Bob Mcdonald CMA,ISP

15736 100 Ave N.W. Edmonton, Alberta Canada T5P 0L1
Fax (780)486-4393 -------- Phone (780)484-1133

CORPORATION INSTALMENTS - can be paid quarterly if the Corporation qualifies. If you qualify go to - CALCULATION WORKSHEET. - If the Corporation does not qualify then monthly instalments are required.
- no reminders from CCRA in either case.

This information is for Corporations with active business income only, different rules for Investment/Holding Corps.

How to calculate your total required corporate tax instalments

1. The estimated tax for the current year
2. The tax for the preceding taxation year
3. A combination of the tax for the year before the preceding year, and for the preceding year

Here's how to calculate your quarterly instalments payable

OPTIONS AVAILABLE

1. One-quarter of the estimated tax payable for the current year is due each quarter of the taxation year.
2. One-quarter of the actual tax payable from the preceding year is due each quarter of the taxation year.
3. One-quarter of the tax payable for the year before the preceding taxation year is due the first quarter of the current year. One-third of the difference between the tax for the previous tax year year is due in each of the remaining three quarters of the current taxation year.

• You can use the option that is most advantageous to you. CCRA may charge interest if you use Option 1, and your estimated tax was lower than the year's actual tax and the tax calculated using Option 2 or 3
  ***** Note *****
  Special rules apply where a year used in calculating the tax is less than 12 months.

  The first instalment is due three months less a day from the starting date of the Corporation's tax year.The remaining instalments are due on the same day of each subsequent quarter.

  Balance Due after Installments:

  The balance due date is the date a corporation has to pay the remainder of the tax it owes for the taxation year.
  The time limit is three months (active business income only) if all of the three following conditions are met.
  1. Your corporation deducted the federal small business deduction in the taxation year, or if the deduction was allowed in the preceding taxation year.
  2. Your corporation is a Canadian-controlled private corporation throughout the taxation year.
  3. Your corporation's taxable income for the preceding taxation year was not more than its business limit (see below) for the preceding year.
     

  Arrears interest is charged on any amount the corporation failed to pay from the balance due date to the date of payment.

  A corporation may be associated with one or more corporations during the taxation year. If so, the total of the taxable income of the corporation for its preceding taxation year and the total of the taxable incomes of all the associated corporations for their taxation years that ended in the same calendar year as the calendar year in which the corporation's preceding taxation year ended must not be more than the combined total of their business limits for those preceding years.
  There is a business limit for any corporation or the combined total of the business limits of all associated corporations. This amount would be less if the preceding year's business limit was prorated for a short taxation year. The total business limit could be more than maximum allowed if the corporation is associated with other corporations in the current year, but not in the preceding year.

  Go to Personal Tax Instalments 2008

  The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.
  Although every reasonable effort has been made to insure the accuracy of the information contained in this, letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortuous,
  or any other form of liability for its contents or for any consequences arising from its use.
  

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  Page maintained by R McDonald, bob@rmcdonald.com Copyright(c) 1996. Created: 23/02/96 at 9:26:04 AM Updated: 10/25/2006 at 12:55:51 PM