Instalment Penalty

Instalment penalty
You may also have to pay a penalty if your instalment payments are late or less than the required amount. We apply this penalty only if your instalment interest charges for 2007 are more than $1,000. To calculate the penalty, we determine which of the following amounts is higher: $1,000; or one-quarter of the instalment interest that you would have had to pay if you had not made instalment payments for 2007. Then, we subtract the higher amount from your actual instalment interest charges for 2007. Finally, we divide the difference by two and the result is your penalty.
Example For 2007, John made instalment payments that were less than he should have paid. As a result, he has $2,500 of actual instalment interest charges for 2007. If John had not made any instalment payments in 2007, his instalment interest charges would have been $3,200. Since one-quarter of $3,200 is $800, we subtract $1,000 (the higher amount) from $2,500. The difference is $1,500. Then, we divide $1,500 by two. John's penalty is $750.

Federal tax breaks 'too costly'

An interesting angle to view the tax cut.

From Vancouver Sun:

Think-tank hits 'special preferences' like fitness credit for kids

Eric Beauchesne, CanWest News Service

Published: Friday, April 27, 2007

OTTAWA -- Special tax breaks, such as the federal Conservative government's new fitness tax credit to put kids in sports, add to the compliance and administrative costs of Canada's tax system, which are close to $31 billion, or nearly $1,000 for every Canadian, the Fraser Institute said in a report Thursday...

Who are happy in this case? Besides the politicians who can claim their accomplishments, our dear accountants folks cannot complain...

Tax Rate Comparation Around the World

Comparison of Taxes paid by a household earning the country's average wage
Country	Single no kids	Married 2 kids	Country	Single no kids	Married 2 kids
Australia	28.3%	16.0%	Republic of Korea	17.3%	16.2%
Austria	47.4%	35.5%	Luxembourg	35.3%	12.2%
Belgium	55.4%	40.3%	Mexico	18.2%	18.2%
Canada	31.6%	21.5%	Netherlands	38.6%	29.1%
Czech Republic	43.8%	27.1%	New Zealand	20.5%	14.5%
Denmark	41.4%	29.6%	Norway	37.3%	29.6%
Finland	44.6%	38.4%	Poland	43.6%	42.1%
France	50.1%	41.7%	Portugal	36.2%	26.6%
Germany	51.8%	35.7%	Slovak Republic	38.3%	23.2%
Greece	38.8%	39.2%	Spain	39.0%	33.4%
Hungary	50.5%	39.9%	Sweden	47.9%	42.4%
Iceland	29.0%	11.0%	Switzerland	29.5%	18.6%
Ireland	25.7%	8.1%	Turkey	42.7%	42.7%
Italy	45.4%	35.2%	United Kingdom	33.5%	27.1%
Japan	27.7%	24.9%	United States	29.1%	11.9%
Source: OECD, 2005 data.

How much does CRA charge if you are late for your returns?

The late-filing penalty is five per cent of any taxes owed for 2006, plus one per cent of the balance owing for each full month the return is late, to a maximum of 12 months.

If Revenue Canada charged a late-filing penalty penalty on a return for 2003, 2004 or 2005, the person's late-filing penalty for 2006 will be 10 per cent of the 2006 balance owing, plus two per cent of the 2006 balance owing for each full month the return is late, to a maximum of 20 months.

To get your tax done before deadline, we can help. Email us for a quick quote.

Tax Tips on Tips and Gratuities

Tax Tips on Tips: Information for foodservice employees

What are tips and gratuities?

* Controlled tips form part of earnings from employment. The employer is required to make source deductions for Income Tax, Employment Insurance and Canada Pension Plan purposes, which are all included on the T4 prepared by the employer.
* Direct tips do not form part of earnings from employment and are not subject to source deductions. However, you can choose to include these earnings for Canada Pension Plan purposes.
* In Quebec, there is no distinction between controlled and direct tips, as all tips are considered controlled.

