News

Tax rates on dividends changed for 2006 and beyond

On June 29, 2006, the Department of Finance released draft legislation which outlines how the government intends to implement recently announced changes to the taxation of dividends. The government required 66 pages to outline the details, which are technically complex.

Based on the latest information, the top tax rate on dividend income for a Quebec resident for 2006 and beyond will be 36.4% on dividends from private companies and 29.7% on dividends from public companies. In 2005 the top tax rate on dividends was 32.8%.

The top tax rate on dividend income for an Ontario resident on dividends issued by public companies will be reduced from 31.3% to 22.4% in 5 annual rate reductions ending in 2010.

The record keeping relating to dividends will now become considerably more complicated, and require a company to keep track of two new tax pools out of which dividends are issued: a general rate income pool ("GRIP"), and a low rate income pool ("LRIP").

Now that the draft legislation is released, tax practitioners await the various provincial responses. Such provincial responses are necessary in order to evaluate what the combined federal-provincial tax rates will be on eligible dividends across Canada. As of August, 2006 both Quebec and Ontario have announced their intentions regarding the federal changes, however these have yet to become law.

The release of this draft legislation reflects a significant change in tax policy. We invite you to contact your engagement partner to review the impact of the new dividend rules on your tax position.

UHY Victor welcomes Microsoft

UHY Victor is pleased to announce that it has been engaged by Microsoft Corporation to assist with the development and testing of a new software package being developed for the Canadian market.

UHY Victor Presentation - December 2006

We are pleased to announce that Jonathan Levy (Partner) made two presentations entitled: "Holding Corporations: The Good, the Bad and the Ugly" in December 2006 to the Montreal Accountants Study Group and the Society of Trust and Estate Practitioners (STEP).

UHY Victor Presentation - March 2007

We are pleased to announce that Ken Shemie (Partner) made a presentation entitled: "Ten Ways a Chartered Accountant Can Help Your Business Succeed" in March 2007 to the Choice Business Club.

UHY Victor Partner appointed Chair of UHY Canada US Tax Team

The UHY Victor team congratulate Jon Levy on his recent appointment to the position of Chairman of the UHY Canada US Tax Team. We wish him success in this important professional endeavour.

2007 Federal Economic Statement Promises $60 Billion in Tax Cuts Over Six Years

Minister of Finance Jim Flaherty presented the minority government's 2007 federal Economic Statement on October 30, 2007. The Economic Statement presents a number of tax measures that will save corporate and individual taxpayers almost $60 billion over six years.

Corporate Tax Measures

General income tax rates
The general and manufacturing and processing income tax rates will be reduced in steps from 22.12 % in 2007 to 15% in 2012.

The Economic Statement presents objectives to the provinces and territories to reduce their corporate income tax rates to 10% by 2012.

The government's goal is to achieve a combined federal/provincial and federal/territorial corporate income tax rate of 25%, which would make Canada's general corporate income tax rate the lowest among the G7.

The reductions also apply to the distribution tax on publicly traded income trusts and partnerships. In addition, the government will consider adjusting the dividend tax credit for eligible dividends to take into account the general rate reductions.

Small business rates
The small business threshold will remain $400,000, but the small business rate reduction to 11% is accelerated to 2008.

Personal Tax Measures

The measures to reduce personal income taxes announced will save each personal taxpayer earning taxable income over $37,178 roughly $200 per year, commencing in 2007.

Lowest personal tax rate
The lowest personal income tax rate (which applies to income up to $37,178) is reduced to 15% (from 15.5%) retroactive to January 1, 2007.

Personal amounts
The basic personal amount, as well as the spouse/equivalent to spouse (or wholly dependent relative) personal amount, is increased in 2007 to $9,600 (from $8,929).

Goods and Services Tax
The goods and services tax (GST) is reduced from 6% to 5% on January 1, 2008.

2007 Ontario Economic Outlook

Ontario's Economic Outlook and Fiscal Review, delivered on December 13, 2007, includes tax measures that promise limited relief to certain corporations and individuals.

Corporate Tax Changes

The Economic Outlook and Fiscal Review increases Ontario's small business rate threshold to $500,000 retroactive to January 1, 2007.

Capital tax will be eliminated on January 1, 2008 for Ontario companies primarily engaged in manufacturing or resource activities, including forestry.

If a corporation's salaries and wages relate to manufacturing or processing, mining, logging, farming or fishing activities as a percentage of its total salary and wages in Ontario are:

- 50% or more – capital tax will be eliminated on January 1, 2008;

- less than 50%, but more than 20% – capital tax will be reduced on a straight-line basis until July 1, 2010, when it will be eliminated, as previously scheduled.

- 20% or less – capital tax will be eliminated on July 1, 2010, as previously scheduled.

For other corporations, the capital tax rate cuts that were scheduled for January 1, 2009 are accelerated to January 1, 2007.

Both the Ontario Film and Television Tax Credit (OFTTC) and Ontario Productions Services Tax Credit (OPSTC) are increased.

Personal Tax Measures

Land Transfer Tax Refund
The Land Transfer Tax (LTT) Refund Program for First-Time Homebuyers will be expanded to include purchases of resale homes, allowing first-time homebuyers of resale homes to receive a refund of up to $2,000 of LTT. This change will apply to agreements of purchase and sale entered into after December 31, 2007.

Labour-Sponsored Investment Funds
Ontario's Labour-Sponsored Investment Fund maximums are increased to $7,500 and the corresponding tax credit program is extended to 2011.

Name change from February 1, 2008

Victor & Gold is an active member of UHY, a leading international association of independent accounting firms providing accounting, tax and consulting services around the globe. We joined UHY in 1987 to offer a wide range of international services to our clients. Over the last 20 years we found that this membership has provided our clients with the connections required to expand internationally, quickly and efficiently.

After 75 years of serving the business community we have decided to rebrand adding UHY to the Victor name. On February 1, 2008 we are changing our name to UHY Victor to further reflect our commitment to the international requirements of our clients. Notwithstanding our name change, we continue to be an independent member of UHY, owned and operated by the Montréal Partners.

The UHY network is one of the fastest growing international accounting associations. UHY members operate across 198 business centres in 66 countries worldwide. Member firms are modern businesses, knowledgeable of local regulations, market practices and cultural norms, creating opportunities for extending business interests. UHY has the operational depth and breadth to help your business grow cross-border and overseas.

Children's Fitness Tax Credit

For each of your children under 16 years of age at the beginning of 2007, you are eligible to a maximum amount of $500 per year for expenses paid in 2007 to register them in a physical activity program. If one of your children qualifies for the disability amount and is under age 18 at the beginning of 2007, you may claim an additional $500 as long as registration fees of at least $100 were paid for registering to the program.

To be eligible, the program must be ongoing (one session per week for at least eight weeks or five consecutive days in the case of a children’s camp), supervised, and suitable for children. Substantially all of the program’s activities must include a significant amount of physical activity.

