Manufacturers and wholesalers move goods across borders and often solve technical problems along the way. The tax work follows the goods and the development: credits for the development work, duties and taxes at the border, and the right GST/HST on what you ship out.
The points where tax and accounting rules come into play are numbered.
Numbered points are explained below.
At: Buy materials
Without the right CARM set-up, goods can wait at the border until duties and taxes are paid. The CBSA assesses duties and taxes on commercial imports through CARM, and importers who want goods released before paying must enrol in Release Prior to Payment and post their own financial security.
We record duties, taxes and landed costs in your books so each import is costed correctly.
At: Make or assemble
SR&ED can return part of what you spend on development, but a missed deadline loses the claim. Development work that tries to resolve a technological uncertainty may qualify for the Scientific Research and Experimental Development credit; the claim is made on Form T661 with the return, and the deadline is 12 months after the return’s filing due date.
We track eligible costs through the year and prepare the financial side of the claim before the deadline.
At: Sell and ship
Zero-rating an export without proof leaves you owing the tax if the CRA asks for evidence. Goods exported from Canada are generally zero-rated for GST/HST: tax applies at 0%, you can still claim input tax credits on your costs, and you need proof of export to support the zero rating.
We make sure each export is recorded with the evidence behind it.
SR&ED claims, input tax credits and the corporate return are prepared together.
Inventory, landed costs and import taxes must be recorded correctly each month.
Margins by product and cash tied up in stock are the numbers that decide pricing and purchasing.
Selling or warehousing in the US often leads to a US entity and new reporting on both sides.
The claim must be filed within 12 months after the filing due date of the income tax return for the year the expenditures were incurred.
Generally no. Exported goods are zero-rated, provided you keep evidence that the goods left Canada.