Glossary: P

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Paid-Up Capital

Paid-up capital is the amount shareholders contributed for their shares, which can generally be returned to them tax-fre…

Passive Income

Passive income is income a corporation earns from investments rather than active business, such as interest, rent and po…

Payroll

Payroll is the process of paying employees and remitting the required income tax, CPP and EI withholdings to the CRA, al…

Personal Services Business (PSB)

A personal services business is an incorporated worker who would be an employee of the client but for the corporation, a…

Petty Cash

Petty cash is a small amount of physical cash a business keeps on hand for minor expenses, controlled through a float an…

Place of Supply

Place-of-supply rules determine which province's GST/HST rate applies to a sale, generally based on where the customer r…

Prepaid Expense

A prepaid expense is a payment made in advance for goods or services to be received later, recorded as an asset until th…

Prescribed-Rate Loan

A prescribed-rate loan is an income-splitting strategy where you lend money to a spouse or family trust at the CRA's pre…

Principal Residence Exemption

The principal residence exemption lets Canadians sell their main home without paying tax on the capital gain, for the ye…

Provincial Sales Tax (PST)

Provincial sales tax is a separate retail tax charged in British Columbia, Saskatchewan and Manitoba on top of GST, file…

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