Talk:Taxation in Canada

Dividends
Dividends are indeed taxed in Canada, when the receivor is an individual. Inter-corporate dividends on the other hand are not taxed. Loomis51 21:15, 19 December 2005 (UTC)

Corporation Tax
Article says taxes on income and dividends. I know little about Canada but that would be highly unusual (in comparison with UK, SA, USA, French, German, Australian, NZ tax codes). Company/corporation tax is usually on profits. If any tax is paid on dividends it is a withholding tax (i.e. not a tax paid by the company but collected by the company and passed on to the tax man) so that the dividend is paid to shareholders with the personal tax on the dividend already (partly) paid. Paul Beardsell 19:55, 22 May 2004 (UTC)

GST/HST
(Disucssion transferred from User talk:Ground Zero.)

GST/HST are not sales taxes. You will have to change this and please put back my other changes, which have nothing to do with your assertion. May I enquire what education and exprience you have in the Canadian tax industry, if any. Cordially SirIsaacBrock 23:57, 6 February 2006 (UTC)


 * I have worked in the tax industry for many years, although not in the sales tax/GST area. I understand that the GST is commonly called a sales tax, although I will verify that. The section of the article in question covers the GST, the HST and provincial retail sales taxes, so "GST/HST" is not appropriate. As well, acronyms should not generally be used in headings because they are of no use to those who don't already know what the acronym means. If "Sales taxes" is not an appropriate heading, then let's put our heads together and come up with a heading that covers all of the taxes discussed in the section. With regard to your other changes, the further explanation that your provided on HST was a useful addition to the article that I deleted in error. My apologies. I have restored it with some elaboration. I have not restored the links to the years because the Manual of Style discourages links to ncomplete dates, i.e., it is okay to link October 23, 1988, because that allows a user to see the date formatted according to his/her preferences, but not October, or 1988, or October 23. This is not my rule, by the Manual of Style that says this. Ground Zero | t 00:10, 7 February 2006 (UTC)


 * Consumption tax Cordially SirIsaacBrock 01:25, 7 February 2006 (UTC)

"Consumption tax" is a term that people in the tax biz use. I think that "sales tax" is the more common term, and therefore more appropriate for Wikipedia. On what basis do you say that the GST is not a sales tax? I ask you to consider the following points: Regards, Ground Zero | t 23:29, 8 February 2006 (UTC)
 * 1) The HST is called the "Harmonized Sales Tax" in three provinces.
 * 2) Michael Wilson's 1987 White Paper on Tax Reform proposed a value-added tax as one of the options for "multi-stage sales tax".
 * 3) The part of the Department of FInance that deals with the GST is the "Sales Tax Division of the Tax Policy Branch".
 * 4) The Wikipedia article on Consumption tax, which admittedly is not very good, says: "A Consumption tax is a tax on the purchase of a good or service. Usually a consumption tax is no different than a sales tax."
 * 5) The Wikipedia article on Sales taxes in Canada includes a discussion on the GST and the HST.


 * Hello, if your interested in the tax industry and tax laws, please go to school as there is to much to teach here. You can start by doing searches here 1 this is my final word on the matter.  Cordially SirIsaacBrock 11:43, 10 February 2006 (UTC)
 * That's not cordial at all. You seem to be saying that GST is isn't a sales tax because you say it isn't. I have provided good reasons for saying it is, so I will make the change back, and post this conversation on thetalk page so that others can comment if they wish. Ground Zero | t 12:08, 10 February 2006 (UTC)

I would have to agree with Ground Zero on this issue. Although GST/HST falls into the supposed 'definition' of a Consumption Tax, GST/HST IS a Sales Tax due to the fact that it is charged at time of sale, not on a consumer's paycheque, as defined by the article of Consumption Tax (by implying the US Income Tax). As well, GST/HST is NOT a mandatory tax, GST/HST is not charged on all goods, and the retailer/wholesaler does not need charge the consumer if they were to collect GST/HST, or even PST, under a certain amount as defined by CRA. Also, consumers can be exempt from said tax in the fact that said goods would be in turn used for resale later on. All of this is defined via the CRA website, and more than clearly states that GST/HST is a SALES TAX. Income Taxes / Consumption Taxes are mandatory, and although not applicable in all circumstances, are negated through deductions and claims, as where Sales Taxes cannot.