If some of the expenses you paid also qualify as child care expenses, these expenses must first be deducted as such. In 2007, only Manitoba, Nova Scotia and the Yukon have programs that are similar to the federal program.

UHY Victor - in the news!

Accounting help available for seniors (by: John Archer)
Monday, July 28, 2008

One of the biggest concerns of growing old is the inability to take care of oneself.

What does one do if their health begins to fail somewhat, but not enough to be hospitalized? What happens if one is unable to do their banking, balance their chequebooks, sort out their bills and keep track of who has been paid and who has not? Fortunately, getting help from the outside can be a lot easier and a lot safer than you may think.

According to Gina Raposo, director of Private Health Care Services with Almyer-Must Healthcare Services in Montreal , "we can have a nurse's aide at someone's home within four to six hours notice. This aide can help the patient with his or her cooking, bathing, buying groceries, laundry, light housekeeping, cooking, keeping track of medications, getting prescriptions filled - virtually all of the daily tasks one would normally try to do on their own but find that due to temporary illness or longer- term deteriorating general health, they are unable to do themselves."

For more complicated health issues like administrating injectable medicines, registered nurses can be sent to individual's homes.

Knowing this can give comfort not only to potential patients, but also to the elderly person's family, who might be living in other parts of the country and find themselves frustrated and worried that they cannot lend their parents a hand in their moment of need.

"In some cases, we even send a nurse's aide to sit with a patient who is hospitalized. Our aides can supplement some of the bedside-care services of the hospitals where many of the staff nurses are stretched to the limit and may not be able to provide the constant or immediate care some of our patients might hope for while they are bedridden."

However, you must choose your caregivers with caution because you do not want just anyone walking into your home. The same goes for those who might assist you with organizing or helping you keep track of your finances.

This has become such a growth industry that the Canadian Institute for Chartered Accountants has developed an elder-care discipline to define, educate and monitor specific services for the elderly. By dealing with chartered accountants with their own code of conduct and practices, individuals can be confident that they can open their books to trained individuals who will guide their finances accordingly.

An accountant trained in senior care services can assist in cheque writing, investment monitoring, cash-flow management, tax planning, tax-return preparation and even healthcare services evaluation. It is really like having an experienced partner that you can trust.

Each Canadian province has a list of qualified practitioners who have made it a point to incorporate elder-care services into their practices.

Jon Levy, a chartered accountant with UHY Victor in Montreal , says: "We find clients often simply begin to lose confidence in themselves. They get confused with some of the technical details. Inevitably, we see them crisscrossing cheques and making double payments. This causes confusion, which can then have a domino effect on all of their finances."

As part of this service, the accountants will also keep an eye on other professionals as well.

"Last year, one of our clients had scores of transactions in his securities account. This was for a client in his 80s! We found this to be inappropriate, so we started asking some questions and discussed it with the client's son to verify whether all of this was above board."

"We also will prepare reviews or reports to share with family members should the client want us, too. On the other hand, some clients hire us because they do not want their kids involved with their financial affairs. Sometimes this in itself can be a very good idea," Levy said.

So while it might not be much fun getting older, at least one can be reassured that there is help out there for those who want it and can afford it.

John Archer is an investment adviser with RBC Dominion securities in Montreal .

john.archer@rbc.com
The Gazette ( Montreal ) 2008

Canada – US Tax Team

Montreal, Canada (February 3, 2009) - UHY International member firms UHY Advisors (USA), UHY LDMB (Vancouver), UHY Victor (Montreal), Goldfarb, Shulman, Patel (Toronto) have created a joint knowledge group to address the rapidly expanding needs of companies and individuals related to U.S.-Canada cross-border tax and business issues.

“With our hands-on tax experts, the group brings both the knowledge and experience required to assist clients in planning and implementing solutions to deal with US-Canada cross border issues” said UHY CUTT Chairperson Jonathan Levy. “Collaborating on technical issues from both sides of the border ensures that our solutions are properly integrated and effective in both the U.S. and Canada,” Levy added.

Recent changes in both US and Canadian tax legislation, along with the fifth protocol to the US-Canada tax treaty, have rendered many existing business structures and arrangements ineffective.

Member firms who are part of the CUTT group can assist with:

Corporate

Structuring of cross-border business expansion with consideration of:
‧ Integrated tax minimization
‧ Utilization of possible losses
‧ Repatriation of profits
Compliance with Federal, State & Provincial tax laws
Payroll administration and year-end reporting requirements
Analysis of available corporate tax incentives and government assistance
Establishing an effective transfer pricing policy
Performing transfer pricing analysis
Sale of a cross-border business
Cross-border real estate ventures
Developing local business & banking contacts

Personal

Preparation of US and Canadian personal income tax returns
Analysis of the tax ramifications of a cross-border move
Expatriate tax planning and preparation

Estates and Trusts

Cross-border Trust and Estate planning and administration
Tax planning to minimize exposure to US Estate Taxes

Jonathan Levy, CUTT Chairman
514-282-1836 ext. 275
jlevy@uhyvictor.com

Federal Budget 2009

Federal Minister of Finance Jim Flaherty presented the minority government's budget on January 27, 2009.

Personal Tax Changes

Personal income tax amounts and brackets

Tax relief is provided to all personal taxpayers:

The 2009 basic personal amount, spousal and common-law partner amounts and eligible dependant amount are increased to $10,320 from $10,100

In 2009, taxable income will be subject to the 22% federal tax rate for income above $40,726, instead of $38,832, and the 26% federal tax rate for income above $81,452, instead of $77,664

Age tax credit

The 2009 age tax credit, which applies to individuals who are age 65 or older, will increase by $1,000 to $6,408, providing up to $150 of additional income tax relief. The income level at which the age credit is fully phased out will increase from $68,365 to $75,032 for 2009.

Home renovation tax credit

Homeowners can claim a non-refundable 15% tax credit on eligible home renovation costs incurred and paid after January 27, 2009, and before February 1, 2010, under agreements entered into after January 27, 2009.

The tax credit is available on expenses exceeding $1,000, but a maximum of $10,000 of expenses qualify per family unit, so that the maximum credit will be $1,350 (i.e., $9,000 x 15%).

Home Buyers' Plan

Commencing January 28, 2009, first-time home buyers can withdraw $25,000 from a Registered Retirement Savings Plan (RRSP) to purchase or build a home, without incurring tax. Previously, the limit was $20,000.

First-time home buyers' tax credit

First-time home buyers that acquire a qualifying home after January 27, 2009, can claim a 15% non-refundable tax credit on up to $5,000, for a maximum credit of $750. If a home is purchased jointly, the total credit that may be claimed by all purchasers is $750. The unused portion of the credit can be transferred to a spouse or common-law partner.

