 |
| |
Frequently Asked Questions
Questions:
What is Corporation Capital Tax (CCT)? |
|
The CCT is a tax levied on financial corporations with a permanent establishment in British Columbia and net paid up capital equal to or greater than a minimum threshold amount. Net paid up capital for a financial corporation is generally made up of the total capital stock, contributed surplus and retained earnings of the corporation, minus specific deductions. |
What is the threshold amount? |
|
For tax years ending after March 31, 2003, the CCT threshold amount for financial corporations is $10.0 million. Please see the Tax Rates and Threshold Amounts page for more information. |
What constitutes a financial corporation? |
|
For purposes of the CCT, a financial corporation is:
- a bank, including an authorized foreign bank, a trust company, or a credit union
- the agent, assignee, trustee, liquidator, receiver or other official in whose hands, or under whose control, all or any part of the property of a bank, trust company or credit union is placed
- an authorized foreign branch (see next question)
|
What is an authorized foreign branch? |
|
An authorized foreign branch is one which has been permitted by the Federal Minister, in accordance with the Bank Act.
The aggregate paid up capital of an authorized foreign branch is based on the branch's total risk weighted assets, capital deductions, and subordinated indebtedness.
An authorized foreign branch is allowed to deduct the investment allowance if, in the course of carrying on its Canadian banking business, it owns shares in another financial corporation having the same year-end date as that of the authorized foreign branch.
Authorized foreign branches are taxable under the Corporation Capital Tax Act if the branch has a permanent establishment in British Columbia and if the net paid up capital is equal to or greater than the threshold. The net paid up capital of associated financial corporations must be added to that of the authorized foreign branch in the determination of whether or not the authorized foreign branch exceeds the threshold. |
My company falls below the current threshold amount. Am I required to file a CCT return? |
|
Financial corporations that fall below the current threshold amount are exempt from the tax. However, the corporation should submit a return for the year in which the corporation falls below the threshold so that the branch may confirm the exempt status. |
How is the instalment amount calculated? |
|
Instalments are required if the previous year's annualized taxes were $3,000 or more. The required instalment amount is either ¼ of the previous year's taxes or ¼ of the current year's estimated taxes. Interest charges will apply if the current year's instalments are less than both the previous and current year's actual taxes payable. See Make a Payment for more information. |
When are instalments due? |
|
Instalments are due on the 15th day of the 3rd, 6th, 9th and 12th month following the month which begins the corporation's tax year. For example, if a company has a January 1 to December 31 fiscal year, instalments are due April 15, July 15, October 15, and January 15. |
How is interest calculated? |
|
Interest is assessed if the instalment payments, final payment, or payments on account are not received by the due date. Interest is calculated at 3% above the prime lending rate of the principal banker of the Province and accrues on a daily basis, compounded every 30 days. Interest rates are reviewed quarterly. See our Interest Rates page for more information. |
|
Penalties may be assessed for late or incomplete returns. Please see How to File for more information. |
When determining the paid up capital of an associated group, do I have to include the paid up capital of foreign associated corporations? |
|
Yes. Foreign associated corporations are included in the calculation of group net paid up capital. |
My financial corporation has amalgamated. What is the effect on our CCT? |
|
A CCT return is due from each predecessor company for the period up to the amalgamation date. A new fiscal year begins for the amalgamated corporation on the date of amalgamation. The new company assumes the instalment requirements of each of the predecessor corporations. A copy of the amalgamation certificate should also be submitted. |
Where can I contact someone about my CCT? |
|
Corporation Capital Tax is administered by the Income Taxation Branch of the Ministry of Small Business and Revenue. There are several ways you can contact us. |
How do I obtain a copy of the CCT return, schedules and guide? |
|
Please see our Forms page to download these documents. Or, you can contact us to have copies mailed to you. |
How do I obtain a CCT account number? |
|
CCT account numbers are assigned once a tax return or payment has been received. This number will appear on all future forms and returns we send you. Corporations may also have a CCT number assigned by advising us of the company name, address, taxation year end, contacts and other relevant information. |
How much money do I have in my instalment account? |
|
Due to confidentiality, we will confirm an amount by telephone but will not disclose information unknown by a taxpayer. A completed Schedule H (Authorization Form) must be submitted before information can be released to a corporation's accountant or other representative. See our Forms page to download Schedule H. |
Have you received my payment? |
|
Payments are reflected on your Statement of Account, which we send out one day after your payment has been processed, or on your instalment coupon, which we send quarterly. You will also be advised of the total amount of instalments credited to your tax year 75 days after the year end. |
When will my amended return be assessed? |
|
Amended returns are assessed on a "first in, first out" basis. |
|
Refunds are normally mailed out within 3 weeks of a return being assessed. Please see our Refunds page for more information. |
Can I make instalment payments? |
|
When agreed upon, short term payment arrangements are considered for a period of six months or less. For approval of payment proposals which are longer than six months, you will be asked to provide detailed financial information, and it will be necessary to secure the debt by registering a lien against your property. Interest continues to accrue on all unpaid balances. |
Do you accept credit card payments? |
|
No, we do not accept credit card payments. |
Are you a private collection agency? |
|
No, we are not a private collection agency. The Receivables Management Office is a branch of the Ministry of Small Business and Revenue that collects outstanding taxes owing to the province. |
What do you mean by "Legal Action"? |
|
The province has available remedies that it may use to collect overdue taxes under its various tax statutes. These remedies include:
- demands on bank accounts
- employers and third parties
- liens
- Certificates of Judgement
- Federal Government refund set-offs
- Writs of Seizure and Sale
|
Will legal actions have an effect on my (my company) credit rating? |
|
This will depend on the collection action which has been undertaken in an attempt to collect the outstanding balance. |
Why have I received a notice from the Land Title Office telling me a Judgement is registered on my property? |
|
The Land Title Office is required to send you a notice informing you that a lien has been registered on your property. This notice gives you an opportunity to dispute the lien if you believe the lien has been filed in error. You may receive this notice after your account has been paid or reversed. |
When will the lien on my property be removed? |
|
We will remove all collection action including a property lien once you have paid the account in full or the assessment of tax has been reversed. |
|
There are several ways in which you can pay. Please see Make a Payment for details. |
What should I do if I disagree with the amount I owe? |
|
If you disagree or do not understand it and would like more information, please call the number indicated on your notice or call 1-800-361-5050. |
|
|
 |
|
|