Tip #1: Report your tips and gratuities.

The Income Tax Act states that you are required by law to report all income, including tip or gratuity income on your income tax return. Controlled tips must be reported on line 101 of your tax return, and direct tips must be reported on line 104.


Tip #2: Penalties and re-assessments may apply if you do not report these earnings.

You may be subject to a re-assessment of your tax return if you do not report earnings received from tips and gratuities. You also may have to pay additional penalties for failing to report the extra income.


Tip #3: Ask your employer to make additional deductions to cover tips.

In order to avoid paying a larger tax bill at the end of the year, you may wish to ask your employer to deduct an additional amount from your base pay each pay period. The Canada Revenue Agency (CRA) can help you in determining the appropriate amount.


Tip #4: Pay taxes on an installment basis.

The CRA permits you to make quarterly tax installment payments.


Tip #5: No tax penalties if you provide full information on unreported income.



The CRA can help you organize your taxation matters. Under the Voluntary Disclosures Program, if you provide complete information on all previous unreported income, the CRA will not assess any penalties on the taxes owing. You will be required to pay the taxes you owe plus interest.

If you have any questions about taxes on tips and gratuities, please talk to your accoutant, or call the CRA free-of-charge at 1-800-959-8281.

Last minute Tax Tips

- Anyone receiving the GST credit or the Child Tax Benefit (CTB) should
file a return by April 30 in order to continue receiving these
benefits on time.

- Any senior receiving Guaranteed Income Supplement (GIS) through Old
Age Security should file on time to ensure their benefits continue
uninterrupted.

- Students applying for a provincial/federal loan should ensure they
file on time so processing their OSAP request is not delayed. This
would include their parents as well since their tax returns are
reviewed by the processing centre.

- Self-employed individuals and their spouses have until June 15 to file
a return. However, if they have a balance owing, the Canada Revenue
Agency (CRA) will charge interest on the outstanding balance as of
April 30 but they will not be assessed a late filing fee.

- Late filing penalties are five per cent of the balance owing, plus one
per cent for each full month that the return is late, to a maximum of
12 months. The CRA will also charge interest.

Don't Blow Your Tax Refund

Now many of you have got your tax refund, thinking about vacation or buying a HDTV? It may not be the best for your financial situation.

Two tips:

First, getting refunds means you are actually lost interests on the money that should be yours all along. You should plan it in a way so that you get your money right away instead of being hold by the government.

Second, pay down your debts with the money! Especially if you are having a high-interest credit card debt.

bc tax law change for your 2006 return

Please contact us for details.

The unchanged tax rates and new brackets are:

$33,755 or less - 6.05%
$33,755 to $67,511 - 9.15%
$67,511 to $77,511 - 11.7%
$77,511 to $94,121 - 13.7%
More than $94,121 - 14.7%


The personal basic amount is increased to $8,858.

The age amount is increased to $3,972.

The spousal amount and the amount for an eligible dependant are increased to $7,585.

The maximum amount for an infirm dependant age 18 or older is increased to $3,876 per dependant.

The maximum amount of allowable medical expenses for other dependants remains unchanged at $10,000.

The caregiver amount is increased to $3,877.

The disability supplement is increased to $3,876.

The disability amount and the amount transferred from a disabled person are increased to $6,644.

The maximum amount that can be deducted from medical expenses is increased to $1,842.

The basic reduction amount is increased to $368.

