My jurisdiction is: BC, Canada
Our Corporation is registered in BC, Canada since 2000, and we pay Corporation Tax each year. In all business year except current year (year end in May 2008), small business deduction is applied to our business tax.
But in current year, after tax return, The Corporation Notice of Assessment is with much different amount than our calculation. The major difference is that the assessment does not apply the small business deduction to our business tax return. I called CRA officer, and the officer says because in current year, our expenses amount more than revenue amount, then system auto turns to zero, so our business becomes in-active.
Please notice that in current year, the only difference comparing with other years is that our business revenue has significantly reduced. In current year, we have expenses amount than greater than revenue amount. In other years, we have revenue amount greater than expenses amount.
I have the two questions:
1) Business active or in-active does not depend on the total amount of Revenue and Expenses, but depend on
whether we work hard for our business or we do not do something for business. Is correct?
2) About small business deduction rule. We did read carefully about small business deduction rule, but we never see that the small business deduction only can apply the year when revenue amount greater than expenses amount. If this year, we have more loss, then we still can apply small business deduction and can get some tax back from other years. Is correct?
Many thanks for your assistance and looking forward to hearing from you soon.
Our Corporation is registered in BC, Canada since 2000, and we pay Corporation Tax each year. In all business year except current year (year end in May 2008), small business deduction is applied to our business tax.
But in current year, after tax return, The Corporation Notice of Assessment is with much different amount than our calculation. The major difference is that the assessment does not apply the small business deduction to our business tax return. I called CRA officer, and the officer says because in current year, our expenses amount more than revenue amount, then system auto turns to zero, so our business becomes in-active.
Please notice that in current year, the only difference comparing with other years is that our business revenue has significantly reduced. In current year, we have expenses amount than greater than revenue amount. In other years, we have revenue amount greater than expenses amount.
I have the two questions:
1) Business active or in-active does not depend on the total amount of Revenue and Expenses, but depend on
whether we work hard for our business or we do not do something for business. Is correct?
2) About small business deduction rule. We did read carefully about small business deduction rule, but we never see that the small business deduction only can apply the year when revenue amount greater than expenses amount. If this year, we have more loss, then we still can apply small business deduction and can get some tax back from other years. Is correct?
Many thanks for your assistance and looking forward to hearing from you soon.
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