Revenu Québec and Revenue Canada, these establishments are well known to many individuals and businesses who pay their taxes every year in Quebec. After completing your tax return comes the time to regulate your situation and this takes place in the processing of a notice of assessment.
But what exactly is this tax document? What is its use for your business?
Notice of assessment: definition and use
The approach of Revenu Québec and that of Revenue Canada is, with a few extra details, the same with respect to tax returns. Once the institutions receive them, they send a notice of assessment of their taxes to the persons concerned.
This document consists of several elements of interest to the imposed person:
- Details of their account with Revenu Québec or Revenue Canada,
- The date and amount of his last tax return,
- Details of the statement in question, to be communicated to the institution in case of a problem,
- The message of which the notice is the subject, as well as the action required from the addressee.
The notice of assessment therefore confirms the information produced during the declaration of income previously produced, and aims to communicate to the person concerned what they must do to regularize their situation. In general, this is the amount payable in taxes to be in good standing, or the announcement of a tax refund. This first amount depends on the person's previously stated situation, what he or she has previously paid and what the institution may potentially owe.
By living or having a business in Quebec, you have to pay taxes with Revenu Québec and Revenue Canada, which is why each institution sends a separate notice of assessment, according to their respective tax rate.
I received a notice of assessment: what should I do now?
You will receive a notice of assessment a few days (in the case of an electronic tax return) or weeks (if it has been sent by postal services) after sending your return. This notice is based on the previous document and informs you what is to be paid to the establishment in question in accordance with your income and property, as well as possible penalties or interest if you were late in sending your document.
After receiving the notice of assessment, you are required to pay the amount requested, using a means of payment that can be attached to the document (for example, a return form). You can also make your payment with the amount of a possible tax refund: you will receive one if you paid too much previously, or if you get financial assistance from Revenu Québec or Revenue Canada. You can also use a tax refund to pay a debt contracted with another public institution, such as the Société habitation du Québec and other welfare centers.
Finally, note that the notice of assessment can also be electronic if you request it, in order to get all the information about it online.
What happens if I’m late on my taxes?
Being late on your taxes may require you to pay interest and penalties, which are recorded in the notice of assessment attached to the late return. However, if you are also late in processing your notice of assessment or even several notices, you may be subject to a more serious penalty: receipt of an arbitrary notice of assessment.
This follows the notice of assessment (or several documents) to which you have not replied, giving a summary of the amounts you owe to the tax institution, to which you will have to add heavy interest and penalties. It is better not to ignore this arbitrary opinion, otherwise you could end up in more serious trouble with Revenu Québec or Revenue Canada!
Should we keep these notices of assessment?
Yes, it is very important because the notices of assessment are proof that you have filed your tax returns with the tax authorities concerned. They are therefore documents to be preserved, both on a personal and a corporate level.
You may be asked for a notice of assessment when applying for a credit or mortgage. For the institutions, this is proof of your seriousness and your ability to pay. This is a certificate stating that you have completed your tax returns and a way of checking whether you have tax debts with Revenu Québec or Revenue Canada, which the banks do not appreciate from potential customers.
The notice of assessment is the final step in your annual taxation process, so do not forget to take care of it to avoid penalties and interest as much as possible. If you’re having any trouble, you can always call on qualified accountants to help you!