RRSP/RRIF losses after death

When the final distribution of property from a deceased annuitant's RRSP or registered retirement income fund (RRIF) occurs after 2008, the amount of any post-death decrease in the value of the RRSP or RRIF can be carried back and deducted against the RRSP and/or RRIF income inclusion for the year of death.

Mineral exploration tax credit

The mineral exploration tax credit for flow-through shares is extended by one year to flow-through share agreements entered into before April 1, 2010.

Business Tax Changes

Interest deductibility

The budget proposes to repeal section 18.2 of the Income Tax Act, which would have restricted certain interest and borrowing costs payable after 2011 on funds used to finance foreign affiliates. This section was intended to prevent multi-national corporations from using tax havens and other tax structures to generate two expense deductions for only one investment, so called "double dipping."

Non-resident trusts, foreign investment entities and foreign affiliates

The government will further review existing proposals relating to non-resident trusts, foreign investment entities and foreign affiliates in light of recent submissions before proceeding with these measures.

Capital cost allowance

Enhancements to the capital cost allowance (CCA) rules provide tax relief to businesses:

Manufacturing and processing (M&P) assets – Eligible M&P assets acquired in 2010 or 2011 will qualify for 50% CCA on a straight-line, rather than accelerated declining balance, basis

Computers and software – Eligible computers and systems software acquired after January 27, 2009, and before February 1, 2011, will qualify for 100% CCA and will be exempt from the half-year rule

Tax relief is provided to CCPCs:

Small business threshold – The limit up to which the small business income tax rate applies is increased to $500,000 from $400,000, retroactive to January 1, 2009. This change also means that more CCPCs can pay quarterly, instead of monthly, instalments and will have an additional month to pay any balance of tax owing

Scientific research and experimental development – The taxable income phase-out range for the $3 million annual expenditure limit will be $500,000 to $800,000 when a CCPC's previous taxation year

Acquisition of control – Relief will be provided on the acquisition of control of a CCPC to preserve its status as a CCPC at the time of the acquisition

Filing corporate tax returns

Commencing for taxation years ending after 2009, corporations with annual gross revenues over $1 million for a taxation year must file their income tax returns for the year electronically. Exceptions may be provided. Penalties will apply to corporations that do not comply. However, penalties will be reduced for late or incorrectly filed information returns.

Commodity Tax Changes

Machinery and equipment

Tariffs on a range of machinery and equipment imported into Canada after January 27, 2009, will be eliminated or reduced.

Direct selling industry

Direct sellers that use a network of commission-based sales representatives to sell goods and that meet certain conditions will be allowed to use a special GST/HST accounting method. This change will simplify GST/HST compliance and will be available for fiscal years beginning after 2009 if an election is filed.

Other Changes

Employment insurance

Employment insurance rates for 2010 will be frozen at 2009 levels (i.e., the employee rate will remain $1.73).

Quebec Budget 2008

Monique Jérome-Forget, Quebec Minister of Finance on March 13, 2008 delivered the 2008/2009 Budget of the Government of Quebec.

Measures concerning individuals

Simplification and improvement of the tax assistance granted for home support for elderly persons

Improvement of the basic parameters of the refundable tax credit for home support for elderly:

Increase from 25% to 30% in the rate of the tax credit.
Increase in the eligible expenses limit: from $15,000 to $15,600 for independent seniors and from $15,000 to $21,600 for dependent seniors.
The tax credit will be reduced by 3% on every dollar of family income that exceeds an annual threshold of $50,000.

As of 2008, individuals who pay rent to live in a residence for elderly persons must determine the amount of their eligible expenses included in the rent using the table for determining expense that is applicable to them. Where seniors pay rent to live in an apartment building, the amount of eligible expenses included in the rent must be determined by applying a rate of 5% to the monthly rent, to a maximum monthly rent of $600.

Improvement of the tax assistance for retirees

On January 1, 2009, the amount with respect to age will be indexed automatically each year.

The individual maximum eligible retirement income used to calculate the tax credit will be raised from $1,500 to $1,750 for the 2009 taxation year, and from $1,750 to $2,000 as of the 2010 taxation year. On January 1, 2011, the amount will be indexed automatically each year.

Introduction of a refundable tax credit for respite expenses of informal caregivers of up to $1,560 a year, as of 2008.

On January 1, 2009, the following measures will be indexed automatically each year:

Deduction for workers;
Amount for emergency services volunteers;
Refundable tax credit for holders of a taxi driver's or owner's permit.

The stock option deduction granted to employees of innovative SMEs will be raised from 25% to 50%. A corporation will be considered a SME carrying out innovative activities if it carries on a business, has an establishment in Quebec, meets certain conditions regarding the amount of its assets as shown in its financial statements and was granted an amount as a refundable R&D tax credit.

After March 13, 2008, the "12-hour rule" will not apply to business meals consumed by commission employees whose office or employment is connected with the selling of property or negotiating of contracts on behalf of their employer.
Contributions to both components of FICA – Social Security and Medicare – will be considered retroactively as of the 2004 taxation year eligible for the foreign tax credit.

The 2008-2009 Budget includes an improvement to the refundable tax credit for child care expenses up to a family income of $100,550. The rate of the tax credit for child care expenses will rise to 60% of those expenses for incomes ranging from $46,755 to $82,100. It will then decline to reach the minimum rate of 26% at $100,550 rather than $85,535. Modifications are also made to the rate table used to determine advance payments.

The rate of the refundable tax credits for the treatment of infertility and for adoption expenses will be raised from 30% to 50% of eligible expenses involved after 2007 and to qualifying certificates remitted or to qualifying judgments rendered after December 31, 2007 (maximum tax credit: $10,000).

Corporate Tax Measures

Capital tax

A manufacturing corporation whose proportion of activities attributable to manufacturing and processing activities, for a given taxation year, is 50% or more may claim a deduction in calculating its paid-up capital, for such taxation year, corresponding to the amount of such paid-up capital. Such corporation will thus completely eliminate the capital tax regarding such taxation year.

Moreover, where such proportion, for a given taxation year, is between 50% and 20%, the deduction a manufacturing corporation may claim in calculating its paid-up capital, regarding such taxation year, is reduced linearly.

Development of e-business

A corporation carrying on a business whose activities are part of the information technology sector may claim the refundable tax credit for the development of e business equal to 30% of the eligible salaries it incurs after March 13, 2008 and before January 1, 2016. However, the maximum amount of that credit will be limited to $20,000 per employee calculated on an annual basis.
Introduction of an investment tax credit (ITC) for manufacturing and processing equipment

An eligible corporation that acquires assets that qualify as manufacturing and processing equipment between March 14, 2008 and December 31, 2016, may claim the ITC at a rate ranging from 5% to 40% of the amount of the eligible investment. The rate of the ITC will depend on where the eligible investment is made and on the corporation's paid-up capital, calculated on a consolidated basis. The refund rate of the ITC will also depend on the corporation's paid-up capital. The non-refundable portion of the ITC will be carried back (3 preceding years or 20 following years).

