Entering Corporate Tax Transactions

When working with corporate tax payments, remember that these payments are not expenses.  Instead, they are paying off a balance that already exists.

To make a corporate tax payment, you will set up a withdrawal with a line type of D-.  The payment should be allocated to an account called Corporate Taxes Payable.

If you receive a corporate tax refund, you will set up a deposit with a line type of D+.  The payment received should be allocated to the Corporate Taxes Payable account.

Installments are considered corporate tax payments and should be treated the same way as a year end corporate tax payment, as noted above.

If your payment also includes interest, you will need to set up an expense account called “Non-deductible interest”.  Any interest paid as a result of your corporate tax payments will be posted into this account.

Any interest received as a result of late payment by CRA of your corporate tax refund must be claimed as income and is set up like interest paid.

Last updated on November 4, 2019 by FCC AgExpert