Tax Consulting in Canada: An Expats Guide

Embarking on an expat journey in Canada is thrilling, akin to setting off on a grand adventure across its vast landscapes. Yet, when it comes to tax consulting, even the most intrepid explorers can find themselves in unfamiliar territory.

Fear not, for our guide is the beacon you need, illuminating the path through Canada’s tax landscape with clarity, ease, and a dash of wit. Whether you’re a newcomer or a seasoned resident, we’re here to make tax consulting a breeze.

Let’s dive in!

What Is Tax Consulting?

A tax consultant advises and guides clients on tax-related matters. 

They work with individuals and organisations to ensure they comply with tax laws and help minimise potential tax liability.

Tax consultants typically have a deep understanding of tax law and accounting principles.

This role might be a good fit for detail-oriented, analytical individuals who enjoy working with numbers.

Many businesses engage tax consultants to assist with taxes. Organisations that employ tax consultants include accounting firms, law firms, banks, and real estate organisations. 

These specialists can also maintain self-employment.

Why Is Using A Tax Advisor Or Consultant Important?

Expertise and Knowledge

Tax consultants are well-versed in the constantly evolving tax laws and regulations. 

They undergo rigorous training and possess a comprehensive understanding of tax codes, deductions, credits, and exemptions. 

By leveraging their expertise, they can help you identify opportunities to minimise your tax liability legally. 

Whether you are an individual, a small business owner, or a corporation, tax consultants can provide personalized advice tailored to your unique circumstances.

Tax Planning and Compliance

Effective tax planning is essential to optimise your financial situation. 

Tax consultants can assess your financial position and develop strategies to reduce your tax burden. 

They analyse your income, investments, and expenses to identify potential deductions, credits, and exemptions that may apply to your situation. 

By staying abreast of the latest tax laws, consultants ensure that you remain compliant with all filing requirements and deadlines, minimising the risk of penalties and audits.

Minimising Tax Liability

One of the primary goals of tax consultants is to minimise your tax liability while staying within the bounds of the law. 

They employ various strategies such as structuring transactions, optimising deductions, and utilising tax-efficient investment vehicles. 

By strategically planning your finances, tax consultants can help you save money and increase your overall wealth. 

They can also advise on estate planning, retirement contributions, and charitable giving, enabling you to make informed decisions that align with your long-term financial goals.

Audit Assistance and Representation

Facing an audit from tax authorities can be a stressful experience. However, with the support of a tax consultant, you can navigate the process with confidence. 

Tax consultants are experienced in dealing with tax authorities and can guide responding to inquiries, organising documentation, and representing you during the audit. 

Their expertise ensures that you present a strong case while safeguarding your rights as a taxpayer.

Business Consulting

For businesses, tax consultants offer valuable insights beyond tax planning. 

They can assist with structuring your business in the most tax-efficient manner, guiding you through mergers, acquisitions, and other complex transactions. 

Tax consultants also provide financial analysis, helping you understand the tax implications of various business decisions. 

With their expertise, you can optimise your business operations, enhance profitability, and stay compliant with tax laws applicable to your industry.

What Are The Best Tax Advisors And Planners In Canada?

Taxsos

Taxsos is one of the leading tax advisory firms in Canada that helps solve tax problems for individuals and organizations.

Taxsos prides itself in cleaning up tax messes fast for less fees.

Taxsos offers free, confidential, and nonjudgmental tax consultation. Trusted by thousands of Canadians, Taxsos prevents CRA attacks.

Get started with Taxsos 🔥

Deloitte Consulting

Deloitte is a leading global accounting firm and professional services network. 

It offers audit, tax, consulting, enterprise risk, market research, and financial advisory services to business corporations. 

It operates in many countries including Canada.

Get started with Deloitte Consulting 🔥

Avalara Tax Research

Avalara Tax Research is a an online tax research and consultancy platform

It offers tax research tools and services for comprehensive, easy-to-understand tax insights.

With Avalara Tax Research tool, you quickly get updated transaction tax rules, rates, and regulations to help with tax decisions in both the U.S. and abroad.

It provides you with answers you need with tax research that’s easy to access and even easier to understand.

They provide tax research for sales and use, VAT, and GST related to your business.

Avalara helps you stay ahead of any audits as they provide you with audit defense support and access to tax explanations and citations for authorities and legal cases.

Get started with Avalara Tax Research 🔥

GTA Accounting

GTA is a professional tax accountant Services firm based in Toronto & Mississauga which specializes in accounting services.

This includes but is not limited to corporate tax returns, tax accounting services, bookkeeping services, tax preparation, financial statements, tax auditing, international and real estate tax, advisory services, estate planning.

In addition to this, they have HST and payroll services.