The period of eligibility for the refundable tax credit for processing activities in the resource regions is extended to December 31, 2010, without possibility to cumulate with the ITC. This period is extended to December 31, 2015 for the tax credit for the Vallée de l'aluminium, the Gaspésie, certain maritime regions of Quebec (reduction of the rate) with possibility to cumulate with the ITC under specific conditions.

Tax credit for on-the-job training periods

A trainee, otherwise eligible for the tax credit under the existing rules, who is a handicapped person or an immigrant at any time during an eligible training period, may give rise to the improved tax credit: rising from 30% to 40% if the eligible employer is a corporation and from 15% to 20% in other cases. Moreover, the weekly cap on the eligible expenditure, currently set at $600, will be raised to $750.

Other measures

To encourage the francization of immigrants whose knowledge of French is insufficient to communicate in everyday life or at work, while reducing the burden such expenditure represents for employers, a 30% refundable tax credit will be introduced that any eligible employer operating in Quebec may claim regarding training expenditures relating to francization of its employees. The tax credit will apply regarding an eligible training expenditure incurred after March 13, 2008 and before January 1, 2012.
In the context where the making of a separate Quebec election for the purpose of formulating schemes designed to avoid a provincial tax is contrary to the fiscal policy stated on December 20, 2006, the tax legislation will be amended to provide that the fiscal period-end date of a corporation must be synchronized with the one chosen for Federal purposes.

Research and development ("R&D")

The spending limit that applies to the increased rate of refundable tax credit for R&D salary will be raised from $2 million to $3 million. The increased rate of 37.5%, applicable to Canadian-controlled corporations, declines linearly where the assets of the corporation (on an associated basis) vary between $50 million and $75 million. Where the assets exceed $75 million, the rate is 17.5%.
Technical adjustments to various refundable tax credits for R&D expenses are announced, including:

the refundable tax credit for private partnership pre-competitive research;
the refundable tax credit for university R&D;
the refundable tax credit for pre-competitive R&D.

Measures concerning culture

Changes will be made to the refundable tax credit for the production of shows:

Circus shows, aquatic shows and ice shows may henceforth give rise to the tax credit for the production of shows.
Clarification regarding the rule limiting to 50% the deductibility of entertainment expenses.

Measures relating to the February 26, 2008 Federal Budget

Quebec's tax legislation and regulations will be amended to incorporate the following measures announced in the February, 26, 2008 Federal budget:

Implementation of tax-free savings accounts (TFSA) respecting the rules of federal legislation (TFSA for provincial legislation means a TFSA approved for federal legislation).

Adjustments to the gross-up rates applicable to eligible dividends (45% for 2009, 44% for 2010, 41% for 2011 and 38% following 2011). The rate of the tax credit will continue to be 11.9%.

Amendments pertaining to capital cost allowance applicable to certain types of assets.

Measures regarding the disposition of taxable Canadian property (measures relating to withholding and production of tax return).

Other measures regarding registered education savings plans, gifts of publicly traded securities to registered charities, non-refundable medical expense tax credit, registered disability savings plan, deduction for inhabitants of northern regions and donation of medicines to developing countries.

Harmonization to December 20, 2007 federal announcement regarding specified investment flow-through trusts.

Quebec Budget 2009

The budget tabled March 19, 2009 today by Quebec Finance Minister Monique Jérôme-Forget pushes Quebec into a budgetary deficit, but it provides a plan to return to a balanced budget by 2013-2014.

Measures concerning individuals

As of the 2009 taxation year, the limit on child care expenses paid for a child under age 7 will be raised from $7,000 to $9,000.

The family income brackets used to determine the refundable tax credit for child care expenses will be modified. As of 2009, the minimum credit rate of 26% will be applicable to family income above $140,450 (previously $102,925).

As of the 2009 taxation year, an individual’s child care expenses will include the expenses incurred for child care services throughout the period during which the individual or the individual’s eligible spouse received benefits under the Quebec Parental Insurance Plan or similar plans.

Measures concerning businesses

A ten-year tax holiday has been introduced for new corporations dedicated to the commercialization of intellectual property developed in Quebec universities and Quebec public research centres. To be eligible, a corporation must be incorporated after March 19, 2009 and before April 1, 2014, and not be the result of a merger of existing companies. All or almost all of its income must be earned from an “eligible commercialization business”.

An “eligible commercialization business” means a business for which the ministère du Développement économique, de l’Innovation et de l’Exportation (MDEIE) issues a certificate stipulating that, in its view, the only purpose of the business is to produce and sell goods with more than 50% of their value stemming from eligible intellectual property, to produce and sell goods of which an essential component is an eligible intellectual property, and to license computer programs that are eligible intellectual properties. Eligible intellectual property will include patents issued under the Patent Act (Canada) and the copyright on a computer program that the MDEIE believes constitutes a significant technological advancement.

The Refundable Tax Credit for manpower training in the manufacturing sector will be expanded to include the forestry and mining sectors, as of March 20, 2009. Activities that will be deemed to relate to the forestry or mining sector are activities identified in the North American Industry Classification System (NAICS) codes applicable to forestry and logging, oil and gas extraction, and mining and quarrying. This credit is equal to 30% of eligible training expenditures incurred by an employer with regard to an eligible employee. Eligible training expenditures will be limited to the cost paid for external training and to the salary paid to eligible employees.

Numerous amendments will apply to various refundable tax credits available in the cultural sector. The more common ones include:

The refundable tax credit for the production of shows and the refundable tax credit for the production of sound recordings will be increased from 29.1667% to 35% and the limit on production costs will increase from 45% to 50%. These changes will be effective for productions that begin after March 19, 2009.

The Societé de développement des enterprises culturelles certification procedure to obtain these refundable tax credits will be eased. Changes will be made to the criteria used to determine whether a corporation is eligible for the refundable tax credit for the development of e-business in information technologies. These changes will be made retroactively to March 13, 2008. The definition of activities for purposes of information technology will be broadened to include other NAICS codes. However, an additional condition must be satisfied: at least 50% of the corporation’s gross income must be earned from activities included under NAICS codes for software publishers – 511210, or computer assisted design and related services - 541510, or a combination of these activities.

The refundable tax credit for design will be modified regarding design work for goods made after March 31, 2009. The definition of eligible design will be changed so that it will no longer refer to the industrial sector or to the fashion sector, but rather to the design of goods made on an industrial basis.

