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Business Number

Congratulations. You’ve decided to start a business! In what has no doubt been an unsettling last few years of employment high and lows, more Canadians than ever are deciding to venture out on their own and forge their own paths through small business. There’s one thing that’s an essential when it comes to getting your venture off the ground. Your Business Number.

What’s a business number? Good question. According to the CRA:

The Business Number (BN) is a numbering system that simplifies and streamlines the way businesses deal with the federal government. It is based on the idea of one business, one number. Each business requires one BN for its legal entity. A legal entity is defined as a sole proprietor, partnership, corporation, trust or other organization.

It’s a 15 character identifier of your business. It has two parts; a nine digit number that identifies your legal entity, and a 6 character portion composed of letters and numbers that identifies the particular tax account. The nine digit number part of the Business Number never changes; the second part of the Business Number will change depending on which tax account the number refers to.

This number is the single key in dealing with the federal government on payroll, tax remittance, import/export activities, and a variety of other items. Your business number is what’s required to be referenced with the CRA when it comes to discussing the details about anything related to remittance, tax, or business activity subject to tax.

You need to register your business and get a business number. A good resource for this is the Canada Revenue Agency’s website. You can also contact us at www.accountingontrack.com and or call us at 416.454.8812 and we would be more than happy to help you setup and register your new business.

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T2 Tax Return – Changes Affecting T2 Tax Returns

The Tax Season is upon us! As your Corporate Tax Accountant in Oakville and Mississauga, I have summarized the 2016 Income Tax changes, which may affect our clients’ T2 Tax Return (T2 Corporation Income Tax Return) one way or another, depending on your own situation of course. Feel free to call us at 416.454.8812 or email at mina.hanna@accountingontrack.com if you have any questions.

Corporate Taxes – T2 Corporation Income Tax Return

1- No Changes to the corporate tax rate
No changes have been proposed to the corporate tax rate on active business income, which is 15.5% during 2016. Unless there are further changes, any active business income generated during 2016 will be taxed at 15.5%.

2- Higher taxes on investment income inside corporation
There will be a 4% increase on corporate taxes on investment income earned inside a CCPC Canadian-controlled private corporation. This raises the corporate tax rate on investment income from 46.17% to 50.17%.

3- Higher taxes on dividend income inside professional corporation / holding company
There will be a 5% increase on corporate taxes on dividends received from most Canadian corporations. These taxes are refundable to the corporation if and when dividends are issued/paid to shareholders.

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EU VAT CHANGES FOR 2015

There are two new directives, first for the fast reaction mechanism aimed towards preventing VAT fraud. Second one is for the optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods and services. Quick Reaction mechanism provides the legal basis to the countries that are members of the EU to integrate an emergency measure in they are in position to serious case of sudden and massive VAT fraud.

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USES OF FINANCIAL REPORTS

Financial statements may be used by different stakeholders for a multitude of purposes. Owners and managers require financial statements to make important business decisions affecting its continued operations. Financial analysis is then performed on these statements, providing management with a more detailed understanding of the figures.

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ACCOUNTING 1 ON 1

Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that

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PROPER INVOICE INFO

Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that

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