba and Nova Scotia).
  • Shareholder loans from your corporation – Repay shareholder loans from your corporation no later than one tax year after the amount is borrowed (exceptions apply).
  • Taxable capital – If your company's taxable capital for federal tax purposes exceeds certain limits, on an associated group basis, your company will start losing access to the small business deduction and the enhanced 35% SR&ED ITC rate. Monitor your taxable capital and discuss with your PwC adviser ways to reduce taxable capital before your company's year end.
  • Protect your investment in your business assets – Consider:
    • transferring assets (e.g., real estate and intellectual property) from an operating company to a separate company on a tax-deferred basis; and
    • arranging to secure a loan from a shareholder.
  • Capital gains rollover – If you sold or will sell eligible small business corporation shares in 2012, invest the proceeds in other eligible small business corporation shares by April 30, 2013, to be eligible to defer all or part of the capital gain. (Applies to individuals only.)
  • Exemption for qualified small business corporation shares
    • Structure the business so that corporate shares become or remain eligible for the $750,000 capital gains exemption.
    • Consider crystallizing the capital gains exemption and/or restructuring to multiply access to the $750,000 capital gains exemption with other family members.
    • A cumulative net investment loss (CNIL) may reduce your ability to use your remaining capital gains exemption. To reduce or eliminate any CNIL, consider receiving dividends and interest income, instead of salary, from your company.
  • SR&ED – Ensure claims in respect of SR&ED expenditures or ITCs are filed by the deadline, which is 18 months after the corporation's year end. Make SR&ED expenditures before significant changes to the federal ITC program become effective. Changes:
    • reduce the 20% SR&ED ITC rate to 15% for taxation years ending after 2013 (pro-rated for taxation years straddling January 1, 2014);
    • provide that capital property acquired, generally after 2013, is neither deductible as an SR&ED expenditure nor eligible for ITCs;
    • reduce the overhead proxy rate from 65% to 60% for 2013 and to 55% after 2013; and
    • allow only 80% of SR&ED contract payments (net of SR&ED capital expenditures) to an arm's length contractor, incurred after 2012, to be eligible for ITCs.
  • See our Developments "Legislative proposals confirm SR&ED changes."
    • If you are a partnership that includes a corporation, be aware that your deadline for filing an SR&ED claim for work done in that partnership may, in certain situations, have been reduced by up to 13 months. Ensure that you file your SR&ED claim on time.

    • Ensure that GST/HST has been correctly collected and remitted on taxable supplies and that input tax credits have been claimed on eligible expenses throughout the year.
    • GST/HST electronic filing requirement – To avoid penalties, file your company's GST/HST returns electronically if certain criteria are met (e.g., annual taxable supplies on an associated basis exceed $1.5 million).
    • Recaptured input tax credits – Determine if your business is required to report recaptured input tax credits; this generally applies to large businesses, including financial institutions.
    • British Columbia – Be aware that on April 1, 2013, the province's HST will be replaced with a sales tax regime similar to the one that applied before July 1, 2010 (i.e., 7% provincial sales tax (PST) and 5% federal GST). Businesses subject to British Columbia's HST may have to:

      • review all systems (accounting, point of sale, etc.);
      • consider if the return to the PST will affect consumer purchasing decisions before the reinstatement date;
      • consider the effect of the PST on capital expenditures and purchasing; and
      • review significant contracts to ensure contract clauses will address the cost and/or reimbursement of PST on significant projects.

    • See our Tax memos:

      • "B.C. votes to extinguish HST";
      • "Eliminating the HST in British Columbia: Canada's Department of Finance proposes transitional rules";
      • "Re-implementation of British Columbia Provincial Sales Tax: Transitional rules"; and
      • "Returning to B.C.'s Provincial Sales Tax: Transitional rules for new housing."
    • Nova Scotia – Be aware that Nova Scotia will reduce its HST rate from 15% to 14% by July 1, 2014, and to 13% by July 1, 2015 (i.e., the provincial portion of the HST will decrease from 10% to 9% and to 8%, respectively.) Consider deferring large purchases for which input tax credits might not be recoverable to after July 1, 2015.
    • Prince Edward Island – Set up a transition team, if necessary, to prepare for the 14% HST (i.e., 9% provincial component plus the 5% federal GST) that will replace the combined PST/GST rate of 15.5% (i.e., 10% PST, which applies on the 5% GST) on April 1, 2013. In addition:
      • evaluate the impact of the HST on costing and pricing;
      • assess the tax effect related to inter-provincial sales, central purchasing and importing goods;
      • review all contracts and agreements that straddle April 1, 2013, and all contracts with one- to two-year terms that will be entered into or renewed, to consider the effect of harmonization on these contracts; and
      • review the timing of planned expenditures and capital acquisitions, and plan appropriate strategies to either accelerate or defer large purchases.
  • QST
    • Be aware that the QST will be further harmonized with the GST on January 1, 2013, with an effective harmonized rate of 14.975%. (The QST rate will increase to 9.975% and will be calculated exclusive of the 5% GST). Businesses should:

      • review all systems (accounting, point of sale, etc.) to determine if they can account for the three decimal points; and
      • be aware that financial services will be QST exempt instead of zero-rated. Because financial institutions will be affected significantly, they must address the various changes that will apply.