Quebec has historically supported and contributed to the Fondaction by granting a non-refundable tax credit to individuals who acquire its shares. To further promote the capitalization of this labour fund, which the government views as inadequate in light of current economic conditions, the credit rate will be increased from 15% to 25% of the cost of shares issued by the Fondaction after May 31, 2009. This credit will be reduced to 15% in the first fiscal year during which the fund attains capitalization of $1.25 billion. The maximum cost of shares that may be purchased remains at $5,000 and any unclaimed portion of the credit may be carried forward to subsequent years. As well, limits will be imposed on the amount of capital that the fund may raise annually, to $150 million.

Two new funds have been introduced in the budget: the emergency fund for the recovery of businesses (EFRB) and the fund to finance sectoral venture capital funds (FFSVC). These two funds will be investments in which the Fonds de solidarité des travailleurs du Québec (FTQ) may become a stakeholder. The EFRB, with capitalization of $500 million, is intended to provide financing to medium and large private and public companies currently experiencing liquidity problems. The FFSVC is to provide adequate financing to Quebec’s venture capital industry. With initial capitalization of $700 million from the government through its mandatary Investissement Québec, the FTQ and the Caisse de dépột et placement du Québec, this new fund will invest in 15 to 20 venture capital funds.

There will be an improvement to the Renfort program announced on November 4, 2008 to provide businesses with additional financing before the end of 2010. The program consists of a direct loan or a guarantee of a loan contracted with a financial institution. The government is announcing a $200 million increase in available financing, and that forest sector and tourism infrastructure projects will be eligible.

In view of the current economic situation, the Accro PME regime (SME Growth Stock Plan), which was originally due to be terminated on December 31, 2009, will be extended until December 31, 2014. The Accro PME will be renamed the Stock Savings Plan II and will be enhanced in the following manner:

Until January 1, 2011, the tax deduction for investments under the plan will be enhanced by increasing the adjusted cost base of a qualifying investment from 100% to 150% of the cost of such investment.
To encourage more corporations and investors to make use of this plan, the asset limit of qualified issuing corporations will be increased from $100 million to $200 million.
The minimum holding period of qualifying shares and qualifying securities by investors will be shortened from three years to two years.
The procedure relating to the eligibility and the registration of a valid share on the list of the Autorité des marchés financiers will be simplified.

A refundable tax credit will be granted where a new “green vehicle” is purchased or leased by an individual or a corporation between January 1, 2009 and December 31, 2015. The value of this tax credit will depend on the vehicle’s environmental performance and will range from $2,000 to $8,000.

Measures concerning QST

Increase in the rate of the Quebec sales tax as of January 1, 2011.

The government intends to eliminate the budget deficit caused by the current global financial and economic crisis and to restore the structural balance of public finances by fiscal year 2013-2014. Accordingly, the government announced revenue recovery measures including an increase of one percentage point in the rate of the Quebec sales tax (QST). As of January 1, 2011, the rate of the QST will increase from 7.5% to 8.5%.

To reflect the 1% increase of the QST, the 4.7% rate used to calculate the automobile operating benefit will be increased to 5.4% as of taxation year 2011.

The rates of tax applicable on tobacco products will be increased in 2011 as well to reflect the 1% increase in the QST.

Other measures

Harmonization with federal legislation and regulations from the January 27, 2009 federal budget.

Quebec's tax legislation and regulations will be amended to incorporate, with adaptations based on their general principles, the measures relating to:

the deduction for loss in the value of investments in an RRSP or a RRIF following the death of the beneficiary;
the increase in the small business limit, subject to the clarifications below;
the time at which the acquisition of control of a corporation takes place to determine whether it is a small business corporation or a Canadian-controlled private corporation;
the amendments pertaining to capital cost allowance applicable to certain assets;
the repeal of the restrictions applicable to the deductibility of interest paid on debt used to finance foreign affiliates (i.e., double-dip structures).
The increase in the small business limit from $400,000 to $500,000 will apply as of March 20, 2009. However, where the taxation year of a corporation includes March 19, 2009, the increase in the business limit will be prorated to the number of days that follow March 19, 2009. Note that in the federal budget, the increase in the small business limit was effective as of January 1, 2009. While the increase will be the same for Quebec tax purposes, it will not be retroactive to January 1, 2009.

Other measures have not been retained because Quebec’s tax system is viewed as being satisfactory in these areas:

the increase in the basic personal amount, the amount for a spouse or de facto partner and the amount for an eligible dependant;
the increase in the upper limit of the first two personal income tax brackets;
the increase in the age tax credit;
the introduction of the home renovation tax credit.

Announcement at a later date - The Quebec Finance Minister will, in the near future, announce the government’s position regarding mandatory electronic filing of corporate returns and the penalties for not filing a corporate tax return in the correct format, as well as penalties for the late filing of information returns or not filing such returns in the correct format.

Measures relating to the Excise Tax Act - Changes will be made to the Quebec sales tax system to incorporate, with adaptations on the basis of its general principles and subject to the specific Quebec features, the federal measures concerning the simplification of the GST/HST for the direct selling industry.

Quebec’s tax legislation and regulations will be amended to incorporate, with adaptations on the basis of their general principles, the federal rules relating to the conversion of existing specified investment flow-through trusts into taxable Canadian corporations from the federal Notice of Ways and Means Motion of November 28, 2008.

On November 10, 2008, the federal Minister of Finance released legislative proposals to implement changes to the rules concerning the reporting of income in a functional currency. Quebec’s tax legislation and regulations will be amended to incorporate these measures.

UHY Canada U.S. Tax Team available to assist with FBAR Reporting

(July 15, 2009) The Internal Revenue Service has extended the deadline for filing a report on foreign bank accounts to Sept. 23, 2009 from the original June 30, 2009 deadline.

What is FBAR?

The IRS recently issued a revised version of Form TD F 90-22, “Report of Foreign Bank and Financial Accounts,” also known as an FBAR, which requires U.S. taxpayers to disclose their foreign deposits and investments.

UHY Canada US Tax Team (“UHY CUTT”) member Todd Bensley (Detroit) states that “Taxpayers who only recently learned of their FBAR filing obligation should file the FBAR report according to the instructions and attach a statement explaining why the report is filed late. The delinquent FBAR, along with a copy of the individual’s 2008 tax return, is supposed to be submitted to the IRS’s Philadelphia Offshore Identification Unit. by Sept. 23, 2009. In such a situation, the IRS states that it will not impose a penalty for failure to file the FBAR, especially when the taxpayer only recently learned of the need to file an FBAR.”

In addition, in June 2009 the IRS postponed a planned expansion in the definition of “United States person” that would have extended the FBAR reporting requirements to people who are not citizens or residents of the U.S.

FBAR Information

The IRS has recently added 21 questions to the Frequently Asked Questions page about the FBAR, including about “John Doe summonses” which the IRS has been serving on UBS in an effort to learn the identities and holdings of up to 52,000 U.S. taxpayers with accounts at the Swiss bank.

