- Taxes in Canada!!
If you live in Canada and you work, you must file your income tax returns each year.
The Canadian fiscal year runs from January 1st to December 31st of each year so it follows the calendar year.
The tax return (filed and ready) must be submitted no later than April 30th and taxes here are collected by the Canadian Revenue Agency (CRA).
Canada has a thriving free market economy, with businesses ranging from small, individually owned businesses to large corporation.
The country's economic development has historically been based on the export of basic agricultural products, especially wheat and soy and on the production and export of natural resources, such as minerals, oil and gas.
Over time, the industry has also evolved to the point of making the country one of the main manufacturing producers in the world and the service sector has expanded rapidly as well, benefiting the national economy.
In Canada, residents pay taxes based on three levels of government and institutions: federal, provincial (or territorial), and municipal.
Taxes are paid based on your income but, if you have a fixed salary, taxes are automatically withheld during the year but you still need to file a return.
If you are a freelancer or work for yourself or if you are an employer, you pay separately.
Every year, you submit the income tax return called General Income Tax and Benefit Return, to communicate your income and the resulting taxation to the government.
If the taxes paid are in excess, the excess is refunded, otherwise the amount due is supplemented.
The documents necessary to fill out the form for the payment of taxes are the same throughout Canada, except in Quebec which has a special statute and special regulations.
Taxes are applied on the basis of income, as already mentioned with different percentages, divided into five income categories.
The calculation system for federal rates in Canada is progressive, i.e. the rate is applied by dividing one's income into the various brackets.
The federal tax brackets in effect normally vary progressively between 15% and 33%.
In response to the Covid-19 pandemic, federal, provincial and territorial governments have implemented various measures to mitigate the economic impact of the crisis on Canadian people and businesses. Tax measures for individuals include, among other things, the extension of the deadline for filing the tax return and for the payment of taxes resulting from the tax return.
It must be said that in Canada each province has its own rules for registering a Business too but there is a federal rule that if you do not exceed $30,000 you should not apply for the VAT number.
Anyone who has worked in Canada or resided here at least 183 days is required to complete and submit the tax return.
The CCB, which stands for the Canada Child Benefit, is a monthly financial support that is sent to needy families with the right requirements.
The maximum annual deduction is typically $8,000 per child under the age of seven and $5,000 per child aged 7 to 16 years old.
In addition, benefits for children with disabilities can also be provided and, each year, with the General Income Tax and Benefit Return form, the amount of the benefit is calculated based on income and other standards.
Canada also has a 5% Goods and Services Tax which applies to most sales. Some provinces apply an additional provincial sales tax like the Quebec Sales Tax or use a harmonized sales tax that includes it.