GTA helps small businesses as well as multinational companies to better manage their finances and grow their business. 

They have many clients located in Brampton, Toronto, Barrie, Mississauga, Oakville and throughout the GTA.

GTA Accounting prides itself on having professional experts who have boundless experience in business and tax accountants in Toronto & Mississauga. 

Get started with GTA Accounting 🔥

Blanchette Vanchon CPA

BVA is a chartered professional accountant firm with over 50 years of experience in offering accounting services to entrepreneurs and business organizations.

It has over 180 professionals with expertise in accounting and management.

Their services include but are not limited to corporate and personal taxation, sales taxes, certification, business advice, cost price and performance improvement, planning, purchase / sale and financing of businesses.

In addition to this, they also have special financial management and accounting services, payroll processing, assistance and training services for SMEs. 

BVA ranks as the 12th largest accounting firm in Quebec.

Get started with Blanchette Vancon CPA 🔥

DiPaola Di Pietro & Little Professional Corporation 

DiPaola Di Pietro & Little Professional Corporation is an accounting consultancy firm that offers advisory services in the areas of Accounting, Assurance, Taxation and Business Advisory services. 

Their services focus on private sector companies covering various industries such as medical, legal and other professional services firms, construction, automotive, restaurants, land and building development and technology firms.

Get started with DiPaola Di Pietro 🔥

What Comes Under The Duties Of A Tax Consultant?

A tax consultant provides tax advice and support to individuals, businesses, and organisations on various tax issues.

Their work typically involves preparing and submitting tax returns, researching tax laws, advising on tax planning, and representing clients in disputes with the tax authorities.

A tax consultant’s role may grow and shift as they mature in the position and become more involved in tax planning and management.

They could also specialise in tax research to advise team members and other stakeholders.

They primarily ensure that clients pay the correct amount of taxes.

For instance, a typical day in the life of a tax advisor might involve researching a notice of tax liability and recommending a strategy while filing a pending tax return and meeting with the IRS to handle any disputes.

Common duties include:

Preparing and Filing Tax Returns: Tax advisors collect information from clients, such as income and expenses, to calculate taxes owed.

Once computed, the tax consultant files a return with the appropriate regulatory body.

Researching Tax Laws: To ensure clients comply with the latest regulations, tax consultants may read tax law journals, attend seminars, and network with other tax professionals.

Research skills benefit organisations by ensuring that clients follow the law and pay the correct amount of taxes.

Representing Clients in Audits: Tax consultants represent clients during audits to ensure the tax return is accurate to minimize tax payments.

By guiding the process, they can reduce the time and money invested by the organisation and the overall tax liability.

Providing Tax Advice: These accounting specialists advise clients on how to minimise tax liability. This guidance may cover available deductions or types of income to report.

Assisting Clients with Tax Planning: A tax consultant may develop and recommend strategies to reduce taxable income, take advantage of tax breaks, or defer taxes later.

What Are The Tax Consulting Areas Of Expertise?

Tax consultants can concentrate their work on handling specific tax laws and regulations. 

By specializing in a particular field, these professionals can become experts in the tax laws and regulations that apply to that sector.

Tax Analyst 

A tax analyst researches tax laws and regulations, prepares tax returns and financial statements, and provides clients with tax planning and consulting services. 

They must have strong analytical and research skills and a thorough understanding of tax laws and regulations.

Tax analysts typically work in public accounting firms, corporate tax departments, and government agencies. 

Entry-level positions may involve preparing tax returns and financial statements, while senior positions may provide tax planning and consulting services. 

A tax analyst typically reports to the head of the tax department.

SEC Reporting Consultant

The Securities and Exchange Commission (SEC) reporting consultants can use backgrounds in accounting and finance to help clients comply with reporting requirements. 

They interpret SEC rules and regulations to communicate with clients and team members.

These niche accounting professionals typically work as employees or independent consultants in accounting firms, law offices, or corporate finance departments. 

Responsibilities include filing SEC reports, reviewing SEC filings for accuracy and compliance, and advising on disclosure requirements and best practices.

An entry-level position for this career path may be a staff consultant, while a tenured consultant could advance to a managing consultant role.

Tax Analysts And SEC Reporting Consultants

Tax analysts and SEC reporting consultants analyse and prepare tax documents. 

Each advises clients on tax law changes and potential business outcomes, but SEC reporting consultants also report disclosure requirements.

Both positions often advance professionally after becoming certified public accountants or obtaining master’s degrees in accounting or taxation.

How Are Taxes In Canada?

Canada has a comprehensive taxation system to pay for the many publicly funded health and social services that Canadians across the country enjoy.

While you may hear talk of the high taxes Canadians pay compared to Americans, Canada falls below average in a tax study of OECD countries. 