FBAR Voluntary Disclosure Process

The IRS also clarified several other procedures that will help taxpayers through the voluntary disclosure process. Taxpayers who failed to file a required FBAR for previous years but who reported and paid tax on all taxable income in such years may file the delinquent FBAR's with an attachment explaining the failure to timely file and copies of tax returns for the relevant years. The IRS has indicated that it will not impose penalties for late FBAR's that satisfy the requirements of this voluntary compliance program.

UHY CUTT Chairperson Jonathan Levy (Montreal) adds “UHY CUTT members are assisting taxpayers work through issues relating to the FBAR filing requirements. Individuals should contact any of the following members if assistance is required”.

UHY Canada U.S. Tax Team

MONTRÉAL
Jonathan Levy, Chairman
514-282-1836 ext. 275
jlevy@uhyvictor.com

TORONTO
Nathan Choran
905-326-6800
nathan@gspco.com

VANCOUVER
Darren Millard
604-994-0100
dmillard@uhy-can.com

MICHIGAN
Todd Bensley
586-323-8894
tbensley@uhy-us.com

Dennis Petri
586-254-1040
dpetri@uhy-us.com

NEW ENGLAND
Fred Corso
617-742-9666
fcorso@uhy-us.com

UHY 2009 Global Transfer Pricing Guide Released

UHY is pleased to announce the release of its 2009 International Transfer Pricing Guide.

This guide is a concise reference of current transfer pricing rules in countries located around the globe.

This guide can be obtained at no charge from: http://www.uhy.com/media/PDFs/UHY%20Global%20Transfer%20Pricing%20Guide%202009.pdf .

CICA Finalizes Private Enterprises GAAP (Updated January 28, 2010)

The Accounting Standards Board (AcSB) announced that it has approved the Accounting Standards for Private Enterprises.

These standards are designed to provide privately owned Canadian businesses with a streamlined accounting and reporting alternative to the International Financial Reporting Standards (IFRS), which are mandatory for public companies.

Private enterprises must adopt either the International Financial Reporting Standards or the Accounting Standards for Private Enterprises for their fiscal years beginning on or after January 1, 2011, and early adoption will be permitted.

The AcSB issued the standards on December 15, 2009 so that they may be used for 2009 calendar year-end reporting. The CICA emphasizes that these are "a set of "made in Canada" standards that are robust, straightforward to implement, and most importantly, fit the nature of Canada's privately held companies and organizations".

Notable changes include simplification of recognition, measurement and presentation in areas that were identified as being overly complex, particularly accounting for financial instruments. The simplified accounting requires less use of fair values. The new standards also significantly reduce the burden of disclosure requirements.

See http://www.acsbcanada.org/ for more details.

CRA - 2010 Auto Rates

Ottawa, December 31, 2009
2009-125

Alll of the limits and rates in effect in 2009 will continue to apply in 2010. Specifically:

The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes for 2010 will remain at 52 cents per kilometer for the first 5,000 kilometers driven and 46 cents for each additional kilometer. For Yukon, the Northwest Territories and Nunavut, the tax-exempt allowance will remain at 56 cents for the first 5,000 kilometers driven and 50 cents for each additional kilometer.

The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000 (plus applicable federal and provincial sales taxes) for purchases after 2009. This ceiling restricts the cost of a vehicle on which CCA may be claimed for business purposes.

The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300 per month for loans related to vehicles acquired after 2009.

The limit on deductible leasing costs will remain at $800 per month (plus applicable federal and provincial sales taxes) for leases entered into after 2009. This limit is one of two restrictions on the deduction of automobile lease payments. A separate restriction prorates deductible lease costs where the value of the vehicle exceeds the capital cost ceiling.

The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers for 2010 will remain at 24 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate will remain at 21 cents per kilometre. The additional benefit of having an employer-provided vehicle available for personal use (i.e., the automobile standby charge) is calculated separately and is also included in the employee’s income.

New electronic filing requirements for GST/HST registrants

The Minister of National Revenue has announced proposed changes to electronic filing requirements for goods and services tax/harmonized sales tax (GST/HST) registrants beginning July 1, 2010.

Currently, only GST/HST registrants who meet the criteria set by the Minister of National Revenue have the option to use electronic filing. As a result of the proposed changes, restrictions will be removed so that all registrants, including those registrants that file a return with Revenu Québec, will be able to file electronically.

Under the new proposed measures, the following groups will be required to file their GST/HST returns electronically:

• GST/HST registrants with greater than $1.5 million in annual taxable supplies (except for charities); or

• all registrants required to recapture input tax credits for the provincial portion of the HST on certain inputs in Ontario or British Columbia; or

• builders affected by the transitional housing measures announced by Ontario or British Columbia.

Regulations specifying the persons and classes of persons who will be required to file an electronic return will be proposed at the earliest opportunity.

In general, charities and most GST/HST registrants with annual taxable supplies of $1.5 million or less will not be affected by these changes, although the Canada Revenue Agency (CRA) encourages all GST/HST registrants, regardless of their filing frequency and reporting requirements, to use electronic services.

To learn more about electronic filing options currently available to GST/HST registrants, go to www.cra.gc.ca/gsthst-filing.

The CRA will also provide additional information in the coming months that will assist businesses in changing their accounting and reporting systems in order to be ready for the July 1, 2010, implementation date for the HST in Ontario and British Columbia. For more information, go to www.cra.gc.ca/harmonization.

Definition of “Permanent Establishment” changes January 1, 2010

Permanent Establishment - Overview
Effective January 1, 2010 the fifth protocol to the US Canada Tax Treaty introduced a new definition of “Permanent Establishment”. As a result of this change cross border contractors will be deemed to have a permanent establishment in the other country if either:

Permanent Establishment - The Single Individual Test (for Individuals)
Services are performed by an individual who is present in the other Contracting State for more than 183 days in a 12-month period and, during this period, more than 50% of the gross active revenues of the enterprise are generated from these services; or

Permanent Establishment - The Enterprise Test (for Corporations)
Services are provided in the other Contracting State for more than 183 days in a 12-month period with respect to the same or connected project for a customer’s PE in the other Contracting State

All foreign corporations who perform services in Canada must report the Canadian income to the Canadian Revenue Agency, whether or not a permanent establishment in Canada exists.

Contact Jon Levy at jlevy@uhyvictor.com or (514) 282-1836 #275 for more informaton regarding this important change to the US Canada Tax Treaty.

Click here for information regarding withholding taxes for Americans providing services in Canada.

Click here for details about the UHY Canada U.S. Tax Team (CUTT).

UHY International Business #21

Please click here to obtain our latest edition of UHY International Business.

This bi-annual publication features fresh insight, provided by our members, on the most current business challenges and key issues faced by companies and individuals around the world.

U.S. LLC’s may have rights to refunds

For more information contact Jonathan Levy at jlevy@uhyvictor.com .

Many Americans structure their business activities through limited liability corporations (LLC’s), thereby benefiting from an election to flow income directly to the U.S. investors.

