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Canadian Taxation 1

In: Business and Management

Submitted By chiakitree
Words 4848
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TX1

Basic Concept

Tax policy Branch o the department of finance: responsible for the development and evaluation of federal taxation policies and legislation.

Canada Revenue Agency: actual collection of taxes and interpretation of tax law

Tax payable by persons resident in Canada: An income tax shall be paid … on the taxable income for each taxation year of every person resident in Canada at any time in the year.

Persons: including corporations and anybody representing such persons. (Individuals, corporations, and trusts that represent individuals or corporations.)

Full time resident: are subject to tax on their worldwide income throughout the entire calendar year. All domestic and foreign sources of income, including capital gains, must be included in the computation of net income.

Non-resident person: may be subject to tax only if he was employed in Canada, carried on a business in Canada or disposed of a taxable Canadian property. The tax liability for the non-resident person would be calculated on the income from these items only, not on world income.

Deemed resident:

▪ Sojourning in Canada for 183 days or more in a year

▪ Being a member of Canadian forces

▪ Performing services outside Canada under an international assistance program of the Canadian International Development Agency, if the individual was resident in Canada at any time during the three months prior to the day the services commenced; and

▪ Being an officer or servant of Canada or province if, immediately prior to the appointment, the individual was resident in Canada.

Example, May 1, 2007 (page 48 textbook)

▪ Deemed resident – full year worldwide income should be taxed in CA

▪ Immigrant settled on May 1, 2007 – from May 1, 2007, worldwide income should be taxed in CA

How to become a non-resident: To become a non-resident…...

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