Lecture 1 - RSM324 2011(1)

Lecture 1 - RSM324 2011(1) - RSM 324H1F Canadian Income...

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RSM 324H1F Canadian Income Taxation I Cara Orzech cara.orzech@utoronto.ca Office hours: Wed. 8-9am, WO20 Wed. 1-2pm, WO13
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Today’s Agenda r Introduction r r Introduction to the Income Tax Act hapter 3 r Chapter 3 c Liability for tax c Residency c Determination of income c Administration of the tax system
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Liability for Tax Who is Subject to Tax? r s.2(1): every person resident in Canada at any time in the year r Person = individual, corporation (s.248(1)), trust (s.104(1)) r Other business structures (flow-through entities): c Proprietorships c Partnerships c Joint ventures c Income trusts
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Partnership Liability for Tax Who is Subject to Tax? Corporation
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Residency Who is a Resident of Canada? r Individuals c No specific definition in the ITA (not based on domicile or citizenship) c IT221R3 – “continuing state of relationship” c Question of fact c Can be part-time resident where ties to Canada established or broken in the year c s.250(1): sojourning rule (>182 days in Canada = deemed resident) r Corporations c s.250(4): incorporated in Canada c Foreign corporations with central management and control in Canada = deemed residents
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Residency Who is a Resident of Canada? r Dual residency c Must look to International Tax Treaties r Determine each jurisdiction’s right to tax income r “tie-breaker” rules c Where the same income is taxed in +1 jurisdiction, tax credits for foreign taxes paid eliminate double-taxation
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Residency Taxation of Non-Residents r s.2(3): a non-resident is liable for Canadian tax on taxable income earned in Canada if: c Employed in Canada c Business carried on in Canada through a permanent establishment fixed place of business or contracting agent in r A fixed place of business or contracting agent in Canada c Disposed of taxable Canadian property (s.248) r Payments of Canadian source passive income to non-residents is subject to withholding tax c s.212(1): standard rate of 25%, reduced by tax treaties c s.212(43): interest paid to arm’s length non- residents is not subject to withholding tax
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Determination of Income What is Taxable? r
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This note was uploaded on 10/11/2011 for the course RSM 324 taught by Professor Kitunen during the Spring '08 term at University of Toronto- Toronto.

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Lecture 1 - RSM324 2011(1) - RSM 324H1F Canadian Income...

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