Canada's Tax Treaties with other countries

In Force
Algeria

The Canada-Algeria Income Tax Convention, as signed on February 28, 1999. For further details, consult News Release 2001-004.
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Argentina

The Canada-Argentina Income Tax Convention, as signed on April 29, 1993
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Armenia

The Canada-Armenia Tax Convention as signed on June 29, 2004.
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Australia

The new Canada-Australia Income Tax Convention, as signed on May 21, 1980 and amended by the Protocol signed on January 23, 2002.
The Canada-Australia Protocol, as signed on January 23, 2002.
The Canada-Australia Income Tax Convention, as signed on May 21, 1980.
- return -
Austria

The Canada-Austria Income Tax Convention, as signed on December 9, 1976 and amended by a Protocol signed on June 15, 1999.
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Azerbaijan

The Canada-Azerbaijan Income Tax Convention as signed on September 7, 2004.
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Bangladesh

The Canada-Bangladesh Income Tax Convention, as signed on February 15, 1982.
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Barbados

The Canada-Barbados Income Tax Agreement, as signed on January 22, 1980.
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Belgium

The new Canada-Belgium Income Tax Convention as signed on May 23, 2002. This treaty entered into force on October 6, 2004, and replaces the treaty signed in 1975.
The Canada-Belgium Income Tax Convention, as signed on May 29, 1975.
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Brazil

The Canada-Brazil Income Tax Convention, as signed on June 4, 1984.
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Bulgaria

The Tax Convention between Canada and the Republic of Bulgaria, as signed on March 3, 1999.
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Cameroon

The Canada-Cameroon Income Tax Convention, as signed on May 26, 1982.
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Chile

The Convention between Canada and the Republic of Chile, as signed on January 21, 1998.
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China (PRC)

The Canada-China Income Tax Agreement as signed on May 12, 1986.
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Croatia

The Agreement Between Canada and the Republic of Croatia, as signed on December 9, 1997.
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Cyprus

The Canada-Cyprus Tax Convention, as signed on May 2, 1984.
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Czech Republic

The new Convention between Canada and the Czech Republic, as signed on May 25, 2001. This treaty entered into force on May 28, 2002. For further details, consult News Release 2001-052.
The Canada-Czechoslovakia Tax Convention, as signed on August 30, 1990.
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Denmark

The Convention Between Canada and the Kingdom of Denmark, as signed on September 17, 1997.
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Dominican Republic

The Canada-Dominican Republic Tax Convention, as signed on August 6, 1976.
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Ecuador

The Convention Between the Government of Canada and the Government of the Republic of Ecuador, as signed on June 28, 2001. For further details, consult News Release 2002-004.
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Egypt

The Canada-Egypt Tax Convention, as signed on May 30, 1983.
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Estonia

The Canada-Estonia Tax Convention as signed on June 2, 1995. For further details, consult News Release 1996-002.
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Finland

The new Canada-Finland Income Tax Convention as signed on July 20, 2006.
The Canada-Finland Income Tax Convention, as signed on May 28, 1990.
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France

The Canada-France Income Tax Convention, as signed on May 2, 1975 and amended by a Protocol signed on January 16, 1987 and a Protocol signed on November 30, 1995.
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Germany

The new Agreement between Canada and the Federal Republic of Germany, as signed on April 19th, 2001. For further details, consult News Release 2002-030.
The Agreement between Canada and the Federal Republic of Germany, as signed on July 17, 1981.
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Guyana

The Canada-Guyana Income Tax Convention, as signed on October 15, 1985.
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Hungary

The Canada-Hungary Income Tax Convention, as signed on April 15, 1992 and modified by a Protocol signed on May 3, 1994.
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Iceland

The Convention Between Canada and the Republic of Iceland, as signed on June 19, 1997.
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India

The Canada-India Income Tax Agreement, as signed on January 11, 1996 (DFAIT web site).
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Indonesia

The consolidated version of the Canada-Indonesia Income Tax Convention, as signed on January 16, 1979 and modified by a Protocol signed in April 1, 1998.
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Ireland

The new Canada-Ireland Income Tax Convention, as signed on October 8, 2003.
The Canada-Ireland Income Tax Convention, as signed on November 23, 1966.
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Israel

The Canada-Israel Income Tax Convention, as signed on July 21, 1975.
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Italy

The Canada-Italy Income Tax Convention, as signed November 17, 1977 as modified by a Protocol signed on March 20, 1989.
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Jamaica

