Posted in Canada Revenue Agency, GST, HST, Income taxes, Restaurant Operations, Taxes, Tip Policies, tagged Audits, CRA, Gratuities, GST, HST, POS, Service charge, Taxes, Tip Pool, Tips on June 19, 2017| Leave a Comment »
A little while back, I was the main source for an article in a Globe and Mail about the taxation of tips in Canada. I’ve written about taxing tips before, here and here. In this post, I’ll give an update and discuss two problem areas that most restaurateurs need to know about. (more…)
Posted in Canada Revenue Agency, GST, HST, Income taxes, Taxes, tagged appeals, Audits, Canada Revenue Agency, CRA, GST, HST, Income tax, Liquor, Objections, Penalties, personal income tax, Sales Tax, tax audits, Taxes on June 18, 2017| Leave a Comment »
A restaurateur approached me just after he had received notice that his bar was going to be reassessed for HST on unreported sales. This was a fairly typical situation that many bar and restaurants find themselves in after an audit. There is always a way to “fight” or appeal these cases, at least in part. So, I took the case. (more…)
Posted in Canada Revenue Agency, HST, Income taxes, Restaurant Operations, Sales Tax, Taxes, tagged Audit assumptions, Audits, Canada Revenue Agency, CRA, Customer comps, HST, Income tax, Liquor, menu pricing, personal income tax, POS, Sales Tax, tax auditors, tax audits, Taxes, technology on June 21, 2012| 1 Comment »
A few months ago, Dining Date Night began offering customers a 30% discount at various restaurants in Toronto. In order to get the discount, a customer books a reservation on a website and pays a $10 fee to Dining Date Night. When the customer visits the restaurant, 30% of the total bill (before taxes) is deducted as a discount. This type of promotion is relatively good for both the consumer and the restaurant that provides the discount, because the restaurant can restrict the hours when reservations may be taken.
Posted in Canada Revenue Agency, GST, HST, Income taxes, Sales Tax, Taxes, tagged Audits, Canada Revenue Agency, Canadian Restaurateur, CRA, Customer comps, excise tax act, GST, harmonized sales tax, HST, Income tax, POS, Sales Tax, tax auditors, tax audits, Taxes, technology on June 20, 2012| 9 Comments »
I’ve written a couple of articles about Groupon on my sister blog, Canadian Restaurateur. This is part of a series that will cover accounting for Groupon certificates, setting up your Point of Sale (POS) system to properly track coupons and discounts, using QuickBooks to enter Groupon transactions, examining the tax treatment of Groupon certificates (this one), and finally, determining whether your restaurant should consider Groupon.
Posted in Canada Revenue Agency, HST, Income taxes, tagged Audits, Canada Revenue Agency, CRA, HST, Income tax, personal income tax, Taxes, technology on June 6, 2012| 1 Comment »
Many restaurant owners use their automobiles for picking up supplies for the business, researching other restaurants, and making trips related to the restaurant’s operations. In Canada, individuals are able to claim a reasonable portion of their automobile expenses against their employment income from the business. Even if you don’t draw a salary, you’re still considered an employee, by being a director of the company.
Posted in Canada Revenue Agency, Income taxes, Restaurant Operations, Taxes, tagged Canada Revenue Agency, CRA, Income tax, personal income tax, Restaurant Operations, Source Deductions, Taxes, tips and gratuities on May 29, 2012| 4 Comments »
If your restaurant pools or shares tips, charges automatic gratuities, or receives a tip-out “to the house”, this article could save you thousands of dollars.
If you’re like most restaurateurs, you probably think that the Canada Revenue Agency’s only concern about tips and gratuities is that servers report them on their personal income tax returns. While the CRA is concerned about this, now, they are even more interested in restaurants that fail to report certain types of tips.
The CRA’s policy on tips and gratuities can be found here. The rest of this article may shock you.
Posted in Canada Revenue Agency, Taxes, tagged Audits, Canada Revenue Agency, CRA, tax auditors, tax audits, tax evasion, Taxes on May 6, 2012| 1 Comment »
I’m certainly not saying that all, or even a significant number, of CRA’s tax auditors are corrupt, but this story in the Montreal Gazette highlights some very interesting issues surrounding restaurant tax audits.
The corrupt tax auditors seemed to focus on restaurants, knowing that they could “justify” large reassessments, unless the owners paid them bribes. In at least one case, the auditor asked for the bribe before auditing the restaurant! Finally, the auditors could just as easily make a restaurant appear to be reporting all of its income as it could make it look like they were evading large amounts of tax.
An RCMP investigation of Canada Revenue Agency employees has resulted in three former auditors being accused of shaking down restaurant owners for cash.
Posted in Canada Revenue Agency, Ministry of Revenue, Taxes, tagged appeals, Audits, CRA, Ministry of Revenue, notice of objection, Objections on February 8, 2012| Leave a Comment »
There are about 80,800 restaurants in Canada (CRFA), and about half are audited every four years. That’s a lot of restaurants being audited, and you just know that the majority of them receive reassessments at the end of each audit.
Rather interestingly, there are only about 10 significant court cases involving restaurants that had been audited using the mark-up method. How can this be?
Posted in Canada Revenue Agency, Taxes, tagged Audits, CRA, tax auditors, tax evasion on January 19, 2012| Leave a Comment »
While this story originates in the United States, it is just as applicable here, in Canada.
Reuters’ David Cay Johnston noted today that IRS auditors “assigned to the 14,000 or so largest corporations found $9,354 of additional tax owed for every hour spent testing tax returns in the 2009 fiscal year.” [bold italics are mine]
A few things to note.
Canadian Restaurant Tax Advisor 