Deferred tax is an accounting item reflecting timing differences between when income or expenses are recognised for accounting versus for tax, creating future tax assets or liabilities.
Deferred tax arises because accounting rules and tax rules recognise some items in different periods. A common cause is depreciation: book depreciation and tax capital cost allowance differ, so the tax actually paid differs from the tax the accounting profit implies. The difference is recorded as a deferred tax liability (tax to be paid later) or asset (tax benefit to come).
Deferred tax is a financial-reporting concept under IFRS and ASPE, not a separate tax you pay to the CRA. It reconciles the tax expense on the income statement with the reality that book and taxable income diverge, and it can be significant for asset-heavy businesses.
A company claims more CCA than book depreciation early on, so it pays less tax now than its accounting profit suggests. The gap is recorded as a deferred tax liability, reflecting tax expected to be paid in later years.
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Most enquiries are settled without a phone call in My Account, My Business Account or Represent a Client, where assessments, balances, slips and CRA mail all sit. When you need a person, use the enquiries line for your programme from the contact page on canada.ca, and have your social insurance or business number plus a figure from a recent return ready for identity checks. Written enquiries go to the tax centre named on your notice of assessment.
Non-taxable income is money you receive that never enters taxable income. Common examples are lottery and most gambling winnings, gifts and inheritances, growth and withdrawals inside a TFSA, the GST/HST credit and Canada child benefit, most life insurance death benefits, and child support under current-rule agreements. A few amounts are reported and then deducted, such as workers' compensation and social assistance, because they still affect benefit calculations, so report anything that arrives on a slip even when no tax results.
Canada has no single payroll tax. The term covers the statutory amounts tied to employment income: federal and provincial income tax withheld at source, Canada Pension Plan or Quebec Pension Plan contributions, and Employment Insurance premiums, with Quebec Parental Insurance Plan premiums added in Quebec. Employers match CPP or QPP and pay a larger share of EI, and several provinces charge employers a separate health or payroll levy on total remuneration. Remittances go to the CRA, or to Revenu Quebec for Quebec employees.
No. Where you give your spouse funds and they contribute to their own TFSA, the income and growth inside that plan are tax free and nothing is attributed back to you. There is no spousal TFSA, so the contribution uses your spouse's own room and the account belongs to them. Attribution can still apply later: once the money is withdrawn and invested in a non-registered account, income earned on it may be attributed to you.
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Reviewed and fact-checked by Udit Gupta
Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. Big 4 trained at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia, he founded his accounting practice in 2014 to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
Editorial policy. Every page is researched against primary sources — the Income Tax Act, CRA publications and CPA Canada guidance — and every rate or threshold is stated with the tax year it applies to.
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