In past years, the Canadian Revenue Agency (CRA) did not extend treaty benefits to U.S. LLC’s and, as a result, U.S. LLC’s operating in Canada were obligated to pay branch tax at the rate of 25%. Changes to the U.S. Canada Tax Treaty in 2009 corrected this anomaly and, accordingly, the branch tax rate was reduced to 5%.

However, recently TD Securities (USA) LLC challenged the CRA's 25% withholding rate in tax court, and won [see TD Securities (USA) LLC 2010 TCC 186]. The judgement concluded that a U.S. LLC does indeed have access to treaty benefits, including the preferential 5% branch tax rate.

The Tax Court of Canada judgment states:

‘The decision in this case stands for no more than the proposition that, properly interpreted and applied in context in a manner to achieve its intended object and purpose, the US Treaty’s favourable tax rate reductions apply for years prior to the Fifth Protocol Amendments to the Canadian-sourced income of a US LLC if all of that income is fully and comprehensively taxed by the US to the members of the LLC resident in the US on the same basis as had the income been earned directly by those members.’

Accordingly, on the basis of this case, U.S. LLC’s which previously remitted the branch tax at the rate of 25% can now apply for a refund of 80% of the amounts remitted.

The CRA has indicated that they will process refund requests under very restricted circumstances. However, given the tone of the CRA's initial response, U.S. LLC's applying for refunds may find more success using the tax treaty's remedies by addressing the matter with Competent Authority. Article XXVI of the U.S. Canada Tax Treaty deals with General Procedures and sets the time limit for an application to six-years (currently January 1, 2004).

The implications of this ruling reach further than just branch profits tax. The ruling declares that U.S. LLC’s have access to treaty benefits, and therefore these entities can apply for refunds for excess withholding taxes for:

Interest (10% rather than 25%)
Dividends (5% or 15% rather than 25%)
Royalty payments ( nil or 10% rather than 25%)
Capital gains (possibly no withholdings required)

In order for a U.S. LLC to apply for these refunds, it should submit an application to US Competent Authority with a copy to Canadian Competent Authority (for notification purposes).

Note that this is somewhat uncharted territory, and experience demonstrates that the ultimate outcome of an application is highly dependent on the applicant's particular set of circumstances. Accordingly, applicants should be aware that a completely positive outcome is not guaranteed.

However, given the clarity of the of the judgement, and the context of the subsequent changes to the U.S. Canada Tax Treaty that accorded U.S. LLC’s treaty protection, U.S. LLC’s that remitted 25% withholdings are strongly recommended to apply for refunds. This ruling indicated that the CRA was wrong in its interpretation of the law, and there is no reason why taxpayers should pay excess taxes as a result.

Please contact us if you require assistance with your withholding tax requirements and recovery.

UHY 2011 Capabilities Statement

WORKING TOGETHER INTERNATIONALLY

“2011 UHY CAPABILITY STATEMENT”

Click here for 2011 capability statement.

UHY Victor introduces the latest UHY ‘2011 UHY Capability Statement’. This edition showcases the breadth and depth of services and capabilities of the UHY network through five client case studies, covering a range of international clients across a variety of market sectors such as consumer fashion, food preparation and servicing equipment, IT and consumer electronics, frozen food manufacturing/distribution and medical equipment.

UHY Victor is proud that one of our clients is showcased in this internationally distributed document.

The ‘2011 UHY Capability Statement’ offers an insight into the variety of work undertaken by UHY Victor LLP in conjunction with other UHY member firms.

To learn more about the services and capabilities that UHY Victor LLP can offer, please contact Jonathan Levy at jlevy@uhyvictor.com.

About UHY
Established in 1986, UHY is an international association of independent audit, accounting and consulting firms with offices in over 242 major business centres in 76 countries. UHY ranks among the top 25 international audit, accounting and consultancy networks. Each member of UHY is a legally separate and independent firm. For further information on UHY please visit www.uhy.com

Quebec CSST premiums

For further information contact Ken Shemie at (514) 282-1836 #273 or kshemie@uhyvictor.com.

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(November 30, 2010) Starting January 1, 2011 CSST premiums have to be remitted to Revenue Quebec along with the Quebec payroll deductions (DAS).

As of January 1, 2011, CSST premiums must be calculated on the actual salaries paid during the period covered by the Quebec DAS remittance. The salaries which are subject to CSST consist of all remuneration and taxable benefits included in taxable employment income in Quebec (Box A of the Relevé 1), except for:

Earnings in excess of the maximum CSST insurable earnings. For most employers, CSST contributions are due on an employee’s earnings up to a maximum of $64,000 in 2011. In limited cases (like companies in the construction industry), excess earnings are calculated on a weekly basis – exceeding $1,227.46 per week; and
Salaries paid to directors for services rendered for their director and officer functions (CSST coverage for these individuals is voluntary).

The CSST premium rate applicable for 2011 is based on the company’s classification as determined by CSST. Every October, CSST sends all companies a notification outlining the rate(s) for the following year.

The 2011 Quebec DAS remittance forms will include a separate box for the CSST contribution. The periodic CSST premiums will be payable based on the same frequency as the Quebec DAS remittances and late CSST payments will be subject to similar penalties – 7% if the payment is up to 7 days late, 11% for 8 to 14 days and 15% for over 14 days.

QST Rate Increase - Jan. 1, 2011

December 5, 2010

Effective January 1, 2011 the current Quebec Sales Tax (“QST”) rate of 7.5% will increase by 1% to 8.5%.

The QST is computed on top of the Goods and Services Tax (“GST”) amount thereby resulting in an increase in the effective rate from 7.88% to 8.93%. This means that the combined GST/QST rate as of January 1, 2011 will be 13.925%.

Changes to information and accounting systems must be implemented to ensure compliance with the QST rate change.

See: http://www.revenu.gouv.qc.ca/en/ministere/centre_information/nf/2009/hausse_taux_taxe.aspx for more information.

Quebec Pay Equity - new annual filing requirement

For further information or a free copy of our Pay Equity Guide contact Christine Woo at (514) 282-1836 #268 or cwoo@uhyvictor.com.

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The Pay Equity Act became law in Quebec in 1996. This law applies to Quebec based employers in the private, public and parapublic sectors. The purpose of this legislation is to eliminate differences in compensation due to the systemic gender discrimination against employees who occupy positions in predominantly female job classes. The Pay Equity Act also applies to enterprises employing only one gender.

All employers with more than 10 salaried employees must comply with the legislation by December 31, 2010. Employers who fail to comply will be subject to fines. Starting in 2011, all employers are obligated to complete an annual Pay Equity government declaration.

A Pay Equity analysis entails an evaluation of an employer`s various work positions in predominantly female job classes, including classifying them based on a point system. The work positions have to be assigned points based on certain criteria, such as their importance to the success of the enterprise, difficulty of performance and level of expertise required.

