Home » Tax Guide for Professionals and Consultants by Olivia Pollard
Tax Guide for Professionals and Consultants Olivia Pollard

Tax Guide for Professionals and Consultants

Olivia Pollard

Published April 6th 2014
ISBN : 9781497562639
Paperback
64 pages
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 About the Book 

Canadian tax is based on residency. Residents of Canada are subject to tax on their world wide income. That means that no matter where the income is earned, if you are a resident of Canada, you are required to pay tax to the Canadian government onMoreCanadian tax is based on residency. Residents of Canada are subject to tax on their world wide income. That means that no matter where the income is earned, if you are a resident of Canada, you are required to pay tax to the Canadian government on that income. A person can be a factual resident of Canada or a deemed resident depending on residential ties and treaty tie-breaker rules (more on the treaty later). Non-residents, on the other hand, are subject to tax only on Canadian source income. This will normally fall into two types of tax. The first is a Part XIII withholding tax on passive investments that are sourced to Canada and the second is Part I tax on employment income in Canada, income from carrying on a business in Canada and the sale of taxable Canadian property. Part XIII tax is fairly straight forward. It is simply a withholding of tax on the gross amount paid to the non-resident. Part XIII only applies to passive income. Passive income in Canada is the same as in the US - dividends, rent, royalties, etc. All you need to remember is that if it is passive income you will have withholding at source and no Canadian income tax return to file.