The Canada-Jamaica Income Tax Agreement, as signed on March 30, 1978.
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Japan

The Canada-Japan Income Tax Convention, as signed on May 7, 1986; amended by a Protocol signed on February 19, 1999 and entered into force on December 14, 2000. For further details, consult News Release 2000-088.
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Jordan

The Canada-Jordan Income Tax Convention signed on September 6, 1999. For further details, consult News Release 2001-005.
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Kazakhstan

The Convention between the Government of the Republic of Kazakhstan and the Government of Canada, as signed on September 25, 1996.
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Kenya

The Canada-Kenya Income Tax Agreement, as signed on April 27, 1983.
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Korea

The new Canada-Korea Income Tax Convention, as signed on September 5, 2006.
The Canada-Korea Income Tax Convention, as signed on February 10, 1978.
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Kuwait

The Canada-Kuwait Income Tax Agreement, as signed on January 28, 2002.
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Kyrgyzstan

The Canada-Kyrgyzstan Income Tax Convention signed on June 4, 1998. For further details, consult News Release 2001-003.
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Latvia

The Convention Between the Republic of Latvia and Canada, as signed on April 26, 1995.
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Lithuania

The Convention between the Government of the Republic of Lithuania and the Government of Canada, as signed on August 29, 1996.
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Luxembourg

The Convention signed on September 10, 1999 between Canada and the Grand Duchy of Luxembourg for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital entered into force on October 17, 2000. For further details, consult News Release 2000-084.
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Malaysia

The Canada-Malaysia Income Tax Agreement, as signed on October 15, 1976.
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Malta

The Canada-Malta Income Tax Agreement, as signed on July 25, 1986.
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Mexico

The Convention Between the Government of Canada and the Government of the United Mexican States, as signed on April 8, 1991.
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Moldova

The Canada-Moldova Income Tax Convention, as signed on July 4, 2002.
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Mongolia

The Canada-Mongolia Income Tax Convention, as signed on May 27, 2002.
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Morocco

The Canada-Morocco Income Tax Convention, as signed on December 22, 1975.
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Netherlands

The Canada-Netherlands Income Tax Convention, as signed on May 27, 1986 and amended by the Protocols signed on March 4, 1993 and August 25, 1997.
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New Zealand

The Canada-New Zealand Income Tax Convention signed on May 13, 1980.
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Nigeria

The Agreement Between the Government of Canada and the Government of the Federal Republic of Nigeria, as signed on August 4, 1992.
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Norway

The new Canada-Norway Income Tax Convention, as signed on July 12, 2002.
The Canada-Norway Income Tax Convention, as signed on November 23, 1966.
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Oman

The Canada-Oman Tax Agreement as signed on
June 30, 2004.
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Pakistan

The Canada-Pakistan Income Tax Convention, as signed on February 24, 1976.
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Papua New Guinea

The Canada-Papua New Guinea Income Tax Agreement, as signed on October 16, 1987.
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Peru

The Canada-Peru Income Tax Convention, as signed on July 20, 2001.
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Philippines

The Canada-Philippines Income Tax Convention, as signed on March 11, 1976.
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Poland

The Canada-Poland Income Tax Convention, as signed on May 4, 1987.
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Portugal

The Convention between Canada and the Portuguese Republic, as signed on June 14, 1999. For further details, consult News Release 2001-087.
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Republic of the Ivory Coast

The Canada - Ivory Coast Income Tax Convention, as signed on June 16, 1983.
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Romania

The new Canada-Romania Income Tax Convention as signed on April 8, 2004. This treaty entered into force on December 31, 2004, and replaces the treaty signed in 1978.
The Canada-Romania Income Tax Convention, as signed on November 20, 1978.
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Russia

The Canada-Russia Income Tax Agreement, as signed on October 5, 1995 (DFAIT web site).
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Senegal

The Canada-Senegal Income Tax Convention, as signed on August 2, 2001.
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Singapore