The Commission de l’équitié salariale provides a detailed guide for the implementation and maintenance of Pay Equity at www.ces.gouv.qc.ca/documents/publications/guidedetaille.pdf. The Commission also offers a software called "Progiciel" to help enterprises with 10 to 49 employees to perform the pay equity analysis. This software is available in French, and can be downloaded at http://www.ces.gouv.qc.ca/realiserequite/progiciel/log_tel.asp.

The Pay Equity Act requires employers to complete a report annually relating to pay equity. As of March 1, 2011, this report became mandatory under the Regulation respecting the report on pay equity. This regulation requires all employers with six or more employees to complete a report on the form prescribed by the Minister of Labour, in the six months following the end of their enterprise's fiscal year. Employers who fail to submit their report may be subject to fines. Click here for further details.

Click here for general information regarding Pay Equity.

Contact us if you require assistance with your mandatory Pay Equity analysis.

Press Releases: Corporate taxes vary widely between countries, UHY study finds

Huge disparities now exist between countries on the amount of tax they take from businesses, according to UHY, the international accounting and consultancy network.

The tax burden on business profits can be more than three times greater in the highest versus the lowest taxed major countries - highlighting just how wide the tax gap is between 'low tax' emerging economies and the majority of 'high tax' developed nations.

For example, analysing highly profitable businesses (defined as making a pre-tax statutory profit of US$100 million per annum) the difference in the amount of tax collected between the highest taxing country surveyed (Japan) and the lowest taxing (Ireland) is US$29.5 million, which means that the same business in Japan would pay over three times more tax than the equivalent business in Ireland.

According to UHY tax professionals, many countries have been reducing their corporate tax rates in a bid to become more competitive and attract highly mobile multinational businesses. The research highlights the need for some countries to work harder to become more attractive to businesses, which are increasingly mobile and are less constrained by geography than at any time in history.

There are also a number of increasingly important economies, such as Dubai (UAE), that do not charge any corporate tax.

UHY tax professionals studied tax data in 21 countries across its international network, including all members of the G8, as well as key emerging economies. Tax professionals based in each country calculated post-tax profits for businesses making annual statutory pre-tax profits of US$100,000, US$1 million and US$100 million.

To read more of the article click here.

Press Releases: UHY strenghthens presence in Eurasia

Global accountancy network UHY extends its coverage within Asia by appointing AZAUDIT LLC.

ZAUDIT LLC was established in 2003. With a team of 11 staff, the firm is based in Baku, the capital and largest port of Azerbaijan and the Caucasus region. The firm provides the full range of audit, tax advisory and corporate finance services covering the region's key sectors such as manufacturing, oil and construction.

Managing partner, Afig Israfilov, says: "We joined the UHY network for a number of reasons. UHY is a rapidly growing and well organised network. As a local firm, we embrace the international reach by joining UHY to support the development of our local projects, to exchange skills and strengthen our overall technical knowledge. Representing UHY in our country and our region will open up new opportunities and support existing ones. We also hope to bring local expertise in support of international projects - collaboration with mutual benefits."

John Wolfgang, chairman of UHY commented: "We are delighted AZAUDIT LLC have joined the UHY network extending our coverage and capabilities in Eurasia, especially with Azerbaijan being a growing economy and a member of the Commonwealth of Independent States (CIS). The firm's admittance to the UHY network will add a great deal of regional market and sector expertise. We strongly believe the firm is a very good fit for our network."

To read the full article click here.

Press Releases: UHY strengthens presence in Asia

Global accountancy network UHY extends its coverage within Asia by appointing Shanghai ZhongHua Certified Public Accountants (CPAs).

Shanghai ZhongHua CPAs was established in 1985 and is today one of the largest accounting firms in Shanghai and China. With 22 partners and a team of 300 staff, the firm is based in Shanghai providing the full range of audit, tax, management consultancy and corporate finance services focussing on the business needs of privately-held, management-controlled, listed and foreign investment organisations. Shanghai ZhongHua CPAs serves over 1,000 clients, representing quite a substantial market share in China covering a variety of sectors such as banking, non-banking financial institutions, real estate development, shipping, trading, hotel, high-tech industry and manufacturing.

Managing partner, Sun Yong, says: "We joined the UHY network for a number of reasons. Training plays an important role in the continuous professional development of our partners and staff, but technical excellence is not enough today. The quality of our services depends on the caliber of the partner and team assigned to each of our clients, so we select people who are not only professionally knowledgeable but also committed, with proven business abilities, whom can analyse, interpret and advise on international concerns."

The full-service firm, registered with the Public Accounting Oversight Board (PCAOB), has extensive experience in Initial Public Offering (IPO) services: it has acted as reporting accountants to more than 60 companies undertaking IPO – involving companies in textiles, software, pharmaceuticals, agriculture, real estate, design, chemicals, media and manufacturing. In addition to audit and tax services, Shanghai ZhongHua CPAs' services also include expert witness, forensic accounting and IT.

John Wolfgang, chairman of UHY commented: "We are delighted Shanghai ZhongHua CPAs have joined the UHY network extending our coverage and capabilities in Asia. The firm's admittance to the UHY network will add a great deal of regional market and sector expertise. We strongly believe the firm is a very good fit for our network but more importantly especially for clients that are opening operations in China, Shanghai ZhongHua CPAs have not only worked internationally but are used to dealing with inbound and outbound requirements."

To read more click here.

Press Releases: 'UHY International Business' Issue 23 - Now Available

Global accountancy network UHY publishes its latest edition of UHY International Business – Issue 23. This bi-annual publication features fresh insight, provided by our members, on the most current business challenges and key issues faced by companies and individuals around the world. Issue 23 covers the following topics:

'Japan set for bounce-back': If anyone needed a reminder that we were living in a global marketplace, the economic shockwaves from Japan’s earthquake and tsunami were quickly evident around the world…
'Next big thing' in emerging markets?': Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. What do they have in common? According to economists, the CIVETS – as this collection of countries are called – are the 'next big thing' for investors in emerging markets. They have been described by the Economic Intelligence Unit as second-tier BRICs – the acronym given to the growth economies of Brazil, Russia, India and China. So are CIVETS worthy of investment?...
'How SMEs go international': When one of the biggest operators in the European sea produce market started trading in the early 1960s it was run by one entrepreneur who bought fresh fish on the dockside at Avilés, Spain, and sold it in nearby coastal towns and villages, using a three-wheeler van which he had adapted for the purpose. Here is how it can be done…

The full content of the articles can be viewed by downloading the issue using the link above.

To read more click here.

QST Rate Increase

On January 1, 2012, the rate of the Québec sales tax will rise from 8.5% to 9.5%.

The new rate will apply to taxable supplies for which the QST will be payable as of January 1, 2012.