A holding company received a refundable dividend tax on hand (NERDTOH) in 2022 for dividends paid in 2021. I am confused where this refund should go in S125 because no receivable was booked in 2021 in the Financial Statements. the debit side is Cash but the credit would be <> ? and if it’s ‘‘other revenue’’, how can a refundable dividend tax be taxed again as other revenue? thank you in advance !
I suppose there is a reason why the company has not written up its books for 2022 and prepared its Financial Statements for 2022, but tell them you cannot even dream about preparing a T2 for them until they have done so properly. It might also help to look at the prior year financials and tax returns.
If the tax refund was not recorded on the 2021 return as receivable and or on the financial statements, Then record as current taxes 2022, no one will go to jail.
“If the tax refund was not recorded on the 2021 return as receivable and or on the financial statements, Then record as current taxes 2022, no one will go to jail.”
Well, I would not have brought this up at all on this thread, but in regards to S230 (books and records), recall that there does exist S238 for failures in more serious cases/situations:…
“238 (1) Every person who has failed to … comply with…any of sections 230 to 232 … is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to
(a) a fine of not less than $1,000 and not more than $25,000; or
(b) both the fine described in paragraph 238(1)(a) and imprisonment for a term not exceeding 12 months.”
thank you both ! I believe the previous accountant didn’t use the autofill to download the NERDTOH at the end of 2021 that was paid in 2022. otherwise, he would decreased the tax expenses. I will do it this year (although the holding receives dividend from a group and transfer these dividend to the shareholders, therefore, no income tax to be paid by the holding on the dividends I believe)
Meh - just book to current year taxes and fix the tax payable/receivable as at current year end and move on. It’s a trivial adjustment to a non-deductible amount in any event. Happens all the time in both directions where one estimates tax at F/S prep and it ends up being changed.