The Canada-Singapore Income Tax Convention, as signed on March 6, 1976.
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Slovak Republic

The Canada-Slovak Republic Income Tax Convention, as signed on May 22, 2001. For further details, consult News Release 2002-002.
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Slovenia

The Convention Between the Government of Canada and the Government of the Republic of Slovenia as signed on September 15, 2000
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South Africa

The Canada-South Africa Income Tax Convention, signed on November 27, 1995 (DFAIT web site).
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Spain

The Canada-Spain Income Tax Convention, as signed on November 23, 1976 (DFAIT web site).
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Sri Lanka

The Canada - Sri Lanka Income Tax Convention, as signed on June 23, 1982.
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Sweden

The Convention between Canada and Sweden, as signed on August 27, 1996 (DFAIT web site).
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Switzerland

The Convention between Canada and Switzerland, as signed on May 5, 1997.
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Tanzania

The Canada-Tanzania Income Tax Agreement, as signed on December 15, 1995 (DFAIT web site).
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Thailand

The Canada-Thailand Income Tax Convention, as signed on April 11, 1984.
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Trinidad and Tobago

The Convention between the Government of Canada and the Government of the Republic of Trinidad and Tobago, as signed on September 11, 1995.
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Tunisia

The Canada - Tunisia Income Tax Convention, as signed on February 10, 1982.
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Ukraine

The Canada-Ukraine Income Tax Convention, as signed on March 4, 1996 (DFAIT web site).
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United Arab Emirates

The Tax Convention Between Canada and the United Arab Emirates as signed on June 9, 2002.
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United Kingdom

The Canada-United Kingdom Protocol, as signed on May 7, 2003.
The Convention between the Government of Canada and the Government of the United Kingdom of Great Britain and Northern Ireland, as signed on September 8, 1978 and amended by a Protocol signed on April 15, 1980 and a Protocol signed on October 16, 1985.
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United States

The Convention between Canada and the United States of America, as amended by the protocols signed on June 14, 1983, March 28, 1984, March 17, 1995 and July 29, 1997.
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Uzbekistan

The Convention between the Government of Canada and the Government of the Republic of Uzbekistan, as signed on June 17, 1999.
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Venezuela

The Tax Convention Between Canada and Venezuela, as signed on July 10, 2001.
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Vietnam

The Agreement Between the Government of Canada and the Government of the Socialist Republic of Vietnam, as signed on November 14, 1997.
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Zambia

The Canada - Zambia Income Tax Convention, as signed on February 16, 1984.
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Zimbabwe

The Canada - Zimbabwe Income Tax Convention, as signed on April 16, 1992.
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http://www.fin.gc.ca/treaties/in_force-e.html

Homeowners foot the bill as Vancouver businesses get huge tax break

News from CBC:
"Vancouver city council has made it official: Homeowners will be hit with a property tax increase of eight per cent this year, more than double the increase approved just last month.

Vancouver's ruling Non-Partisan Association voted at Thursday's council meeting to cap property tax rates for businesses at last year's levels, which means homeowners will be hit with the largest tax increase in decades.

Businesses, small and large, will pay no increase.

That means homeowners will pay almost the entire property tax increase this year — a hike of eight per cent, or about $116 a year for the average home."

http://www.cbc.ca/canada/british-columbia/story/2007/04/19/bc-taxes.html

Good move, Vancouver! Bad news for home owners.

US Tax Day is Today!

You have until 11:59 p.m. on Tuesday, April 17, to file your 2006 federal tax return. That's true in most states as well, although five --Delaware, Hawaii, Iowa, Louisiana and Virginia -- actually have a later filing deadline.

If getting your tax return done on time just isn't feasible, file for an extension.

Contact us for details.

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Tax Due Day April 30th, 2007

Still haven't done your tax yet? Time to act on it. We are running a promotion for individual income tax starting from $20.

Send us an email tax@yyconsulting.com or give us a call at 778-558-4636 for a free evaluation.