Consumption Taxes:
- Types of Taxes: Canada has three main types of sales taxes depending on the province: GST (Goods and Services Tax), HST (Harmonized Sales Tax), and PST (Provincial Sales Tax). Some provinces only apply GST.
- Tax Rates:
- GST: 5% across Canada.
- HST: Combines GST with provincial rates, e.g., 13% in Ontario and 15% in several Atlantic provinces.
- PST: Varies, e.g., 7% in British Columbia, 6% in Saskatchewan, and 7% in Manitoba. Alberta and the territories only apply GST.
- Québec Sales Tax (QST): 9.975%, bringing the total tax to 14.975% when combined with GST.
- Zero-rated Items: Certain goods/services like exports, basic groceries, and medical devices are zero-rated.
- Excise Duties & Other Taxes: These include taxes on alcohol, tobacco, fuel, and air traveler security charges.
Corporate Taxes:
- Federal Tax Rate: General rate is 15%, with a reduced rate of 9% for Canadian-controlled private corporations (CCPCs) claiming the small business deduction.
- Provincial Tax Rates: Two-tier system:
- Low Rate: For income qualifying for small business deductions, varying from 0% to 3.2%.
- High Rate: For all other income, varying between 11.5% and 16%.
- Foreign Companies: Taxed on Canada-sourced income, with a 25% branch tax on non-resident profits, reducible under tax treaties.
- Capital Gains: 50% of capital gains are taxable, with provisions for carrying losses backward and forward.
Individual Taxes:
- Federal Tax Rate (2024): Progressive from 15% to 33%.
- 0 to CAD 55,867: 15%
- 55,867 to CAD 111,733: 20.5%
- 111,733 to CAD 173,205: 26%
- 173,205 to CAD 246,752: 29%
- Above CAD 246,752: 33%
- Provincial Tax Rates: Progressive, varying between 4% and 21.8%, depending on the province.
- Allowable Deductions & Credits: Includes contributions to RRSPs, education, dependent care, alimony, and charitable donations. Lifetime Capital Gains Exemption (LCGE) of CAD 1,016,836 is available for qualified small business corporation shares.
Other Notable Taxes:
- Resource Taxes: Levied on natural resources like oil, gas, and minerals.
- Property Taxes: Imposed by municipalities based on real property value.
- Insurance Premium Taxes: Ranging from 2% to 5%, with additional taxes in Quebec and Ontario.
- Carbon Taxes: Implemented in line with the Greenhouse Gas Pollution Pricing Act.
- Land Transfer Taxes: Charged on real property transactions, with varying rates.
This overview provides a general understanding of Canada’s tax landscape. For further details, it’s advisable to consult specific resources such as the Canada Revenue Agency (CRA) and provincial tax authorities.
