Interest, rent, royalty, dividends, management or administration fees, and other specified amounts paid or credited by a Canadian resident to a non-resident person are subject to a 25 per cent non-resident withholding tax. Where the non-resident person receiving the payment is resident in a country with which Canada has a tax treaty, the withholding tax […]
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Canadian tax on capital gains derived from the disposition of taxable Canadian property
Non-residents are liable for Canadian tax on capital gains derived from the disposition of “taxable Canadian property”. “Taxable Canadian property” is defined to include, among other items, real property and resource property in Canada, assets used in carrying on a business in Canada, and shares in the capital stock of certain corporations. Any disposition of […]
Employment Income for non-Canadian residents
non-resident individuals are taxable in Canada if they are employed in Canada and their taxable income is attributable to the duties of the office or employment performed by them in Canada. Whether an individual is deemed employed in Canada depends on the location where employment services are physically performed. If a non-resident renders services to […]
Canadian tax on a non-resident’s business income
The imposition of Canadian tax on a non-resident’s business income is typically dependent on whether the business activity is sufficient to create a taxable presence in Canada. A non-resident’s income from a business will be taxable if the non-resident “carried on a business in Canada”. The question of whether or not a business is being […]
Filing and Reporting Requirements
Canadian residents are required to file an annual Canadian income tax return with the Canada Revenue Agency (CRA) and to report their worldwide income. Canadian residents are also required to file information returns with respect to certain foreign property interests, as well as certain transactions with non-arm’s length non-residents or transactions with foreign trusts. Corporations […]
Canada Income Tax Rates
Federal taxes on personal income are marginal, increasing with the amount of income. The federal marginal tax rates for individuals are: 15 percent on the first C$46,605 of taxable income; 20.5 percent on the next C$46,603 of taxable income; 26 percent on the next C$51,280 of taxable income; 29 percent on the next C$61,352 of […]
Canada Tax Residency for Tax Purposes
Ascertaining an individual’s residency for Canadian income tax purposes generally involves a determination of whether the individual was “ordinarily resident” in Canada or has otherwise established significant residential ties to Canada. The ITA also deems certain persons to be resident in Canada. An individual who is physically present in Canada for a total of 183 […]
Taxation for Canadian Corporations
Canada’s tax laws are based on 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 worldwide income. In contrast, non-residents are taxed on […]
Foreign Companies Establishing a Business in Canada
One of the threshold issues for a foreign entity to consider when seeking to establish a business in Canada is what form the business should take. The form selected should reflect both operational and tax considerations. The foreign entity will need to determine whether that business should be carried on directly, as a branch of […]
Directors’ Residency Requirements for Canadian Corporations
The federal Canada Business Corporations Act (the CBCA) requires that at least one-quarter of the directors of most federal corporations be resident Canadians. For provincial corporations, here is a list of the requirements: Alberta Directors’ residency requirements: YES At least 1/4 of the directors of a corporation must be resident Canadians. British Columbia Directors’ residency requirements: […]