Tax on Canadian Source Income

Tax on Canadian Source Income - unless a international tax...

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Tax on Canadian Source Income * The tax on an amount that originates in Canada but is pad directly to a non-resident is referred to as a "withholding tax" because the payer must withhold a portion of the obligated payment and remit it directly to the Canadian tax authorities * Normally, this type of tax is calculated at a Fat rate and is based on the gross amount paid, without consideration of any related expenses that may have been incurred by the recipient * The rate of withholding tax has been set at 25% by the Income Tax Act;
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Unformatted text preview: unless a international tax treaty between Canada and your home country reduces the rate * Major types of payments that may be subject to Canadian withholding tax when paid to non-residents: o interest o dividends o rents o royalties o pension bene±ts o registered retirement savings plan (RRSP) and registered retirement income fund (RRI²) payments o certain management and administration fees * The direct sale of goods and services across international boundaries between independent parties is not subject to withholding tax...
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  • Spring '11
  • A.Vena
  • withholding tax, Taxation in Canada, Income trust, Registered Retirement Income Fund, Canadian withholding tax
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