Definitions for letter P (Business)

Participating provinces

Provinces that have harmonized their provincial sales tax with the GST to implement the harmonized sales tax (HST). Participating provinces include New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, but do not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that certain offshore activities are carried on in that area.

Partnership

An association or relationship between two or more individuals, corporations, trusts or partnerships that join together to carry on a trade or business. Each partner contributes money, labour, property, or skills to the partnership. In return, each partner is entitled to a share of the profits or losses in the business. The business profits (or losses) are usually divided among the partners based on the partnership agreement.

Payroll deductions

Income tax deductions, Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions, and Employment Insurance (EI) premiums which are deducted from an employee's wages or salary and sent regularly to us. Employers also make their own contributions to the CPP or QPP, and EI .

Penalties

Amounts taxpayers or registrants must pay if they fail to file returns or remit or pay amounts owing on time, or if they try to evade paying or remitting tax by not filing returns. Penalties must also be paid by people who knowingly, or under circumstances amounting to gross negligence, participate in or make false statements or omissions in their returns, and by those who do not provide the information required on a prescribed form.

Permanent establishment

Permanent establishment of a person generally means:

• the person's fixed place of business through which the person supplies property or services, including a place of management, a branch, an office, a factory, or a workshop; or a mine, an oil or gas well, a quarry, timberland, or any other place where natural resources are extracted; or
• a fixed place of business of someone else (other than a broker or an agent) who is acting in Canada for the person and through whom the person supplies property or services in the ordinary course of business.

Person

Includes an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or any organization such as a society, a union, a club, an association, or a commission.

Personal tax credit return (Form TD1)

The first income tax form a person has to complete when starting a new job. It tells an employer how much income tax to deduct from the employee's pay.

Place of business

Means any premises, facility, or installation used to carry on business, whether or not it is used exclusively for that purpose. Premises, facilities, or installations may be considered to be a place of business whether they are owned or rented, or, in some cases, where they are simply available to the business.

Prepaid expense

An expense you pay for in advance; an expense you incur for goods and services you will receive in a later fiscal period, amounts you pay in interest, income taxes, municipal taxes, rent, dues, or insurance for later fiscal periods. These amounts are included as assets on the balance sheet at the end of a fiscal period.

Proceeds of disposition

This is usually the amount you received or will receive for your property. In most cases, it refers to the sale price of the property. This could also include compensation you received for property that has been destroyed, expropriated, or stolen. It is also the fair market value (FMV) of property when it is transferred to another person, or when there is a change in its use.

For more information about proceeds of disposition, see Interpretation Bulletin IT-220, Capital Cost Allowance - Proceeds of Disposition of Depreciable Property, and its Special Release, and Interpretation Bulletin IT-285, Capital Cost Allowance - General Comments.

Professional corporation

A professional corporation is a corporation that carries on the professional practice of an accountant, dentist, lawyer (including notary in Quebec), medical doctor, veterinarian, or chiropractor.

Professional dues

Membership fees paid to maintain a professional status recognized by law, such as lawyers' annual law society fees.

Profit and loss statement

Same as an income statement.

Property

Any property, whether real or personal, movable or immovable, tangible or intangible, corporeal or incorporeal, and includes a right or interest of any kind, a share, and a chose in action, but does not include money.

Proprietorship

A non-incorporated business entirely owned by one person. Same as a sole proprietorship.

Public institution

A registered charity for income tax purposes that is also a school authority, public college, university, hospital authority, or a local authority determined to be a municipality.

Public service body

A charity, non-profit organization, municipality, school authority, hospital authority, public college, or university.

Date modified:

2016-01-28