Tax Question:
Why is it important for owners and authorized officers of a non-resident company to be identified with the Canada Revenue Agency (CRA)?
Facts:
When registering your company with CRA it is important to provide them with a list of people that have proper authority because only the people CRA has on file are able to speak to, make changes with and sign tax related documents with CRA. If the list is incomplete, it can create issues when trying to contact CRA.
Discussion:
An individual with proper authority for a company can be:
- An owner
- A corporate director
- A corporate officer
- A partner of a partnership
- An individual with delegated authority
If the list changes, CRA needs to be notified right away. To update the list with CRA, you need to send them official documents about the change. This can become a significant issue if some people CRA has on file are no longer with the company and a change needs to be made or a document filed immediately.
When CRA has a different person on their list than the person who signs the income tax return, GST (Goods and Services Tax) tax return or any CRA form, that document can be rejected. This can cause significant time delays in getting a return or a form processed as CRA will likely send it back in the mail after it was already with CRA for several weeks and then have to go to the end of the line when sent back.
Companies newly registered with CRA may have only listed one individual with authority on their Canadian business number application form. It is important to provide a complete list to CRA so multiple individuals can sign documents. Having multiple individuals on file with CRA will help reduce delays when an authorized person is away and cannot sign documents.
Furthermore, it is important that CRA has a current list as directors of a corporation may be held personally liable along with the corporation if a corporation fails to deduct, withhold, remit or pay amounts owed to the CRA.
Angela Hardbattle, Dipl. T (Hons), CPA, CA
Manager, Gilmour Group CPA’s
Email: faqs@gilmour.ca
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