So, Canadians are taxed less than their French, German, New Zealand, UK, counterparts and others.

There are different types of taxes in Canada including income, sales, property, and corporate tax. 

Income tax in Canada makes up the largest portion of the federal government’s revenue. It generally funds almost half of the federal government’s budget. 

Both Corporate tax and Sales tax each account for about fifteen per cent of the federal government’s revenue.

Income Tax System

Canadian taxation is based on your residency and runs from January 1st to December 31st. If you are residing in Canada you should file a tax return each year by the deadline of April 30th. 

You are required to include income earned both inside and outside of Canada. If you are living outside of Quebec you must file one tax return which will include provincial and federal taxes. 

If you are living in Quebec you will file two returns separately for federal and provincial taxes. Similar to other countries, income taxes in Canada are progressive. 

This means that the more you earn, the more taxes you will pay.

Property Tax System

Property tax is a tax on an asset. If you own a home in Canada, you will need to pay property tax on it. 

Similar to other tax programs in Canada, the amount you pay will vary by location. Property tax is collected on a local level. 

Although no one enjoys paying taxes, property taxes cover several services including water, snow removal, garbage collection, policing, and fire protection.

Corporate Tax System

Corporations in Canada, including non-profits and inactive corporations, pay tax on both profits and capital. 

Corporate taxes are levied at the federal level, as well as the provincial level. 

The corporate tax rate therefore varies not only by the type and size of the corporation but also by its province of operation.

Sales Tax System

Canadians are also taxed on the consumption of most consumer goods and services. 

The federal government’s Goods and Services Tax (GST) and provincial governments’ Provincial Sales Tax (PST) are both applied to the majority of goods and services consumed in Canada.

In some provinces, the GST and PST are combined to form a Harmonized Sales Tax (HST). In other provinces, there is no PST. 

Because both the federal and provincial governments levy sales taxes, the tax rate on any consumer goods or service may vary by province.

One thing many people find shocking or confusing when they arrive in Canada for the first time is the price of an item at checkout. 

This is because in Canada, unlike many other countries, sales tax is usually not included in the advertised price. 

Depending on the province and type of goods or service, consumers can end up paying around five to fifteen per cent more than the listed price in taxes.

How Does Income Tax Consulting Services Help You?

When setting up and running a business, having a team consisting of a professional accountant and Canadian tax and business lawyers is paramount as an effective tax reduction strategy. 

Tax law is constantly changing, and tax consultants will ensure that you are up to date on tax rules and regulations affecting your small business and corporation. 

They provide expert Canadian income tax advice and assistance with:

  • Structuring business start-ups
  • Incorporations and shareholders’ agreements
  • Identifying tax planning opportunities for your business and corporation to minimise income taxes
  • Small business tax advice and medium business tax advice for the owner-manager
  • Partnership taxation and minimization
  • Joint venture taxation
  • Unfiled taxes including corporate back taxes and personal back taxes
  • Advising on the tax implications of proposed transactions including franchise tax planning
  • Real estate tax planning including joint ventures
  • Tax shelter and charity tax scheme disputes
  • International tax planning and offshore tax disputes
  • Scientific Research and Experimental Development (SR&ED) Tax Incentive Program
  • Cross-border tax issues including transfer pricing tax issues
  • GST/HST, excise taxes, customs duties, capital taxes, property transfer taxes, income tax, capital gains tax
  • Taxation of executives and employee compensation including Independent contractor agreements
  • Private Pension plans
  • RRSP meltdowns

What Is Tax Planning–Income Splitting?

A Canadian taxpayer’s income tax bracket and, therefore, the liability depends on the absolute amount of the taxpayer’s income because the higher the income, the higher the tax bracket and the percentage of income tax paid. 

Income splitting is a tax planning strategy whereby one taxpayer transfers a portion of his/her income to another taxpayer who is taxed at a lower tax rate. 

Various income-splitting techniques can be used, but your tax consultant needs to ensure that you do not become subject to the tax on split income (TOSI).

Income Splitting Tax Planning-salaries

A small business owner can often income split with a spouse by employing the spouse in the business as a T4 employee or by having the spouse own shares of the corporation and receive dividends.

However, your tax consultant needs to ensure that you do not become subject to the tax on split income (TOSI). 

Any salary paid must be reasonable and supported by the actual work done. A written employment agreement is very advisable. 

If the spouse or children are going to own shares of the business, care must be taken to avoid the attribution rules that attribute income or capital gains on the property back to the spouse who originally owned the assets.

What Should You Look For In A Tax Advisor?

Let’s face it: Taxes are as complicated as they are boring. If you’re having trouble sleeping at night, head on over to the IRS website and just start reading. That’ll knock you out real quick.

But tax advisors—the good ones—aren’t like the rest of us. They live, eat and breathe this stuff. 

