top of page
bgImage

PERSONAL RESOURCES

GUARANTEED INCOME SUPPLEMENT (GIS)

General Information
GIS provides additional money, on top of Old Age Security, to low income seniors living in Canada. You only need to apply once for the benefit, and you will not need to re-apply as long as you file an income tax return each year. However, if you do not file an income tax return or the CRA requires more information, the CRA will send you a renewal application form in the mail. Once you receive it, you must complete this form even if you file an income tax return.


Qualifications for GIS

In order for you to qualify for GIS, you must be eligible for the Old Age Security (OAS) pension. Your eligibility also depends on the combined income of you and your spousal/common-law partner. On July 1, 2008, an amendment to the Old Age Security Act came into effect, increasing the GIS earning exemption to $3,500 from $500. If your annual income (not including OAS pension) exceeds $16,511.99 (single, widowed or divorced) or $21,839.99 (married or common-law partner), you do not qualify for GIS.

guaranteed
bgImage

OLD AGE SECURITY (OAS)

General Information
The OAS pension is a monthly benefit available to most Canadians 65 years of age or older who lived in Canada for at least 10 years. You can apply for OAS via a Service Canada application kit. You can get the kit by contacting Service Canada, picking it up from a Service Canada centre near you, or printing it from the Service Canada website.


Qualifications for OAS

The 3 main components to determine if you are eligible to receive OAS are your age, your legal status, and the number of years you have lived in Canada.

You may be eligible to receive full OAS pension in Scenario 1 and 2.


Scenario 1 – People Living in Canada

Must be 65 years of age or older (See Budget 2012 Changes)
Must live in Canada and be a Canadian Citizen or a legal resident at the time of pension approval
Must have lived in Canada for at least 10 years after the age of 18

Scenario 2 – People Living Outside of Canada

Must be 65 years of age or older (See Budget 2012 Changes)
Must be a Canadian Citizen or a legal resident of Canada the day before you left Canada
Must have lived in Canada for at least 20 years after turning 18

CALCULATIONS FOR OAS

Full Pension

1. Lived in Canada for at least 40 years after turning 18

2. Reached the age of 25 on or before July 1, 1977, and at that time: 

Lived in Canada

Did not live in Canada but you had some residence in Canada after the age of 18, or; you were in possession of a valid Canadian Immigration Visa and 

You lived in Canada for the 10 years immediately before the approval of your OAS application 


If you did not live in Canada continuously for 10 years immediately before the pension approval, you may still qualify if: 

You lived in Canada the entire year immediately before the approval of your application and

You lived in Canada (since age 18) for at least 3 years for every 1-year absence from Canada during these last 10 years


Partial Pension

The minimum period you need to qualify is 10 years of residence in Canada after age 18 (as long as you live in Canada when you receive your OAS pension). For example, if you lived in Canada for 10 years after your 18th birthday, you may qualify for ¼ of the full OAS. Once the partial pension is approved, you cannot increase the number of years of residency on which your pension is based.


oas

CANADA PENSION PLAN (CPP)

General Information

The CPP is a monthly taxable benefit to retired contributors. You can apply electronically and submit it online to Service Canada, or print the form and complete it by hand, then mail it to Service Canada.


Changes to CPP

Following are some of the changes implemented in January, 2011:

Monthly CPP retirement pension amount will increase by a higher percentage if taken after the age of 65
Monthly CPP retirement pension amount will decrease by a larger percentage if taken before the age of 65
Number of years of low or zero earnings that are automatically dropped from calculation of the CPP will increase
Contributors will be able to receive their CPP retirement pension without any work interruption
canada
provincial

PROVINCIAL SALES TAX (PST)

General Information

On April 1, 2013, British Columbia will return to a Provincial Sales Tax (PST) system. PST is a retail sales tax that is payable when a taxable good or service is rendered for personal or business use, unless an exemption applies.


Businesses need to register to collect PST if they sell or lease taxable goods, or provide taxable software or services in BC. You can register online, in person, or by mail/fax.


Examples of when you’re required to register:

You sell taxable goods like alcoholic beverages, motor vehicles, boats, building materials, household or office furniture

You lease motor vehicles, tools and equipment, aircraft and art work

You provide services to taxable goods like: 

  • Repairing or maintaining automobiles, knives, watches, TVs

  • Applying protective treatments such as fabric protection

You provide legal services or telecommunication services


Examples of when you don’t need to register:

You sell only non-taxable or exempt goods, such as food for human consumption, bicycles or children’s clothing

You provide only non-taxable or exempt services, such as transportation or dry cleaning services

You’re a wholesaler


PST Rates (Effective April 1, 2013) 

Items | PST Rates

Goods and services | 7%

Alcohol | 10%
Accommodation | 8%
Passenger vehicles:
Less than $55,000 | 7%
$55,000 to less than $56,000 | 8%
$56,000 to less than $57,000 | 9%
$57,000 or more | 10%
Other motor vehicles and trailers | 7%
Vehicles, boats and aircraft acquired from private individuals or non GST registrants (purchased or received as a gift) | 12%

FOUR TYPES OF FIRMS

Sole Proprietorship

Business is usually owned and run by one person
Typically have few, if any, employees
Advantage: easy to create

Disadvantage: unlimited personal liabilities; limited life

Partnership

Similar to sole proprietorship but with more than one owner
All partners are personally liable for all of the firm’s debts; a leader can require any partner to repay all of the firm’s outstanding debts
The partnership ends with the death or withdrawal of any single partner

Two Types of Partnership


General Partners:

Have the same right and liabilities as partners in a “regular” partnership
Typically run the firm on a day-to-day basis

Limited Partners:

Have limited liability and cannot lose more than their initial investment
Have no management authority and cannot legally be involved in the managerial decision making for the business

Limited Liability Company (LLC)

All owners have limited liability, but they can also run the business


Corporation

A legal entity separate from its owners:

  • Has many of the legal powers individuals have such as the ability to enter into contracts, own assets, and borrow money

  • The corporation is solely responsible for its obligations; its owners are not liable for any obligation the corporation enters into

Corporation must be legally formed

four

STEPS TO INCORPORATING COMPANY

To incorporate a company in BC, one or more persons (called the incorporators) may form a company by completing the following steps:

Reserve the company’s name with the Corporate Registry
Enter into an incorporation agreement
Establish the company’s articles and
File an incorporation application with the Corporate Registry

After you filed the Incorporation Application electronically and the company is incorporated, the Corporate Registry will send you the original Certificate of Incorporation, a certified copy of the Incorporation Application and a certified copy of the Notice of Articles. These documents must be kept by the company as part of the company’s records.

The fee to incorporate a company by filing an Incorporation Application using Corporate Online is $350.00 and a BC online service fee of $1.50 plus HST.

steps
becoming

BECOMING A NON-RESIDENT OF CANADA

You are a non-resident for tax purposes if you:

Normally or routinely live in another country and are not considered a resident of Canada
Do not have residential ties* in Canada and

A: You live outside Canada throughout the tax year or

B: Stay in Canada for less than 183 days in the tax year


*Residential ties include:

A home in Canada
A spouse/common law partner or dependants in Canada
Personal property in Canada, such as a car/furniture and
Social ties in Canada

Other ties that may be relevant:

Canadian driver’s license
Canadian bank accounts/credit cards
Health insurance with a Canada province/territory

Tax Obligations
As a non-resident, you pay tax on income you receive from sources in Canada. This applies to the year you leave Canada and each year afterwards, provided you remain a non-resident for tax purposes.

DEDUCTIBLE INSURANCE

Advantage of corporate-owned life insurance:

Lower after-tax cost of premiums
Increased flexibility in buy/sell situations
Possible collateralization and thus a source of cash for the corporation
Less cumbersome in multiple shareholder situation
Shareholder preferences for spending corporation rather than personal dollars
Increased assurance that funds are available to pay required premiums and that these premiums are paid on a regular basis

Deductibility of insurance for tax purposes:

When the policy is used as a collateral, a corporation may be able to deduct all or a portion of the life insurance premiums
Premiums are considered to be a taxable benefit received in an employment context
deductible
bottom of page