Canada applies taxation at the federal, provincial and local levels. The federal and provincial governments each have relatively independent tax legislative powers, and local tax legislative powers are vested in the province. Due to the implementation of non-centralization system, the provincial tax policy has the flexibility, provincial tax types, collection methods, balanced taxation and so have some autonomy, but the provincial tax legislative power may not run counter to federal tax legislative power. The current main taxes in Canada are personal income tax and surcharges, corporate income tax and surcharges, social security taxes, goods and services tax, consumption tax, customs duties, special dumping duties, resource taxes, land and property taxes, capital taxes and so on. The federal-level tax is based on personal income tax, supplemented by social security taxes and goods and services tax; provincial tax is based on personal income tax and goods and services tax, supplemented by social security tax; local tax is property tax.
Federal Government: Federal Income Tax, Goods and Services Tax (GST), Tariff, Patent Tax on Gasoline and Gas Fuels;
Provinces and Territories Governments: Provincial / Regional Income Tax, Provincial Retail Sales Tax (PST, Alberta, Northwest Territories and Yukon Territory), Mining Tax, Natural Resources Tax, Property Tax (Alberta, Prince Edward Island, Northwest Territories and Yukon Territory);
City Hall: Property Tax, Commercial Tax, Income Tax.
Anyone who has a Canadian affiliation or has lived in Canada for 183 days or more within a year, whether a Canadian citizen or not, is considered a resident of Canada and therefore needs to pay the full annual income. Non-residents pay taxes on their wages earned in Canada or on their industrial and agricultural income. The Canadian Revenue Agency collects federal and provincial tax in all provinces except Quebec. Personal income tax payment in accordance with the progressive tax system. Individual maximum federal tax rates, including the additional tax is 29% (except Quebec), BC highest personal income tax is 14.7%.
- Income Tax: Canada’s income tax is levied by the federal government and by provincial and territorial governments. Canadian residents must pay income tax based on the income they receive in countries around the world. Non-residents of Canada are taxed in Canada as long as they have the following income or gain from Canada. Canada’s personal income tax “taxable income” is divided into four categories: salary income, business income, investment income and capital gains. The federal personal income tax over-progressive tax rate, the higher the taxpayer income, the higher the tax rate. Most passive (investment) income received by non-residents in Canada, including interest, bonuses, rent, royalties, is deducted by 25% of income tax as long as payments made by Canadian residents or advances to non-residents . Non-residents in Canada may reduce or eliminate the income tax payable on the basis of the relevant tax treaties concluded between their country of residence and Canada. Some treaties may reduce the tax rate on income tax payable to 5%, 10% or 15% and limit the income tax levied on the operating profit earned by businesses that establish “permanent institutions” in Canada (eg, branch offices) to a certain extent . Often, non-resident Canadian entities make little difference in income tax payments through their Canadian affiliates doing business with subsidiaries of Canadian resident entities that do business in Canada.
- Consumption Taxes and Other Taxes: The Canadian consumption tax is a generic term for a class of taxes: first and foremost a GST, similar to China’s VAT, divided into federal goods and services tax and provincial goods and services tax. From January 1, 2008 onwards, down to 5%. Each province imposes a commodity and service tax on retail goods and services ranging from 6% to 12%, while BC is 7%. Second is the consumption tax similar to that of China’s consumption tax, which imposes special excise duties on petrol, diesel, cigarettes, alcohol, jewelery, air-conditioners and heavy vehicles. However, consumption tax may be exempted for basic food, medical services, child care education, residential rent, financial services, resale of houses, insurance, prescription drugs and other items. For most people who pay GST for purchasing goods in commercial operations, they can offset the tax expense through the tax rebate mechanism. Certain provinces charge sales tax on the sale of personal tangible assets and the provision of certain services. Calculation of income tax, the provincial sales tax is generally not deductible, there is no tax rebate. GST and provincial sales tax are exempt from the purchase, sale of stocks and other financial securities, and other financial products. There is no stamp duty on stock exchanges in Canada.
- Municipal tax (Local tax): The taxes levied by the municipal government are used for school, police and fire service, road maintenance and other city services. The owners must pay municipal taxes (commonly known as land tax) each year on the basis of their property valuation. Specific tax rates can be obtained by calling the local municipal property tax department (Vancouver residential property tax is currently charged at CAD $ 5,000 per 1,000 Canadian dollars and commercial land tax is approximately US $ 1,000 per Canadian dollar to pay 6 Canadian dollars).
- Income Declared: Citizens, permanent residents or persons working or doing business in Canada are required to file an annual tax return with the Canadian Revenue Agency by April 30 of each year. Individuals and more than a quarter of the income earners from outside the salary group are required to pay quarterly taxes. Canada’s tax system is complex, the company tax and declare income and other matters should consult the tax consultant or accountant. Canadian Revenue Agency website: www.cra.gc.ca.
- Tax declaration procedures: When companies pay income tax, they must fill in the information online, print the duplicate income tax returns (T2 Corporation Income Tax Return), and fill in the table of company information and tax rate calculation form along with the two forms of attachments. Then, And attachments can be mailed to the local tax office.
- Special Issue: Section 116 Certificate applies to a tax filing and tax collection mechanism that non-residents in Canada sell most of their “taxable Canadian assets.” Non-resident resident sellers must notify the Canadian Revenue Agency (CRA) in writing of the assets they sell, and will receive a certificate (commonly known as Section 116 certificate) upon the transaction of the details of the transaction.
- Tax Time: Canadian residents pay an annual filing system. Non-resident companies report directly in any tax year and must file a tax return when doing business in Canada through a partnership. For a business, both a federal company and a provincial company must file a tax return for the company’s fiscal year. The company must determine the fiscal year in its first year of operation, no more than 53 weeks from the date of registration in the first year, and 12 months in the forthcoming fiscal year, and the deadline for the return of the limited company is within 6 months after the end of the fiscal year, However, if the company is going to pay the tax, it must pay it within two months and the privately controlled company controlled by the Canadian shareholder can pay the tax within three months.
- Tax Channel: Filing by the business or through an accounting firm can be. For more tax information, visit the Canadian Revenue Agency website: www.cra-arc.gc.ca.