Financial reporting and accounting advisory services
You trust your external auditor to deliver not only a high-quality, independent audit of your financial statements but to provide a range of support, including assessing material risks, evaluating internal controls and raising awareness around new and amended accounting standards.
Accounting Standards for Private Enterprises
Get the clear financial picture you need with the accounting standards team at Grant Thornton LLP. Our experts have extensive experience with private enterprises of all sizes in all industries, an in-depth knowledge of today’s accounting standards, and are directly involved in the standard-setting process.
International Financial Reporting Standards
Whether you are already using IFRS or considering a transition to this global framework, Grant Thornton LLP’s accounting standards team is here to help.
Accounting Standards for Not-for-Profit Organizations
From small, community organizations to large, national charities, you can count on Grant Thornton LLP’s accounting standards team for in-depth knowledge and trusted advice.
Public Sector Accounting Standards
Working for a public-sector organization comes with a unique set of requirements for accounting and financial reporting. Grant Thornton LLP’s accounting standards team has the practical, public-sector experience and in-depth knowledge you need.
Tax planning and compliance
Whether you are a private or public organization, your goal is to manage the critical aspects of tax compliance, and achieve the most effective results. At Grant Thornton, we focus on delivering relevant advice, and providing an integrated planning approach to help you fulfill compliance obligations.
Research & development, government incentives
Are you developing innovative processes or products, undertaking experimentation or solving technological problems? If so, you may qualify to claim SR&ED tax credits. This Canadian federal government initiative is designed to encourage and support innovation in Canada. Our R&D professionals are a highly-trained, diverse team of practitioners that are engineers, scientists and specialized accountants.
Keeping track of changes and developments in GST/HST, Quebec sales tax and other provincial sales taxes across Canada, can be a full-time job. The consequences for failing to adequately manage your organization’s sales tax obligations can be significant - from assessments, to forgone recoveries and cash flow implications, to customer or reputational risk.
Global mobility services
In today’s competitive and global marketplace, your employee mobility strategy is a critical factor for success. International opportunities are key to attracting top talent and instilling a global mindset across your organization. Your people truly are your most valuable asset, and as your expatriate workforce continues to grow, a seamless global mobility program is essential to achieving your overall business goals.
US corporate tax
The United States has a very complex and regulated tax environment, that may undergo significant changes. Cross-border tax issues could become even more challenging for Canadian businesses looking for growth and prosperity in the biggest economy in the world.
US personal tax
Whether your business is only beginning to sell to US customers, or US customers represent the core of your business, anticipating and dealing knowledgeably with the US tax environment is critical to your bottom line. Our full-service US corporate tax group can help in all tax aspects of doing business in the US. Given high US corporate tax rates, don't be surprised by a US tax liability only to find out that there were planning opportunities available to reduce it.
While there is great opportunity for businesses looking to expand globally, organizations are under increasing tax scrutiny. Regardless of your company’s size and level of international involvement—whether you’re working abroad, investing, buying and selling, borrowing or manufacturing—doing business beyond Canada’s borders comes with its fair share of tax risks.
Transfer pricing is a complex area of corporate taxation that is concerned with the intra-group pricing of goods, services, intangibles, and financial instruments. Transfer pricing has become a critical governance issue for companies, tax authorities and policy makers, and represents a principal risk area for multinationals.
Succession & estate planning
Like many private business owners today, you’ve spent your career building and running your business successfully. Now you’re faced with deciding on a successor—a successor who may or may not want your direct involvement and share your vision.
Tax Reporting & Advisory
The financial and tax reporting obligations of public markets and global tax authorities take significant resources and investment to manage. This requires calculating global tax provision estimates under US GAAP, IFRS, and other frameworks, and reconciling this reporting with tax compliance obligations.
Our transactions group takes a client-centric, integrated approach, focused on helping you make and implement the best financial strategies. We offer meaningful, actionable and holistic advice to allow you to create value, manage risks and seize opportunities. It’s what we do best: help great organizations like yours grow and thrive.
We bring a wide range of services to both individuals and businesses – including shareholders, executives, directors, lenders, creditors and other advisors who are dealing with a corporation experiencing financial challenges.
Market-driven expertise in investigation, dispute resolution and digital forensics
Viruses. Phishing. Malware infections. Malpractice by employees. Espionage. Data ransom and theft. Fraud. Cybercrime is now a leading risk to all businesses.
Running a business is challenging and you need advice you can rely on at anytime you need it. Our team dives deep into your issues, looking holistically at your organization to understand your people, processes, and systems needs at the root of your pain points. The intersection of these three things is critical to develop the solutions you need today.
Updates for creditors, limited partners, investors and shareholders.
Builders And Developers
Every real estate project starts with a vision. We help builders and developers solidify that vision, transform it into reality, and create value.
Rental Property Owners And Occupiers
In today’s economic climate, it’s more important than ever to have a strong advisory partner on your side.
Real Estate Service Providers
Your company plays a key role in the success of landlords, investors and owners, but who is doing the same for you?
