1%20Introduction%20to%20Taxation%20in%20Canada

1%20Introduction%20to%20Taxation%20in%20Canada -...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Introduction to Federal Taxation in Canada
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The Canadian Tax System Tax bases can vary widely, and many different bases are used to determine taxation in Canada: – Property Tax – on ownership of goods – Income Tax – on income of certain entities – Consumption or Sales Tax – on consumption or use of a certain good or service – Value Added Tax – on the increase in value of a good or service during production – Duties – on the import or export of goods – Transfer tax – on the change in ownership of goods – User tax – for using a publically owned asset – Capital tax – on the invested capital of a corporation – Head tax – on the existence of a particular group of individuals
Background image of page 2
Tax Bases The federal government in Canada uses many of these tax bases. Currently, the following taxes are charged by the Canadian Federal Government: – Goods and Services Tax – Income tax on individuals, corporations and trusts – Alcoholic Beverages tax – Special transaction taxes – Gasoline tax The most significant portion of the federal governments revenues is the income tax on individuals, followed by that on corporations and then the Goods and Services Tax. – These taxes are the focus of this course
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Taxable Entities Three types of entities are required to pay Federal income taxes, and must file a tax return annually in order to calculate the tax they owe: – Individuals (human beings) – Corporations – Trusts The income tax act refers to all of these entities as persons. Unincorporated businesses such as partnerships and proprietorships are not taxable entities – The income of unincorporated businesses is included in the income of the individual proprietor, or the partner – Partners can be individuals, corporations or trusts Complete Exercise One-1 on page 3
Background image of page 4
Taxable Entities for GST Purposes • When it comes to GST, there are four types of entities: – Individuals – Corporations – Trusts – Others (Including partnerships, unincorporated businesses and charities) Complete Exercise One-2 on Page 3
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Provincial Taxation • Each province in Canada also imposes taxes on income earned in the province and residents of the province – The provinces levy their own personal and corporate income taxes and sales taxes • This course will focus on taxation at the Federal level, however there will be times that provincial taxes will have to be considered Complete Exercise One-3 on page 4
Background image of page 6
Tax Policy Concepts • Tax legislation is used to do more than just generate revenue for the government. It also: – Allocates resources between different public goods – Influences choices: e.g., taxes on alcohol and cigarettes – Redistributes income and wealth – Stabilizes the economy – Allocates resources between different levels of government (fiscal federalism)
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Taxation and Income Levels Proportional taxes: a constant rate at all levels of income – Theoretically, this is how corporations are taxed Regressive taxes: lower effective rates of tax for higher
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 30

1%20Introduction%20to%20Taxation%20in%20Canada -...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online