Taxes

In its simplest form, a tax is a required payment or fee that the government collects in order to pay for the services it provides.

Income Tax System

- Canadian taxation is based on your residency and runs from January 1st to December 31st.

- If you are residing in Canada you should file a tax return each year by the deadline of April 30th.

- You are required to include income earned both inside and outside of Canada.

- Similar to other countries, income taxes in Canada are progressive. This means that the more you earn, the more taxes you will pay.

Property Tax System

- Property tax is a tax on an asset.

- If you own a home in Canada, you will need to pay property tax.

- Similar to other tax programs in Canada, the amount you pay will vary by location.

- Property tax is collected on a local level.

- Although no one enjoys paying taxes, property taxes cover several services including water, snow removal, garbage collection, policing, and fire protection.

Sales Tax System

- Canadians are also taxed on the consumption of most consumer goods and services.

- The federal government’s Goods and Services Tax (GST) and provincial governments’ Provincial Sales Tax (PST) are both applied to the majority of goods and services consumed in Canada.

- In some provinces, the GST and PST are combined to form a Harmonized Sales Tax (HST).

- In other provinces, there is no PST.

- Because both the federal and provincial governments levy sales taxes, the tax rate on any consumer good or service may vary by province.

- One thing many people find shocking or confusing when they arrive in Canada for the first time is the price of an item at checkout.

- This is because in Canada, unlike many other countries, sales tax is usually not included in the advertised price.

- Depending on the province and type of good or service, consumers can end up paying around five to fifteen percent more than the listed price in taxes.