GUARANTEED INCOME SUPPLEMENT (GIS)
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.
OLD AGE SECURITY (OAS)
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
Scenario 2 – People Living Outside of Canada
CALCULATIONS FOR OAS
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
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.
CANADA PENSION PLAN (CPP)
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:
PROVINCIAL SALES TAX (PST)
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%
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
Disadvantage: unlimited personal liabilities; limited life
Two Types of Partnership
Limited Liability Company (LLC)
All owners have limited liability, but they can also run the business
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
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:
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.
BECOMING A NON-RESIDENT OF CANADA
You are a non-resident for tax purposes if you:
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:
Other ties that may be relevant:
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.
Advantage of corporate-owned life insurance:
Deductibility of insurance for tax purposes: