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Taxand Canada provides a practical overview of Canada’s legal landscape to international businesses looking to establish operations in Canada or considering an investment in a Canadian business.
The two important concepts on which Canada’s tax laws are based are residency and source. In Canada, income earned by Canadian residents and income earned by non-residents sourced in Canada are subject to Canadian income tax.
Under Part I of the federal Income Tax Act (ITA), Canadian residents are taxed on their world-wide income, whereas non-residents are taxed on Canadian source income which generally includes income that arises from employment in Canada, a business carried on in Canada, or the disposition of “taxable Canadian property”. Under Part XIII of the ITA, non-residents may also be subject to Canadian withholding tax on certain types of passive income, including interest, dividends, rents, and royalties.
Discover more: Doing business in Canada in 2017
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Companies operating in Canada should familiarise themselves with the tax laws highlighted in this document to ensure they remain both compliant and competitive.