Canada is a federal state and it is divided into provinces. This is why taxation in Canada implies the collection of the taxes by the Canadian Revenue Agency on behalf of the federal and provincial governments and which then distributes the collected amounts of money to the federal and local authorities.
Below, our company formation specialists in Canada explain how the taxation system is organized. We also offer accounting services and we can help those who want to open companies registered at federal or provincial levels.
The taxation system in Canada is made of direct and indirect taxes. These are:
The distribution of the taxes by the Canadian Revenue Agency is made based on tax collection agreements between the federal government and the provincial ones.
If you are interested in starting a business in Canada and need information on the taxes which need to be paid in a specific province, our company registration advisors can answer your questions.
The Canadian taxation system is represented by the federal income tax primarily which implies the levy of this tax at the following rates:
It must be noted that the amounts of money will be slightly different from year to year, which is why we invite you to ask for specialized accounting services in accordance with your needs.
The federal corporate tax, on the other hand, is levied at a flat rate of 15% on Canadian companies. There is also a 10% tax rate for private companies which qualify to claim the small business deduction.
Our Canadian company formation agents can explain how companies are taxed at a federal level.
Canada is divided into 10 provinces with 3 territories in the north-western part of the country. Each province imposes its own income taxes on the earnings of Canadian citizens and residents and on the profits generated by companies.
The following tax rates apply in the Canadian provinces and territories:
The other tax which needs to be considered when setting up a business in Canada is the value added tax or the goods and services tax (GST) which is levied at 5% at a federal level. At provincial and territorial levels, the rate of the GST or sales tax ranges between 5% and 15%.
For more information on the taxation system in Canada, please contact us. You can rely on us if you need company registration and accounting services in Canada.
We invite you to contact us for in-depth advice on the taxation system applicable here. Taxes vary based on the Canadian province where you want to start a business in Canada.
This is why it is important to receive tax advice and counselling, so that you can better assess the tax benefits your business will have and overall tax charges that you can expect to pay, based on the sector of interest.
You can refer to our CPA in Canada, who is qualified to offer tax assistance for companies.
You can rely on our accountant for maintaining the company’s financial documents, calculating the taxes due by including all the tax deductions the company is entitled to, preparing the salaries of your employees, submitting financial documents with the Canadian institutions, etc.
For other services, such as business immigration, our consultants are ready to provide legal representation.
You can contact us if you need information on the Owner Operator program in Canada, one of the main pathways to relocate here under a permanent residence permit issued on the account of developing business activities as a foreigner. Our team can present the main steps of the program.
We can also advise on the steps one must take for the Intra Company Transfer in Canada, another program designed for immigration, only that in this case, it aims at foreign employees.
Contact us if you want to learn more on the characteristics of the program, as well as on the conditions you must fulfill as an applicant, and the conditions your employer must meet.