They’re up-to-date on all the latest changes and trends happening in the Tax World so they can help you understand which tax laws, deductions and credits affect you.

But looking for a tax pro goes beyond head knowledge. Here are eight important qualities you should always look for in a tax advisor before you agree to trust them with your taxes:

1. They’re qualified and have the right certifications.

When you’re looking for a tax pro, you’ll want to work with someone who will give you quality advice. In other words, they know what the flip they’re doing!

When it comes to getting tax advice, find a pro who has one of these two certifications:

  • Enrolled Agent: An Enrolled Agent is a tax specialist for people looking for professional tax return preparation and tax advice. 

Plus, they’re licensed by the IRS to represent you if you’re being audited.

  • Certified Public Accountant (CPA): Certified Public Accountants specialise in tax preparation and planning, but they can also offer a bunch of other services to help you throughout the year.

This can start from bookkeeping to long-term financial planning. 

If your tax situation is complicated, a CPA can help with advice on tax strategies to follow based on your circumstances.

Enrolled Agents and CPAs both go through extensive training, testing and continuing education to maintain their credentials and stay up-to-date on tax laws and regulations so they can better serve you. 

Someone with just a preparer tax identification number (PTIN) isn’t going to cut it.

2. They’re available all year.

Nowadays, there are a bunch of part-time, fly-by-night tax preparers popping up during tax season only to disappear once they file your tax return, never to be heard from again.

Not even on a Christmas card or a magnetic calendar for your fridge.

As we said, things happen throughout the year that can have a big effect on how you file your taxes for that tax year. 

When life happens, having a reliable tax pro who will pick up the phone to answer your tax questions in September (not just January through April) can make a huge difference.

3. They understand your financial goals.

No matter where you are on the Baby Steps, it helps to have a tax advisor who’s on the same wavelength as you. 

That means they take the time to learn about you, your family and your financial goals so they can give you tax advice that will drive you closer to reaching those goals.

Whether they’re helping you adjust your paycheck withholdings so you can pay off debt faster or helping you identify potential pros and cons of taking your side hustle to the next level.

A great tax advisor is always looking for ways to help you move the ball down the field.

4. They make time to answer your tax questions.

When tax terms like deductions and itemised and adjusted gross income start getting thrown around, your head probably starts to flood with questions. 

Don’t worry, that’s a completely normal reaction.

Your tax advisor should always be ready to sit down with you and answer your questions. That’s what it means to have the heart of a teacher!

There’s a saying among tax pros that for every tax problem there is a solution that’s clear, uncomplicated and wrong. Good tax advisors know the right answers!

If you’re asking questions and your tax advisor rolls their eyes or gives you some highbrow answer that leaves you more confused than you were before, it’s probably time to look for a new advisor.

5. They’re proactive in communicating with you.

You don’t just want somebody who puts a rubber stamp on your return and walks away. That’s just lazy. 

You need a tax pro who will take the initiative and keep an eye out for things you might need to change for the upcoming year.

Did you get a big refund? No one wants to give the government an interest-free loan. Have you seen how they handle money? 

A good tax pro will take the time to explain that your employer has been taking too much money out of your paycheck for taxes and show you how to fix it.

Or what if you got slapped with a big tax bill? Your pro should be able to explain why you had to cut a check to Uncle Sam and how you can avoid getting blindsided next year. 

6. They can help you with small-business taxes.

If you have a small business or if you’re dreaming about starting one someday, it’s easy to forget about what that means for your taxes. 

But you’ll be glad you have a tax pro who has experience working with small-business owners and can help you navigate through small-business tax rates, estimated taxes and deductions you qualify for as a business owner.

7. They can help you with your taxes next year and the year after that.

Having a tax advisor you can turn to year after year can save you from having to explain the same things over and over again to a new random tax preparer every spring. 

Who has time for that?

Besides, it helps to have a tax advisor who knows you and your tax situation well enough to give you solid advice and strategies to help you reduce your tax bill.

8. They can be trusted with sensitive information about your finances.

Working with a friend or relative on your taxes might be tempting, but do you want a family member to know how much you make, how big your mortgage is or even if you tithe to your church? 

That could make Thanksgiving dinner kind of awkward!

You must find a tax advisor you can trust with all the nuts and bolts of your financial situation. 

Trust is the foundation of any strong relationship—including your relationship with your tax pro!

Conclusion

With the insights from our guide, tax consulting in Canada should no longer feel like navigating a dense forest without a compass. Armed with knowledge and the right resources, you’re now ready to tackle your tax obligations with confidence and savvy.

Remember, understanding the tax system is a key step in making the most of your expat experience in the Great White North. Here’s to mastering your finances with grace and wisdom.

Happy consulting!

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