    • See our Tax memo "QST to be harmonized with GST by 2013."
    • Restricted input tax refund – Determine if your business is required to restrict input tax refunds; this generally applies to large businesses, including financial institutions.

  • GST/HST and QST – Determine if the following common GST/HST and QST traps apply to your business:
    • Management/intercompany fees – Ensure that GST/HST and/or QST is charged on management and inter-company fees within your corporate group. Determine if it is possible to make a special election to avoid having to charge GST/HST and/or QST.
    • Place of supply rules – If your company sells to different Canadian jurisdictions, understand the provincial place of supply rules to ensure that your company is collecting the correct rate of tax.
    • Input tax credit documentation – Ensure that your company has obtained the required written documentation to support input tax credit claims. You can check the CRA (or Revenue Quebec) website to verify the GST/HST (or QST) registration number of the supplier from which you made the purchase.
    • Taxable benefits – Determine if your company is required to remit GST/HST and/or QST on amounts reported as taxable benefits for employees.

      Also, see our article "GST/Harmonized Sales Tax (HST) trips and traps for privately owned businesses" in Wealth and tax matters (2012 – Issue 2).
  • Property tax
    • To challenge the company's property tax bill, appeal the property value assessment, which generally is mailed early in the year. Filing deadlines vary by province or territory, are compulsory and usually fall before the property tax bill is mailed.
    • Ontario

      • Be aware that all property owners will receive a property assessment notice in 2012 based on the property's value as of January 1, 2012. This notice is used to calculate property taxes for the 2013 to 2016 tax years. A company can appeal its 2012 property assessment (used for the 2013 tax bill) by March 31, 2013. On appeal, the onus is on the assessment agency to prove that the assessed value is correct.
      • A company that has a vacancy in a commercial or industrial facility in 2012 may be able to claim a tax refund by filing a request to the municipality by February 28, 2013. Filing for this rebate is the owner's responsibility.
      • Verify your company's property tax rate classification (i.e., industrial, commercial). Using the correct tax rate may reduce property taxes.

    • Discuss with your PwC adviser ways to reduce municipal property tax.

  • Environmental incentives – Be aware of federal and provincial environmental incentives that can help your company go green and save money. See our Going Green Tables (2011). Recent enhancements that apply to assets acquired generally after March 28, 2012:

    • expand the types of waste-fuelled thermal energy equipment that qualify for the 50% declining CCA rate; and
    • allow equipment using eligible waste fuels to qualify for the 30% or 50% declining CCA rate only if the applicable environmental laws and regulations were complied with when the equipment first became available for use.

  • Provincial or territorial tax incentives – Benefit from provincial or territorial tax incentives and enhancements to these incentives. For example, determine whether your company qualifies for:

    • Manufacturing and processing (M&P) investment tax credits – available in Manitoba, Nova Scotia, Prince Edward Island, Quebec (includes a proposed refundable credit for certification expenses to commercialize products outside Quebec) and Saskatchewan.
    • SR&ED tax credits – available in all provinces (except Prince Edward Island) and the Yukon. Enhanced in Alberta for taxation years ending after March 31, 2012, and revised in Saskatchewan for R&D expenditures incurred after March 31, 2012.
    • Media tax incentives – modified in British Columbia (film and digital media) and Quebec (multimedia titles), enhanced in Manitoba (film), new programs in New Brunswick (multimedia initiative effectively replaces the film tax credit, and digital media development program introduced), but Saskatchewan's refundable film tax credit ends and may be replaced by a non-refundable film tax credit.
    • British Columbia training tax credits – extended three years to December 31, 2014, and now available for employers with apprentices in the shipbuilding and ship repair industry.
    • British Columbia book publishing tax credits – extended five years to March 31, 2017.
    • Manitoba data processing investment tax credit – new refundable tax credit (equal to 4% of buildings and 7% for machinery and equipment) for corporations that purchase or lease new qualified property for use in a data processing centre in Manitoba after April 17, 2012, and before 2016.
    • Manitoba co-op education and apprenticeship tax credit – the Apprentice Hiring Incentive and Journeypersons Hiring Incentive are enhanced after 2012.
    • Quebec tourism tax credit – proposed 25% refundable tax credit (annual maximum of $175,000) can be claimed for renovating or improving tourist accommodations outside Montreal and Quebec City before 2016.
    • Saskatchewan corporate income tax rebate on new rental housing – new 10-year rebate equal to 10% of the rental income from newly constructed multiunit rental projects that are available for rent before 2017, and registered under a building permit dated after March 20, 2012, and before January 1, 2014; the rebate does not apply to rental income that is subject to the small business rate.

To read this Planner in full, please click here.


1. However, depending on the jurisdiction of residence, paying non-taxable capital dividends should be inserted as the second or third preference.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions