Single Administration of Corporate Tax
- When will the Canada Revenue Agency administer corporate taxes on behalf of Ontario?
- What corporate taxes will the CRA administer on behalf of Ontario and what corporate taxes will Ontario continue to administer?
- What are the benefits of the single administration of corporate tax for businesses operating in Ontario?
- Which provincial functions will be assumed by the Canada Revenue Agency CRA) under the single administration of corporate tax?
- Who will I call if I have a question about my Ontario corporate tax account such as corporate tax balance owing or installment payments and where should I send the payment?
- Where do I send my Ontario corporate tax instalment payments?
- When do I start sending my instalment payments to the CRA?
- When do I start filing my Ontario corporate tax return to the CRA?
- Do I continue to file the Annual Return with my Ontario corporate tax return?
- How and when will Ontario businesses and tax practitioners be kept informed about progress on the Corporate Tax Administration for Ontario initiative?
- What is a Tax Collection Agreement?
- What is the existing Canada-Ontario Tax Collection Agreement?
- What is the history behind the single corporate tax administration initiative?
When will the Canada Revenue Agency administer corporate taxes on behalf of Ontario?
Corporate taxpayers will start making blended instalment payments to the CRA in February 2008.
In April 2008, Corporate taxpayers will start seeing compliance cost savings from integrated audits, objections, appeals and rulings for pre-2009 taxation years.
Corporate taxpayers will start filing a single T2 Corporate Tax return with the CRA for taxation years ending after December 31, 2008.
For now, the Ontario Ministry of Revenue will continue to be your first point of contact for all matters regarding your Ontario corporate tax account. The CRA and OMoR will provide you with information about the move of Ontario corporate tax audits, objections, appeals and rulings to the CRA closer to the transition date of April 3, 2008.
What corporate taxes will the Canada Revenue Agency (CRA) administer on behalf of Ontario and what corporate taxes will Ontario continue to administer?
The CRA will administer the following corporate taxes on behalf of Ontario:
- Corporate Income Tax
- Corporate Minimum Tax
- Capital Tax
- Special Additional Tax on Life Insurers
Ontario will continue to administer:
- Mining Tax
- Insurance Premiums Tax
- Electricity Act payments-in-lieu of federal and Ontario corporate taxes.
What are the benefits of the single administration of corporate tax for businesses operating in Ontario?
Corporations could see a reduction in overall compliance costs of about $100 million annually and more consistency in the operation of the tax system. These benefits will arise as a result of:
- single tax return;
- single payment
- single audit; and
- single appeals process;
Essentially, businesses will be able to use a "single service window".
Which provincial functions will be assumed by the Canada Revenue Agency under the single administration of corporate tax?
The Canada Revenue Agency (CRA) will provide the same services to businesses that pay Ontario Corporate Income Tax that it currently provides for federal income tax. This includes functions such as:
- Payments processing;
- Returns processing;
- Audit;
- Appeals; and
- Collection of accounts receivable.
Who will I call if I have a question about my Ontario corporate tax account such as corporate tax balance owing or installment payments and where should I send the payment?
The Ontario Ministry of Revenue continues to be your first point of contact for all matters regarding your Ontario corporate tax account. Corporations should continue to send all instalment payments related to their Ontario corporate tax account to the Ontario Ministry of Revenue and all instalment payments related to their federal tax account to the Canada Revenue Agency (CRA). Corporations will be notified in advance of any changes.
Where do I send my Ontario corporate tax instalment payments?
All instalment payments related to your Ontario corporate tax account should be sent to the Ontario Ministry of Revenue. Corporations will be notified in advance of any changes.
When do I start sending my instalment payments to the CRA?
For now, corporations should continue to send all instalment payments related to their Ontario corporate tax account to the Ontario Ministry of Revenue and all instalment payments related to their federal tax account to the Canada Revenue Agency (CRA).
Both governments anticipate that corporations will be making combined corporate tax instalments in 2008 for tax years ending on or after January 1, 2009.
Corporations will be notified in advance of any changes.
When do I start filing my Ontario corporate tax return to the CRA?
Both governments anticipate that corporations will be filing a single corporate tax return in 2009 for tax years ending on or after January 1, 2009.
Do I continue to file the Annual Return with my Ontario corporate tax return?
Yes. The Annual Return should continue to be filed with the Ontario corporate tax return. Corporations will be notified in advance of any changes.
How and when will Ontario businesses and tax practitioners be kept informed about progress on the Corporate Tax Administration for Ontario initiative?
The Canada Revenue Agency and the Ontario Ministry of Revenue are both committed to keeping stakeholders informed on a timely basis when major milestones in planning and implementation are reached.
What is a Tax Collection Agreement?
A Tax Collection Agreement is an arrangement under which the Government of Canada and the government of a province or territory agree that Canada (i) will collect and administer taxes that are imposed under provincial or territorial legislation and (ii) will pay the province or territory its share of the taxes collected. The province or territory also commits to harmonizing certain key elements of their provincial taxes with the federal tax.
What is the existing Canada-Ontario Tax Collection Agreement?
The existing Canada-Ontario Tax Collection Agreement is the agreement between the two governments that authorizes the federal government (via the Canada Revenue Agency) to collect and administer Ontario personal income tax. That agreement has been in place since 1962.
What is the history behind the single corporate tax administration initiative?
In May 2004, Ontario and the federal government signed an agreement that committed both governments to explore opportunities for collaboration in delivering public services. In November 2004, this collaboration was extended to include federal administration of Ontario's corporate taxes. In May 2005, the federal government committed to provide funding for this initiative.
In May 2006, Ontario passed legislation that would enable the Canada Revenue Agency (CRA) to audit Ontario's corporate taxes for taxation years ending before a single corporate tax return is implemented in 2009.
In October 2006, a Memorandum of Agreement (MOA) was signed, which confirms the commitment of the federal government and the Ontario government to transfer the administration of corporate income tax from the Tax Revenue Division to the Canada Revenue Agency (CRA). The MOA outlines what both governments must do to amend the Canada-Ontario Tax Collection Agreement (TCA) to include corporate income tax. Currently, the TCA allows the CRA to administer only personal income taxes for Ontario.
In December 2006 Bill 174 which amends Ontario corporate tax legislation to harmonize with the federal corporate income tax base and collection system, was introduced in the Ontario legislature. This legislation, Bill 174, builds on a Memorandum of Agreement, signed in October.
