It may seem easy to do your own bookkeeping. Yet a lack of knowledge can lead to costly mistakes.

Bookkeeping, a difficult art to master

Bookkeeping can become complex and requires that you master certain subtleties. Omissions or poor bookkeeping could have unfortunate consequences.

It is therefore important to call on an expert for your bookkeeping needs. He will make sure you get all the benefits to which you are entitled while ensuring that you comply with all the tax rules in effect.

Your risk exposure

It is important to meet tax and source deduction filing deadlines. Poor planning could result in penalties, interest payments, or a note in the company’s file. Similarly, accounting for ineligible expenses may also expose you to an audit. Not knowing how or what to answer in the event of an audit could make your situation worse in the eyes of different government levels.

Your benefits

On the other hand, incomplete bookkeeping knowledge could cause you to miss certain credits or deductions to which you are entitled, depending on your activity sector. You could also forget to account for certain expenses to which you are entitled, or account for inputs incorrectly (taxes receivable) and thus declare too much or too little income.

For peace of mind, call on an expert for your bookkeeping.

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When it comes to diversified agri-food activities, it is to the entrepreneur’s benefit to undertake an in-depth tax analysis and optimize the business’s structure.

The agri-food sector is distinctive in that agriculture and food processing activities overlap. This makes the industry interesting, but also adds numerous tax considerations.

Tax credits and benefits

The agricultural sector enjoys enviable advantages from a tax point of view. For example, holding eligible farm property and/or corporate shares that qualify as eligible farm property can result in a $1,000,000 capital gains deduction when the business is sold.

In addition, an exclusive and specific provision for this sector is the possibility of transferring the property to family successors with no tax impact. However, compliance with certain conditions is essential in order to avail oneself of these benefits. It is therefore important not to “contaminate” an agricultural activity with non-agricultural operations if the ultimate objective is to take advantage of these tax incentives.

On the other hand, there are also advantages available for manufacturing and processing activities, or M&P as they are often called, such as certain investment tax credits or favourable capital cost allowance rates.

The importance of an appropriate structure

As a general rule, it can be more complicated to benefit from the tax advantages inherent to both activity sectors (agricultural and non-agricultural) if they are grouped under the same entity, hence the importance of discussing with a tax specialist who will be able to help you plan an appropriate and customized structure for your business and projects.

Here are a few key moments in the life of an agri-food entrepreneur where it is essential to consult the right specialists:

Business start-up

Proper guidance and planning will help you determine the most appropriate structure for your business (sole proprietorship, corporation, partnership, trust).

Activity or product diversification

Experts will be able to accompany you in your plans to diversify your activities or products. For example, you own an orchard and want to start producing cider or, conversely, you produce vodka and want to get into corn production as well.

Integrating the various activities

You can choose vertical integration (from cultivating to processing, marketing, distributing and selling your product) or horizontal integration (through the development of services related to your operation, such as organizing weddings and tourism activities at your vineyard).

Growth by acquisition or partnership

Experts can also assist you acquire a competitor, integrate shareholders, develop partnerships, expand or purchase buildings, land or equipment.

Succession planning

Think about succession planning, a possible divorce or estate planning as well.

It is in your best interest to be well supported through the maze of a sometimes complex tax system. Contact our experts to optimize your business’s situation.

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The Grant Thornton International IFRS team has published the 2020 edition of Navigating the changes to International Financial Reporting Standards: A briefing for Chief Financial Officers.

This publication has been designed to provide chief financial officers high-level awareness of the recent changes that will affect companies’ financial reporting in the future.

This publication covers both new standards and interpretations that have already been issued, and new amendments made to existing ones, giving brief descriptions of each.

Consult the document below.

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New filing requirements for trust will apply for taxation years ending on or after December 31, 2021.

As a result, many trusts that currently do not have to file a Trust Income Tax and Information Return (T3) will be required to file such a return annually. Additionally, extensive information regarding the identity of all trustees, beneficiaries and settlors will therefore have to be disclosed in the T3 return.

These new requirements will increase the administrative burden on trustees, especially for trusts providing for numerous beneficiaries. In order to avoid having to comply with these new requirements, consideration could be given to dissolving certain inactive trusts before December 31, 2020.

The following provides an overview of the new rules to help you prepare.