Canada BC Company Compliance and Maintenance Guideline Note
Unless otherwise mentioned, the British Columbia Corporation stated in this quotation specifically refers to the company limited by shares registered in accordance with Business Corporations Act, S.B.C. 2002, c.57 of British Columbia, Canada.
After successfully registered in Vancouver (British Columbia), the corporations are required to operate in compliance with the Business Corporations Act. This guideline note intends to provide a summary of those on-going compliance requirements for the interest of our clients.
The first section of the guideline note briefs the basic maintenance and reporting that a Vancouver (British Columbia) corporation is required to comply with, including annual report, registered office and registered agent and business license renewal.
The second section describes corporate income tax filing services, including federal and province income tax filing.
The third section describes the sales tax filing requirements, including Goods and Services Tax (GST) and Provincial Sales Tax (PST) filing.
The fourth section describes federal and province payroll tax filing.
The fifth section describes financial reporting, including bookkeeping service and the audit service of annual financial report.
The last section summarizes our compliance and maintenance services and costs to maintain a Vancouver (British Columbia) company in good standing. The fees listed are based on estimation and for reference purpose only. The final service fee may be different according to actual circumstances.
This guideline is not meant to cover all the compliance requirements imposed on a company by the Vancouver (British Columbia) and Canadian laws. If any issue of interest is not covered in this guideline, you are welcome to contact and consult our professional accountants.
- Annual Renewal Requirements
(1)
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Annual Report
All active business entities registered in Vancouver (British Columbia), Canada must file an Annual Report each year within two months after the anniversary date of the company’s incorporation, amalgamation, extra-provincial registration, or continuation into Vancouver (British Columbia).
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(2)
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Registered Office Address
Business Corporations Act requires that every business entity must have and maintain a registered office in Vancouver (British Columbia). The registered office must have physical street address in British Columbia for the purpose of service of notice.
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(3)
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Business License/Permit Renewal
If your corporation operates in City of Vancouver, you are required to obtain the city business license and renew it every year. Your city business licence expires on December 31 each year. Renewal notices are sent out in November by email or mail. All payments received after December 31 are subject to a late payment penalty.
Besides the city business license, if your corporation holds a business licence or permit issued by the Federal or Province Government because it engages in one or more regulated business, you are required to renew such a licence or permit each year in general.
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- Corporate Income Tax Filing
(1)
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Federal Income Tax (T2) Return
All corporations doing business in Canada must file a corporation income tax (T2) return every tax year even if there is no tax payable. The corporation’s tax year is its fiscal period. The Income Tax Return should be filed no later than six months after the end of each tax year. After the general tax reduction, the general net tax rate is 15%.
If you file the return late, a penalty applies. The penalty is 5% of the unpaid tax that is due on the filing deadline, plus 1% of this unpaid tax for each complete month that the return is late, up to a maximum of 12 months.
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(2)
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British Columbia Income Tax Return
Every business entity doing business in British Columbia is required to file a provincial income tax return regardless of the amount, if any, of its taxable income earned in the province. The provincial corporate income tax returns should be filed with the federal income tax return to Canada Revenue Agency by using your business number.
Vancouver (British Columbia) has two rates of corporation income tax ?the general rate and the lower small business rate. The general corporate income tax rate is 12%. Please note that the lower small business rate is only applicable to Canadian-controlled private corporations (CCPCs) with active business income eligible for the federal small business deduction. And the income eligible for the lower rate is limited of CAD500,000.
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- Sales Tax
(1)
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Goods and Services Tax (GST)
Generally, if your corporation in Vancouver (British Columbia) that makes taxable sales, leases, or other supplies in Canada and your annual world-wide GST taxable sales, including those of any associates, are more than CAD $30,000, you may be required to register for GST with Canada Revenue Agency. The rate of federal GST is 5%
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(2)
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Provincial Sales Tax (PST)
Provincial sales tax (PST) is a retail sales tax that applies when a taxable good or service is purchased, acquired or brought into British Columbia, unless a specific exemption applies.
Your British Columbia corporations need to register to collect PST if they sell or lease taxable goods or provide software or taxable services in the ordinary course of business in British Columbia. You may also need to register if the corporation located outside the province but make sales in British Columbia. Generally, the rate of PST is 7% on the purchase or lease price of goods and services.
