Introduction to Taxation
ACCT375
Introduction Agenda
• Introduction videos, technical requirements
• Course Outline, Course Schedule
• Calendar, Attendance & Absences
• Platforms and Use
• External Resources
• Scavenger Hunt
• Debrief
SAIT Websites
• mySAIT
• mysait.ca
• Review your student record from
application to graduation
• Check your tuition balance,
course schedule, final grades,
graduation status, order
transcripts, and print your tax
receipt (T2202A)
• Make tuition payments
• Brightspace (D2L)
• learn.sait.ca
• Access course content,
resources, your inprogress grades, and
instructor's contact info.
• SAIT Email & Office 365
• Office 365 is available
to students with
your SAIT
email address.
SAIT Mobile Apps
• Ellucian GO: access your course schedule and
grades
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and sell used textbooks, connect with student
clubs, find out about upcoming virtual SAITSA
events and much more
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virtual safe walk and emergency notifications.
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• Accessibility Services
• Funding Advising
• Accessibility.services@sait.ca
• Academic Coaching
• Academic.coaching@sait.ca
• Learning to Learn Online ltlo.ca
• Tutoring Services
• Tutoring@sait.ca
Contacting Your Academic
Advisor
Email the Advising Team at
business.advising@sait.ca. In all communications,
please include your 9-digit SAIT ID number
Express Advising is available Monday – Friday, 1 PM
– 3 PM through Zoom, no appointment needed
Your lead advisor, is available for one-on-one virtual
advising appointments through MS Teams – advising
contacts in the School of Business
Determine ITA Division B
Income
Module 1 Part 1
Objectives
• 1.1 Explain the structure of the Income Tax Act (ITA).
• 1.2 Determine who is liable for Part I tax.
• 1.3 Determine the residence of an individual based on an evaluation of primary and
secondary ties.
• 1.4 Evaluate the residency status of an individual who is temporarily absent from
Canada or is only resident for part of the year.
• 1.5 Identify the type of individuals who will be deemed to be Canadian Resident
without regard to their actual Physical Location.
• 1.6 Identify deadlines for filing Income Tax Returns and payment of taxes.
• 1.7 Identify the steps for calculating Part I tax.
• 1.8 Apply the concept of income by source.
• 1.9 Apply the concept of income for the purposes of Division B.
1.1 Explain the structure of the Income
Tax Act (ITA).
Structure of the ITA:
Part I thru XVII - in divisions and subdivisions
Sections - (1-260)
Subsections - (Arabic numerals)
Paragraphs - (lower case letters)
Subparagraphs - (lower case roman numerals)
Clauses – (uppercase letters)
Sub clauses – (Uppercase roman numerals)
Reference Example:
ITA 84(1)(b)(i)(A)(I)
Sub clause 84(1)(b)(i)(A)(I)
84
(1)
(b)
(i)
(A)
(I)
1.1 Explain the structure of the Income
Tax Act (ITA).
• Division A - Liability For Tax
(Sec. 3 thru 108)
• Division B - Net Income For Tax Purposes
(Sec. 109 thru 114.2)
• Subdivision a - Employment
• Subdivision b - Business And Property
• Subdivision c - Taxable Capital Gains/Allowable Capital Losses
• Subdivision d - Other Sources
• Subdivision e - Other Deductions
• Division C - Taxable Income
(Sec. 115 thru 114)
• Division D - Taxable Income Earned in Canada by Non-residents (Sec. 115 thru 116)
• Division E - Tax Payable
(Sec. 117 thru 127.41)
Income Tax Act at Reg Ernhardt (SAIT) Library
1.2 Determine who is liable for Part I
tax.
Sec. 2(1) Tax payable by persons resident in Canada
An income tax shall be paid, as required by this Act, on the taxable
income for each taxation year of every person resident in Canada at
any time in the year.
Sec. 2(3) Tax payable by non-resident persons — Where a person who
is not taxable under subsection (1) for a taxation year
(a) was employed in Canada,
(b) carried on a business in Canada, or
(c) disposed of a taxable Canadian property,
at any time in the year or a previous year, an income tax shall be paid,
as required by this Act, on the person's taxable income earned in
Canada for the year determined in accordance with Division D.
