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Home » Tax in Different Regions » Taxation in Canada
 

Taxation in Canada
Taxation in Canada leads to the seventy percent revenue increase of the government of Canada. Canada Revenue Agency(CRA) collect federal taxes in Canada. CRA follows Tax Collection Agreements in collecting personal income taxes and corporate taxes from all provinces except Quebec, Alberta and Ontario. The tax on income was initiated in Canada during the First World War. Income tax became an important part of the Canadian financial system after the First World War. Learn about taxation in Canada from the pages of taxinfohub.com.

The federal and provincial government impose taxation in Canada. Personal income tax accounts for over 40% of the revenue of the government. The rate of the amount of income taxes vary in high and low income groups. The higher income groups have to pay high rate of tax whereas the low income groups pay comparatively low amount of tax. Half of the profit from the capital gain is acquired from the tax and the other part of gain is exempted from tax. Personal income tax can be deferred in a savings account or mutual fund that is highly beneficial fro saving after retirement.

Corporate tax is an importation tax in taxation in Canada. Organizations require to pay corporate taxes on their profit and on their capital. Tax is paid on the corporate income and then it is allocated to individual shareholders as dividends. Half of the income earned from capital gain, is incorporated in income tax. Corporate bodies deduct the cost of capital while calculating the amount of payment in taxes.

The federal government imposes a multi-level sales tax amounting to 6% on goods and services. This type of tax is know as Goods and Services Tax (GST) and also Harmonized Sales Tax (HST). The provincial sales taxes of New Brunswick, Nova Scotia, Labrador and Newfoundland are incorporated in the goods and services tax.Alberta levies and independent sales taxes which is separate from the goods and services tax.

The municipal government of Canada levies property taxes on industrial, residential, and commercial properties. The property taxes account for ten percent of total taxation in Canada. The federal and provincial governments in Canada levy excise taxes on goods like alcohol,cigarettes, gasoline and vehicle air conditioners. The vehicle air conditioner tax accounts for $100 per air conditioning unit. The province of Ontario levies a payroll tax on employers. The tax is known as "Employer Health Tax”. The tax accounts fro 1.95% of payroll. The tax was introduced when the authority of paying of health insurance premiums by the employers was eliminated in 1989. The tax served as potential medium to replace the loss in the revenue. Another similar tax known as "Health Services Fund" is present in Quebec. The employers pay the taxes for the employees as a part of their payroll. The taxpayer pays the amount for the pensioners and self-employed persons.

The site taxinfohub.com provides comprehensive insight on taxation in Canada