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- Payroll Tax Filing
(1)
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Federal Payroll Taxes
If the business entities have employees and pay wages in Canada, they must register for a payroll program account with Canada Revenue Agency. They are required to report Canada Pension Plan (CPP) contributions, Employment Insurance (EI) and income tax withheld from their employees to Canada Revenue Agency periodically and deposit these deductions in trust for the Receiver General in a separate account from the operating business account. The business entities are also responsible for contributing Canada Pension Plan (employer’s share amount) and Employment Insurance premiums (employer’s share amount).
In most cases, business entities must remit the source deductions by the 15th of the month after you pay or give remuneration to your employees.
Business entities must file a T4 or T4A information return, as applicable, and send information slips to the employees each year by the last day of February following the calendar year that the information slips apply to.
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(2)
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Province Payroll Taxes
The employer health tax is an annual tax on an employer’s Vancouver (British Columbia) remuneration paid to employees and former employees in a calendar year beginning on January 1, 2019.
Employers with Vancouver (British Columbia) remuneration greater than $500,000 (exemption amount) in a calendar year must register for the employer health tax. The employer health tax rate is 1.95% - 2.925%.
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- Financial Reporting
(1)
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Financial Reports
Your corporation must keep certain corporate records at its registered office. And a corporation must prepare financial statements in accordance with the Generally Accepted Accounting Principles set out in the CPA Canada Handbook. In this regard, we suggest that you should keep all your accounting records and update the books of accounts on a regular basis to comply with the law.
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(2)
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Audit of Annual Financial Reports
In Vancouver (British Columbia), all entities are not required to appoint an auditor, and are also not required to arrange to have their annual financial statements audited. Public companies are required to submit the audit reports to the Canadian Securities Administrators annually per the list rules of the relevant stock exchange. It should be noted however, private companies may also want to have their financial reports audited annually or periodically for some other reasons, such as submitting the audited financial report to lending party or to investors.
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- Vancouver (British Columbia) Company Annual Maintenance Cost
As discussed above, all active Vancouver (British Columbia) corporations are required to operate in compliance with the British Columbia business laws. They may also need to apply for the license and permits with state according to different industries and locations. Kaizen is a professional CPA firm, offers complete compliance services and business support, such as bookkeeping, financial statement audit, filing tax return, making payroll, etc. The partial services for Vancouver (British Columbia) company’s annual renewal and maintenance are listed for your reference.
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Item
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Description
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Fee (USD)
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1
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Annual renewal including registered agent, registered office, annual report filing fees (Note 1)
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Yearly
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900
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2
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Business license/permits renewal (Note 2)
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Yearly
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TBD
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3
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Federal and province income tax returns filing (Note 3)
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Each
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800/up
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4
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Sale tax (GST/PST) filing (Note 4)
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Each
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150
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5
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Payroll tax filing and relevant services (Note 5)
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TBD
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TBD
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6
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Audit service (Note 6)
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Yearly
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2,000/up
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7
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Bookkeeping service (Note 7)
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Monthly
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300/up
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Note:
(1)
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Kaizen service fee for the annual renewal includes provision of the registered office, registered agent and annual report filing, but not including business license renewal service.
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(2)
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This is the official filing fee for renewal of business licence when your company holds one for reason of carrying out business in Vancouver (British Columbia). Kaizen does not charge service fee for handling the renewal of business license/permits for your Vancouver (British Columbia) company. The final amount depends on the number of locations of business operation your company may have in Vancouver (British Columbia).
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(3)
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Our service fee for Federal and province business income tax returns is depending on complexity and transactions of financial statements. Once we have the opportunity to review the books of accounts of your company, we will then prepare and provide an accurate quotation for your consideration.
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(4)
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Our service fee for quarterly sales/use tax filing is USD 150. If you need to file monthly return, our service fee is USD 120.
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(5)
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Our service fee for payroll tax filing and relevant services is based on numbers of employees. Please consult with Kaizen consultants for more details.
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(6)
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Our service fee for audit of annual financial statements is determined taking into consideration the business model of company, the complexity of the financial positions and the types and amounts of assets etc. Once we have the opportunity to review the books of accounts and financial statements of your company, we will then prepare and provide an accurate quotation for your consideration. In addition to audit of financial statements, we can also provide special audit and review services.
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(7)
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Our service fee for accounting and bookkeeping is determined taking into consideration the number of transactions. Other than updating books of accounts on a monthly basis, we can also update the books of accounts of your company on a quarter or annual basis. We can also prepare financial statements in a language other than English. |
See also:
Canada BC Corporation Incorporation Procedures and Fees
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