An inclusive Taxation System prevails in Canada to maintain the public funds concerning health and social services enjoyed by most Canadians. The high-income tax payment by Canadians is something we have all heard about. But interestingly Canada pays lesser than countries such as France, Germany, New Zealand, and the U.K.
Most of the revenue generated by the Federal government comes from the income tax in Canada. 15 percent of the Federal government’s revenue is contributed by the Corporate Tax and Sales Tax.
Income Tax System in Canada
The system of taxation in Canada is governed by income tax and is also progressive which means that you will more tax if you earn more salary. The taxation system in the country is residency based and it is mandatory to file tax returns before 30th April each year. You must incorporate income earned from inside and outside sources. You must file for both provincial and federal taxes under one Tax return if in case you live outside Quebec. Separate provincial and federal taxes need to be filed if you happen to live in Quebec.
The Property Tax System in Canada
Property Taxes are based on the purchase of assets such as ownership of a house making you liable to pay property tax. The property tax operates on a local level and its amount depends on varied locations. This type of tax covers a wide range of services including water supply, collection of garbage, police services, protection from fire, and removal of snow.
The Corporate Tax System in Canada
The Corporate Taxation System operates on the provincial and federal levels with a difference in the tax rates based on the corporation’s size, type, and also the province where it operates. The Corporate Taxation system includes tax payments in terms of profit and capital. The corporations which are non-profiting and inactive are also included in this system.
Sales Tax System prevailing in Canada
The goods and services in Canada are levied with tax payments by Canadian citizens. GST, the goods and services tax by the federal government along with PST, Provincial Sales Tax of the provincial government are applied to almost all the goods and services under consumption in Canada. There also prevails a Harmonized Sales Tax in some provinces in Canada, which is a combination of the GST and PST. However, the rate of taxes on consumer goods and services depends on various provinces.
Also, when one arrives in Canada, it is extremely confusing and surprising to see the price of any purchased good toward the final payment checkout because here the price of purchase goods doesn’t display the sales tax during an advertisement. Individuals often end up paying almost five to fifteen percent more than the actual listed tax price based on the kind of purchase of goods and services and also the province type.
