Individuals who are residents of Canada are taxable on their worldwide income. To ensure all Canadian residents correctly report their worldwide income, the tax law requires Canadian residents annually file with the CRA the Form T1135 Foreign Income Verification Statement (commonly referred to as foreign property reporting) if they own, at any time during a year, “specified foreign property” with a total cost of more than $100,000 Canadian dollars. Generally speaking, specified foreign property includes funds or investments situated, deposited or held outside of Canada; debts receivable from or shares of non-resident corporations; real estate property, life insurance policy issued by a foreign issuer and interest in a non-resident trust. Read more →
Do you engage foreign individual or company (collectively referred to as “non-resident person”) as independent contractor to provide services in Canada? Are you the non-resident person providing independent contractor services in Canada? If you answer yes to either question, do you know that payments made in respect of services rendered in Canada by non-residents are subject to Regulation 105 withholding at a rate of 15%? There is an additional 9% withholding if the services are rendered in the province of Quebec by non-residents. These withholding requirements simply act to ensure that non-resident recipients of the service payments pay any Canadian income tax duly owing. Read more →
Canada’s tax system is based on self-assessment. In order for the governments to maintain public confidence in the fairness and integrity of Canada’s tax system, the Canada Revenue Agency (the “CRA“) is empowered to audit taxpayers of their compliance of the Canadian tax laws. If you have received a notification letter from the CRA that you are selected for a tax audit, this article will give you an overview of the audit process, your rights and obligations as a taxpayer under audit and the strategies you can employed to handle the audit process with the objective to achieve the best possible tax outcome for your particular situation.
Canada federal income taxes (both personal and corporate) and indirect taxes (i.e., goods and service tax) are levied under the provisions of the Income Tax Act and the Excise Tax Act. Provincial and territorial income and sales taxes are levied under various provincial statutes. Pursuant to tax collection agreements signed with all provinces and territories, except for Quebec, the federal government also collects the followings provincial income and sales taxes:
- personal income taxes – on behalf of all provinces and territories, except Quebec;
- corporate income taxes – on behalf of all provinces and territories except Alberta and Quebec.; and
- sales taxes – on behalf of five provinces, including New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island