Even if it is tax-exempt, every syndicate of co-owners must submit an income tax return each year, both at the provincial and federal levels. This return must be filed within six months following the end of the fiscal year. A syndicate of co-owners must therefore complete the Non-Profit Organization Information Return using CO-17.SP form (at the provincial level) and the Corporate Income Tax Return using form T2 (at the federal level). It is important to note that failure to submit these returns within the prescribed deadlines can result in penalties.
Digitalization of tax returns
Since January 1, 2024, there are new obligations for syndicates of co-ownership, some of which must file their tax returns electronically.
This modernization of the process offers several significant advantages:
Although this transition may initially pose a challenge for condo managers and directors, the administrative burden is significantly reduced in the long term. This evolution towards the digitalization of tax procedures marks a significant progress in the daily management of co-ownership syndicates.
Impact of the new tax rules
Despite these new rules, the directors of a co-ownership can choose to continue submitting their tax returns on paper. However, external consultants such as managers or accountants, who prepare more than five paid tax returns, are required to submit them electronically. Penalties of $100 can be applied at both the federal and provincial levels in case of non-compliance.
Simplified Procedure
The procedure is simple: the accountant prepares the return and transmits it to the competent authorities. However, to file electronically, directors must obtain a federal business number (BN) and a provincial identification number that differ from the NEQ.
To obtain the BN, a director whose name appears in the Enterprise Registrar must contact the Canada Revenue Agency. To register in real time, simply go to the webpage dedicated to business registration. Registration can also be done by mail, fax, or phone. The BN is a 9-digit number assigned by the CRA.
Personal Information
The hurdle for many directors is having to provide their social insurance number (SIN) during registration. They fear being responsible for the syndicate beyond their mandate, as the agency has their SIN. The Canada Revenue Agency states that the SIN is necessary only for identification. Furthermore, the directors in charge of the syndicate are those that appear at the Enterprise Register. Therefore, if you resign or if your term is over, make sure that the update in the register is carried out.
To submit the provincial return, it is necessary to obtain the identification number in addition to the NEQ obtained from the register. You just need to call Revenu Québec to get this number.
Information slips
If your syndicate of co-ownership employs more than five people, whether employees or paid administrators (e.g., salary or tokens), you are required to submit T4, T4A, and RL-1 slips electronically.
Starting January 1, 2024, non-compliance with this requirement will result in penalties. For consultants producing between 6 and 50 paper returns, the federal penalty will be $125.
It is important to note that, although these documents must be submitted electronically, the RL-1 summary must still be produced in paper format. This document must be produced by February 28 of each year to avoid an additional penalty of $350. Make sure to comply with these new guidelines to avoid these financial sanctions and stay compliant with tax requirements.
Syndicates registered for GST and QST
Is your co-ownership registered for Goods and Services Tax (GST) and the Quebec Sales Tax (QST)? Since January 1, 2024, it is mandatory for the syndicate of co-ownership to submit its tax return electronically. Furthermore, if the amount of taxes to be remitted exceeds $10,000, the payment must also be made online from the Syndicate’s bank account.
Syndicates are at a crossroads. An effort must be made to embrace the digital shift. Once these steps are taken, the future will be more efficient and productive.
Aline Désormeaux, CPA auditrice, CA
Désormeaux Patenaude inc
1312 Sherbrooke est
Montréal, Québec H2L 1M2
Téléphone : 514 522-2232 EXT. 207
[email protected]
www.dpcpa.ca/
Chronic express the personal opinions of the author and in no way engage the responsibility of the site editor, CondoLegal.com Inc. The content and opinions expressed in a column are those of the author.
