The threshold on which corporations must pay income tax, GST and source deductions instalments is $3,000. The threshold will be based on 2023 tax amounts payable.
Certain Canadian-controlled private corporations are allowed to make quarterly, instead of monthly, income tax instalments. To qualify, certain conditions must be met, including the following criteria relating to the 2023 taxation year:
Instalment planning for 2024 can be addressed during 2023 by meeting the conditions where applicable.
With interest rates on overdue tax balances expected to rise to 10 per cent effective January 1, 2024, it is extremely important to pay instalments and any balances owing in a timely manner.
Where possible, maximize interest deductions by structuring or arranging your borrowings to be incurred, first for business or investment purposes, then for personal use.
Where certain business or capital property (e.g., shares, but not real estate or depreciable property) is disposed of or ceases to earn income, the interest incurred on the related borrowing may in some cases continue to be deductible.
Tax Season Odyssey 2024