1.3, 1.4, 1.5 Residency
Factual/Temporarily absent/Deemed residents
• Taxable on worldwide income for the entire year under Part I
Part-year residents
• Immigrants and emigrants
• Taxable on world-wide income under Part 1 for the portion of the
year resident in Canada
• For the portion of the year non-resident, taxable under Part I on
income earned from employment, carrying on business in Canada,
and disposition of taxable Canadian property. Taxable under Part XIII
on passive income, such as rents, royalties, Pension benefits, RRSP
payments, taxable and capital dividends.
Before next class
• Watch videos:
• See Course Schedule for MyLab videos specified for Classes 1 & 2
•
Residency
•
Determine Division B (net) income
•
Steps to Calculate Balance Owing or Refund
• Read pages : See Course Schedule for class 1 & 2 Readings
• Register For MyLab
• See instructions in D2L>Content>MyLab Pearson
• Homework: See Course Schedule for Recommended Problems
Determine ITA Division B
Income
Module 1 Part 2
Objectives
• 1.1 Explain the structure of the Income Tax Act (ITA).
• 1.2 Determine who is liable for Part I tax.
• 1.3 Determine the residence of an individual based on an evaluation of primary and
secondary ties.
• 1.4 Evaluate the residency status of an individual who is temporarily absent from Canada
or is only resident for part of the year.
• 1.5 Identify the type of individuals who will be deemed to be Canadian Resident without
regard to their actual Physical Location.
• 1.6 Identify deadlines for filing Income Tax Returns and payment of taxes.
• 1.7 Identify the steps for calculating Part I tax.
• 1.8 Apply the concept of income by source.
• 1.9 Apply the concept of income for the purposes of Division B.
1.6 Identify deadlines for filing Income
Tax Returns and payment of taxes.
Individuals
Year end
31-Dec
Filing
30-Apr
Ind. (& spouse) Dec 31 but
15-Jun
with business business can elect
Income
for a fiscal period
Pay tax
30-Apr
30-Apr
Deceased
Date of death,
and various for
elective returns
Later of:
Later of:
6 months after death 6 months after
or normal due date
death or normal
payment date
Corporations
choose a fiscal
period end
6 months after fiscal
period end
2 mons after y/e;
3 mons if SBD &
tax inc under
$500'
Late filed
return
Penalties
Balance of tax
owing X 5% + 1%
for each complete
month late: Max. =
17%
Late second Balance of tax
offence
owing X 10% + 2%
for each complete
month late: Max. =
50%
1.7 Identify the steps for calculating
Part I tax.
1. Determine Liability for tax
2. Calculate Division B Income – Net Income for Tax Purposes
Income by source and ordering rules
3. Calculate Division C Income – Taxable Income
Division B Income less eligible Division C deductions
4. Calculate Tax Owing / Refund
Determine Tax Liability before Tax Credits
Less Tax Credits,
Less income tax withholdings
Less installment payment
= Income Tax balance owing (refund)
1.8, 1.9 Division B (net) income
Sec. 4 Source
Source has two meanings:
• relating to the nature or character of the income itself. Employment
deductions are deducted from employment income; business
expenses are deducted from business income.
• relating to the geographical location from which income is derived.
Transactions are restricted to jurisdictions, provinces or countries.
• First, apply sourcing, then move to Sec. 3.
1.8, 1.9 Division B (net) income
Before next class
• Homework: See Course Schedule for Recommended Problems
• Due: Sat Jan 23: D2L Tests (Admin & Residency)
• Due: Sun Jan 24: MyLab (Chapters 1 & 2)
• Watch videos:
• See Course Schedule for MyLab videos specified for Classes 3
Taxable and Non-Taxable
Benefits – Class 3
Employee Interest Free
Loans – Class 3
https://youtu.be/pcKVe2Lv3bs
https://youtu.be/vp3YSkSqX1c
• Read pages : See Course Schedule for class 3 Readings