John_molson2003

最近，一朋友给我出了个难题。他有一杂货店，在他的公司名下，那杂货店所在的楼房在他个人名下。楼房租给公司，每月收租金。去年已经交了半年租了，后来他看自己个人收入太高，就不想收后半年的租金。这样个人的收入就不会达到要交税的水平。公司本身不盈利，所以也不指望租金开支去增加亏损。现在他跑过来问我这样做行不行。我的直觉告诉我是不行的，因为是 Related party transaction. 税务局不会同意的。但是查了一下税法和CRA的网站。 ITA69和ITA74关于Related party transaction都只适用于Transfer property，没提到我朋友的情况.后来没法，打电话去税务局。接电话的technicien不清楚，把我转到一个高级officer.他也只跟我说不行，问他依据税法哪一条，他也答不上。实在被我问烦了，refer我去税务预裁部门。要一小时$100来研究你的Tax planing, 还要提供真实姓名，公司注册号等。看来这样是行不通第。

现在请教哪位同行能找出相关依据，税法也好，任何官方信息也好。只是不要告诉我说我认为如何如何。我好告诉我朋友这样做是不行的。看来是做多了审计，人都做傻了。:mad:

John_molson2003

I guess that I found a real taxation gurus in the forum. I can only say that you are really a genius. Now I know the ITA69(1) won't apply to the situation when a shareholder lease his or her property to his or her company. Thank you so much! Now we can close the discussion, as you give a perfect touchdown. Thank all the participants. This my favorite song, and I present it to all of your guys. Hope you enjoy it.

http://www.youtube.com/watch?v=Ri7-vnrJD3k

Post by genew;3040139
This is not "stubborn" at all, but the way to deal with the laws :wink:.
The notes is on page 361. However, it is just a note. I agree with you - "anything" can be anything and is not defined in the act.
The fact is that your friend hada historical records with the tax authorities, had the GST/PST accounts registered, and this is indead a "commercial property" at the fist place. You are right, you will have to take all these into consideration before taking any actions.
Hope I find a attached CRA ruling may help you.

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genew

This is not "stubborn" at all, but the way to deal with the laws :wink:.
The notes is on page 361.  However, it is just a note.  I agree with you - "anything" can be anything and is not defined in the act.
The fact is that your friend hada historical records with the tax authorities, had the GST/PST accounts registered, and this is indead a "commercial property" at the fist place.  You are right, you will have to take all these into consideration before taking any actions.
Hope I find a attached CRA ruling may help you.

Post by John_molson2003;3039718
Hi Genew,

Sorry for not responding your post last night, as I left my laptop in the company, and I coldd not access Canadian Income Tax Act in my laptop. However, after I checked the Income Tax Act this morning in Section 69(1), I couldn't find the notes your mentioned in the previous post. I use the electronic file: folio view Canadian Income Tax Act downloaded from the Order des compatables agrees du Quebec. I compared it with the content in the link I posted in previous post, they are almost the same. Sorry for my blind, could you indicate more precisely which note you were talking about or can you copy and post the notes you found in the Section 69(1) to the forum?

Sorry for my stubborn, the goal for me is to clear any doubtness and uncertainty about an taxation issue, not necessary aim to the individual case. Thank you again for your suggestion! If both sides have to contract in good faith, there is no way for my friend to avoid to adding the six month rental revenue to his personal income. He has his own G&Q number, and for the first six months, the G&Q applied to the rent have already been remitted to Revenue Quebec. Thus technically, Revenue Quebec knows how much rent for a half year period. If he didn't remit the G&Q for the second six months period, I am afraid Revenue Quebec will conduct an audit to my friend, unless he is free to decide whether he can charge or forgive the rental under Income Tax Act.

Hope to receive your post soon!

Ciao.

To mmttll:

当做生意时，要不要成立公司是一个很有趣的问题，也是注会考试常考的问题。你已经有自己的一些心得，我就不详细阐述了。

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协作会计

我同意你的观点，合同是更重要的。市场价本身就是弹性的评估。

而且你朋友的小店不挣钱也是见仁见智的，所以还是谨慎处理为好。

Post by genew;3039551
I personally believe this is a very practical question. I suggest you find a practical solution (for example, a lease contract good for both sides) instead of struggling with the non-arm`s length transaction.  

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John_molson2003

Hi Genew,

Sorry for not responding your post last night, as I left my laptop in the company, and I coldd not access Canadian Income Tax Act in my laptop. However, after I checked the Income Tax Act this morning in Section 69(1), I couldn't find the notes your mentioned in the previous post. I use the electronic file: folio view Canadian Income Tax Act downloaded from the Order des compatables agrees du Quebec. I compared it with the content in the link I posted in previous post, they are almost the same. Sorry for my blind, could you indicate more precisely which note you were talking about or can you copy and post the notes you found in the Section 69(1) to the forum?

Sorry for my stubborn, the goal for me is to clear any doubtness and uncertainty about an taxation issue, not necessary aim to the individual case. Thank you again for your suggestion! If both sides have to contract in good faith, there is no way for my friend to avoid to adding the six month rental revenue to his personal income. He has his own G&Q number, and for the first six months, the G&Q applied to the rent have already been remitted to Revenue Quebec. Thus technically, Revenue Quebec knows how much rent for a half year period. If he didn't remit the G&Q for the second six months period, I am afraid Revenue Quebec will conduct an audit to my friend, unless he is free to decide whether he can charge or forgive the rental under Income Tax Act.

Hope to receive your post soon!

Ciao.

To mmttll:

当做生意时，要不要成立公司是一个很有趣的问题，也是注会考试常考的问题。你已经有自己的一些心得，我就不详细阐述了。

Post by genew;3039547
my experience, and look at the notes in this section.   

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mmttll

恩,有意思,长知识.不过成立公司后,啥时候分红这个可以manipulate, 所以讲也有节税的效果吧.

genew

I personally believe this is a very practical question.  I suggest you find a practical solution (for example, a lease contract good for both sides) instead of struggling with the non-arm`s length transaction.

Post by John_molson2003;3039533
Hi Genew:

Thank you for your comments!. In the previsous post, you said ITA69(1) only applies to transafer of property and doesn't apply to supplying service between related parties. Is this your personal opinion, previous experience in similar cases dealing with CRA or Revenue Quebec, or you have other backup to support your point? For me, I am just worried about the word "Everything" in ITA69(1), as "Everying" can be explained as intangible things like services.

Ciao

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genew

my experience, and look at the notes in this section.

Post by John_molson2003;3039533
Hi Genew:

Thank you for your comments!. In the previsous post, you said ITA69(1) only applies to transafer of property and doesn't apply to supplying service between related parties. Is this your personal opinion, previous experience in similar cases dealing with CRA or Revenue Quebec, or you have other backup to support your point? For me, I am just worried about the word "Everything" in ITA69(1), as "Everying" can be explained as intangible things like services.

Ciao

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John_molson2003

Hi Genew:

Thank you for your comments!. In the previsous post, you said ITA69(1) only applies to transafer of property and doesn't apply to supplying service between related parties. Is this your personal opinion, previous experience in similar cases dealing with CRA or Revenue Quebec, or you have other backup to support your point? For me, I am just worried about the word "Everything" in ITA69(1), as "Everying" can be explained as intangible things like services.

Ciao

Post by genew;3039528
I didn`t see any case can apply to your situation.  What I suggest is to quantify the risk and calculate the cost-benefit associate with each way.  I think you have a very good point...ìntegration`.  

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genew

I didn`t see any case can apply to your situation.  What I suggest is to quantify the risk and calculate the cost-benefit associate with each way.  I think you have a very good point...ìntegration`.  

Post by 协作会计;3039368
首先出租房子是商业行为，然后才是会计行为。

你所说的这条法则这儿不适用。

房子出租的市场价是怎么定的呀？　你的邻居把一层楼租给他亲戚，才收500元一月。然后政府说：“这不行，你必须得租市场价。”　或者商家进货，然后以低价清仓等等。对一些商业行为，政府没有权利干涉吧？

你的朋友公司不挣钱，还是店不挣钱？　是不是有别的房间做别的业务？

后面算的公司税后净得我没核，有一点要注意。QC的小公司税不算太高，但上了一定金额，税率不一样。所以不能一概而论。公司都在抱怨DOUBLE　TAXES，　是有原因的。

QUOTE=John_molson2003;3039176]To mmttll:

你说的有一定的道理。那也是为什么我在前面的回帖中说最低工资应该有的缘故。但是你第二个理由是不成立的。加拿大税法最重要的一个原则是“Integrationrule": 就是说,个人的税负应该是一样的不管他成不成立公司。比喻说，你不成立公司做生意赚$100,你交个人所得税$20.那么你成立公司做生意赚$100,公司交$10公司税，再把剩下的$90,作为红利发给你，你就只应该再交$10个人所得税, 总共的税负都是$20。怎么样实现呢？就是通过DividendCredit来实现的。但是因为这个原则是由联邦政府制定的，而各个省的税率不一样，所以还是有一些差别，但是不会大到影响你做成不成立公司的决定。

我做了个测试，拿我们魁省做例子：你不成立公司做生意赚$10,000。（假设你在最低的税负一档：联邦15%，魁省16%,不考虑其他乱七八糟的Credit,, 因为后一种情况我也不考虑那些Credit),你交$3,100。最后到你口袋里是$6,900。你成立公司赚$10,000。公司联邦税$1,100（11%），魁省税$800(8%), 总共交了$1,900公司税。剩下$8,100作为红利发给你。$8,100先Grossup by 25%变成Taxabledividend: $8,100*1.25=$10,125。联邦税15%：$10,125*15%=$1,518.75。魁省税16%10,125*16%=$1,620。但是政府给你Dividendtax credit: $8,100*.25=$2,025。所以你的个人所得税是$1,518.75+$1,620-$2,025=$1,113.75。最后到你口袋里的是$6,986.25（$8,100-$1,113.75）。差别仅是$86.25,基本上达到了Integration的目的。而且，通过公司，看起来好像是抽了两次税，实际上税负还要低$86.25.

To genew:

I am glad that you have the same feeling as me regarding toITA69(1). Can you tell me besides ITA69(1) is there any other section in IncomeTax Act talking about RPT or Non-arm’s length transaction, which can be appliedto my friend’s case? Or if there is no related section in the Income Tax Act,can you show me some case law could be applied to my friend’s case?

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