This document discusses taxation in Canada. It outlines that Canadian residents are taxed on worldwide income and must file a T1 tax return. Non-residents are taxed only on Canadian-source income. Topics covered include types of income tax collected, deductions, filing deadlines, federal and provincial tax structures, and provincial/territorial tax rates. Both federal and provincial governments collect income tax in Canada through the Canada Revenue Agency, with Quebec being the exception.

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Topics
The Income Tax Act, Part I, states: "An income tax shall be paid, as required by this Act,
on the taxable income for each taxation year of every person resident in Canada at any
time in the year.“
In this Presentation I would like to show details regarding Canada taxation .They include:
 Canadian Taxation
 Tax collection
 Tax Deductions
 Dates for Filing Tax Returns
 The Federal Tax Structure
 Federal and Provincial Income Taxes
 Provincial/Territorial Tax Rates

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Canadian Taxation
 Resident of Canada (stays in Canada for 183 days or more)
 Taxed on worldwide income from all sources
 Entitled to foreign tax credits for non-Canadian source income
 Files a T1 Individual Tax Return
 Non-Resident of Canada (stays in Canada for 183 days or less)
 Taxed on Canadian source income
 The type of tax you pay and the requirement to file an income tax return depend
on the type of income you receive. Canadian income received by a non-resident
is subject to Part XIII tax or Part I tax.
 A non-resident of Canada will file a Canadian return for the year to report only
the business income from Canada.

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From Whom and How is tax Collected
 In Canada, there are many different types of income that the government collects
from Individuals. The most common are:
 Employment Income - Includes remuneration and taxable benefits reported on T-4
 Capital Gains – The sale of property - Includes 50% of capital gains in excess of
capital losses
 Property Income- Includes interest, dividends, royalties and rental income
 Investment Income- Interest income and dividend income are received or accrued
each year.
 Other Sources -Includes items such as pensions, RRSP and alimony
 Personal Tax filing deadline is April 30th, every calendar year.

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Tax Deductions
 Provincial sales tax (PST) is a tax that is collected in most provinces when
something is sold.
 Goods and services tax (GST) is a federal tax collected by the CRA and it is
charged on the sale of most goods and services in Canada at a consistent rate of
5%.
 In some provinces, the GST is combined with the provincial sales tax and the two are
collected together. This is known as Harmonized sales tax (HST).

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Dates for Filing Tax Returns
 Due date for deceased person: If the death occurred between Jan.1st and Oct.31,
the return due date will be April 30. If the death happen between Nov.1 to Dec.31the
due date is extended to six months later after the death.
 Note: If you have a balance on your taxes and don’t file on time,
 You will be charged an automatic 5% late filing penalty based on the amount
owing.
 A further 1% of the unpaid tax will be added for each full month the return is late
to a maximum of 12 months.
 For the second time late within 3 years, the penalty is increased up to 40%.
Type of individual Due Date
Salaried person April 30
Self- employed individuals June 15

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The Federal Tax Structure
Taxable Income Tax Rate
$45,916 or less 15%
$45,916 ≥ $91,831 20.5%
$91,831 ≥ $142,353 26%
$142,353 ≥ $202,800 29%
Greater than $202,800 33%
The Canadian income tax system is progressive

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Federal and Provincial Income Taxes
 Canada’s constitution gives income taxing power to both federal and the
provincial/Territorial governments.
 Individuals need only to deal with one tax collector- The Canada Revenue
Agency(CRA)
 The Canada Revenue Agency(CRA) administers the tax system for the federal
government and all of the rest of Canada except Quebec.
 When you file your tax return, fill out federal tax forms and Provincial / Territorial tax
forms.
 Canadian residents file a T1 Tax and Benefit Return for individuals.
 Individuals who have overpaid taxes or had excess tax deducted at source will
receive a refund from the CRA upon filing their annual tax return.

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Provincial/Territorial Tax
 Calculate and pay - Provincial or Territorial income tax in addition to your federal
income tax. You may also be entitled to provincial or territorial credits in addition to
your federal credits.
 The Canada Revenue Agency collects most individual income taxes in Canada,
except those for residents of Quebec. The CRA also administers various provincial
and territorial programs.
 Your province of residence is determined by where you were living on December 31
of that tax year. Even if you lived in Manitoba until September, when you moved to
Ontario, you will file Ontario income taxes. Provincial/territorial income rates, likewise,
step up in brackets and vary according to the jurisdiction.
 The provincial/territorial tax forms are distributed with the federal tax forms, and the
taxpayer need make only one payment—to CRA—for both types of tax.

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