Citizens make an important query – who are the tax-payers in Canada? The most important determinant of tax liability in Canada is that – are you a resident of Canada? If yes, then there are chances that you are liable for a tax.
A person residing in Canada is liable for worldwide incomes. One cannot escape this. Even a non-resident would be taxed. But they would be taxed on the Canadian source of income only. You could find excellent tax consultants in Toronto in case you land a difficulty!
The structure of taxes in Canada
Scroll down to derive the most important advice on tax-related queries on Canadian income. Incomes would definitely include salaries, director’s fee, wages and most other benefits one receives from employment sources.
But one enjoys taxable benefits as well. Some examples could be lower interest rates, company-owned automobiles, free or subsidized living & stock benefits.
And, there are non-taxable benefits, to say the least. They include retirement saving-schemes that include Canadian pensions and deferred profit-sharing schemes.
In case you land any difficulty understanding the complex process, seek valuable advice from a trusted tax consultation service in Toronto.
How expats would be taxed?
The most pertinent question is – is there a tax treaty or a double taxation system prevalent?
Foreign tax paid is generally considered as a credit. In case an expat receives multi-sourced foreign money, it might be subject to a tax. But, there is a bright side as well. The Canada Revenue Agency takes concrete steps towards the reduction of double taxation. Any foreign credit is calculated on a country basis. The tax is to be paid only on Canadian sources of income. Tax accounting is done on net foreign incomes.
Residency rules on tax liability
The tax status does not follow a well-outlined definition of residency. So, residency is often determined by location parameters like:
Spouse, dwelling places, personal property, dependents, social ties, and economic interests.
Taxes for expats are heavily dependent on the above-mentioned factors. The succession law of Canada does not at all include gift tax or estate taxes. However, one is accountable for a provincial probate fee at varied rates.
To sum it up
We at “The Accounting & Tax” provider audit solutions, accounting solutions, and personal tax advice for expats. We help expats with bookkeeping, payroll, and financial statements. Feel free to contact us in case you land serious troubles regarding such issues.
Also, an expat has access to social security benefits. It confers on them family allowances, old-age pensions, medical care, unemployment, and sickness. This relief is always granted.