There’s no business quite like mining. It’s volatile, risky and complex – but the potential pay-off is huge. You’re not afraid of a challenge: the key is finding the right balance between risk and reward. Whether you’re a junior prospector, a senior producer, or somewhere in between, we’ll work with you to explore, discover and extract value at every stage of the mining process.
Oil & gas
The oil and gas industry is facing many complex challenges, beyond the price of oil. These include environmental issues, access to markets, growing competition from alternative energy sources and international markets, and a rapidly changing regulatory landscape, to name but a few.
It is finally happening! The ongoing compliance and recapture restrictions that large business have had to contend with since 2010 in Ontario (and 1997 in Quebec) are finally going away. While the changes are very welcome, ensuring your organization is prepared and correctly accounting for the change is almost as important as the initial reporting was to ensure that your organization is no longer absorbing the tax, or a portion of the tax, as a cost—a concept that effectively is contrary to the basics of a value-added tax regime.
The specific provisions previously applied to large businesses—organizations that exceeded $10 million in taxable and zero-rated revenues during their last fiscal year (including all sales made by associated entities). These organizations were required to recapture a portion of their input tax credits (ITCs) claimed in respect of the provincial part of the HST paid or payable on specified property and services in Ontario and Prince Edward Island.1 Similarly, large businesses in Quebec were subject to restrictions related to input tax refunds (ITRs).
Specified property and services
Generally speaking, the specified property and services to which the recaptured input tax credit (RITC) requirement and the ITR restriction applies include:
- specified road vehicles;
- fuel (other than diesel) for use in specified road vehicles;
- energy (not directly used for manufacturing purposes);
- most telecommunication services; and
- certain meals, beverages and entertainment (generally those subject to the 50 percent income tax limitation).
Failure to recapture ITCs or restrict ITRs at the time and in the manner required can result in the imposition of penalties. Penalties can be assessed for both under- or over-reported RITCs or restricted ITRs.
Rate of ITC recapture and phase-out
RITCs are administered by the federal government on behalf of the governments of Ontario and Prince Edward Island under the terms of their respective HST agreements. In both cases, the agreements provided that the rate of ITC recapture will be 100 percent for the first five years in which the agreement is in place and will then be gradually phased out as the recapture rate is reduced by 25 percent per year. The ITC recapture for Ontario was to be phased out as shown in the following table:
ITC recapture – Ontario
(8%provincial component of HST)
|July 1, 2010 to June 30, 2015||100%|
|July 1, 2015 to June 30, 2016||75%|
|July 1, 2016 to June 30, 2017||50%|
|July 1, 2017 to June 30, 2018||25%|
|On or after July 1, 2018||0%|
Prince Edward Island began its three-year phase-out period of the province’s HST RITC rules on April 1, 2018. The ITC recapture for Prince Edward Island will be phased out as follows:
ITC recapture – Prince Edward Island
(10% provincial component of HST)
|April 1, 2013 to March 31, 2018||100%|
|April 1, 2018 to March 31, 2019||75%|
|April 1, 2019 to March 31, 2020||50%|
|April 1, 2020 to March 31, 2021||25%|
|On a after April 1, 2021||0%|
Rate of phase-out of the ITR restriction
After a very long wait, the QST system is changing to allow large businesses to claim an ITR in respect of property and services that are currently subject to ITR restrictions. As a result, unless the provincial government announces changes to this schedule, QST that becomes payable on or after January 1, 2018, in respect of acquisition of property and services currently subject to the restrictions may be included in calculating an ITR at the rate shown in the following table:
ITC recapture – Quebec
(9.97% of QST)
|January 1, 2018 to December 31, 2018||25%|
|January 1, 2019 to December 31, 2019||50%|
|January 1, 2020 to December 31, 2020||75%|
|On or after January 1, 2021||100%|
How to prepare
With the phase-out of the ITR restrictions in Quebec and the phase-out of recaptured ITCs in Ontario and Prince Edward Island always evolving, large businesses must ensure that their systems are updated to correctly account for the ITR rate and the rate of ITC recapture for specified property and services.
Because large businesses are required to account for RITCs in the GST/HST return for the first period in which the ITC becomes available, the change in rate will have to be reflected in the first return due following the change in the recapture rate.
If the adjustment is not made in the return as required and the ITC continues to be recaptured at a higher rate (instead of the reduced rate), it will not be possible to recover the tax in question by simply adjusting a subsequent return. Instead, the business will be required to write to its assigned CRA tax centre and request that the return for the period in question be amended.
The changes affect not only purchases made directly by the organization but also, to a significant extent, employee reimbursements and allowances which generally have a significant amount of restricted or recaptured expenses included.
Thus, managing the change in recapture and restrictions rates often involves multiple changes within an organization’s accounting system.
Please contact one of our firm’s sales tax specialists if you have any questions about the application of these rules.
1 For these purposes, the threshold amount for large business will include taxable and zero-rated revenues in respect of supplies made in Canada or outside Canada through a permanent establishment in Canada by the organization and its associates. Certain financial institutions also qualify as large businesses for these purposes, regardless of their threshold amount.