--DaisukeNiwa 05:50, 7 April 2006 (UTC)

Healthcare
Healthcmatter. Cordially SirIsaacBrock 11:43, 10 February 2006 (UTC) That's not cordial at all. You seem to be saying that GST is isn't a sales tax because you say it isn't. I have provided good reasons for saying it is, so I will make the change back, and post this conversation on thetalk page so that others can comment if they wish. Ground Zero | t 12:08, 10 February 2006 (UTC) I would havematter. Cordially SirIsaacBrock 11:43, 10 February 2006 (UTC) That's not cordial at all. You seem to be saying that GST is isn't a sales tax because you say it isn't. I have provided good reasons for saying it is, so I will make the change back, and post this conversation on thetalk page so that others can comment if they wish. Ground Zero | t 12:08, 10 February 2006 (UTC) I would have to agree with Ground Zero on this issue. Although GST/HST falls into the supposed 'definition' of a Consumption Tax, GST/HST IS a Smatter. Cordially SirIsaacBrock 11:43, 10 February 2006 (UTC) That's not cordial at all. You seem to be saying that GST is isn't a sales tax because you say it isn't. I have provided good reasons for saying it is, so I will make the change back, and post this conversation on thetalk page so that others can comment if they wish. Ground Zero | t 12:08, 10 February 2006 (UTC) I would have to agree with Ground Zero on this issue. Although GST/HST falls into the supposed 'definition' of a Consumption Tax, GST/HST IS a Sales Tax due to the fact that it is charged at time of sale, not on a consumer's paycheque, as defined by the article of Consumption Tax (by implying the US Income Tax). As well, GST/HST is NOT a mandatory tax, GST/HST is not charged on all goods, and the retailer/wholesaler does not need charge the consumer if they were to collect GST/HST, or even PST, under a certain amount as defined by CRA. Also, consumers can be exempt from said tax in the fact that said goods would be in turn used for resale later on. All of this is defined via the CRA website, and more than clearly states that GST/HST is a SALES TAX. Income Taxes / Consumption Taxes are mandatory, and although not applicable in all circumstances, are negated through deductions and claims, as where Sales Taxes cannot. --DaisukeNiwa 05:50, 7 April 2006 (UTC)ales Tax due to the fact that it is charged at time of sale, not on a consumer's paycheque, as defined by the article of Consumption Tax (by implying the US Income Tax). As well, GST/HST is NOT a mandatory tax, GST/HST is not charged on all goods, and the retailer/wholesaler does not need charge the consumer if they were to collect GST/HST, or even PST, under a certain amount as defined by CRA. Also, consumers can be exempt from said tax in the fact that said goods would be in turn used for resale later on. All of this is defined via the CRA website, and more than clearly states that GST/HST is a SALES TAX. Income Taxes / Consumption Taxes are mandatory, and although not applicable in all circumstances, are negated through deductions and claims, as where Sales Taxes cannot. --DaisukeNiwa 05:50, 7 April 2006 (UTC) to agree with Ground Zero on this issue. Although GST/HST falls into the supposed 'definition' of a Consumption Tax, GST/HST IS a Sales Tax due to the fact that it is charged at time of sale, not on a consumer's paycheque, as defined by the article of Consumption Tax (by implying the US Income Tax). As well, GST/HST is NOT a mandatory tax, GST/HST is not charged on all goods, and the retailer/wholesaler does not need charge the consumer if they were to collect GST/HST, or even PST, under a certain amount as defined by CRA. Also, consumers can be exempt from said tax in the fact that said goods would be in turn used for resale later on. All of this is defined via the CRA website, and more than clearly states that GST/HST is a SALES TAX. Income Taxes / Consumption Taxes are mandatory, and although not applicable in all circumstances, are negated through deductions and claims, as where Sales Taxes cannot. --DaisukeNiwa 05:50, 7 April 2006 (UTC)are taxation has changed in Ontario. As of 2004, OHIP is now paid by the employee. This should be more clearly defined, as originally, the taxation was paid by the employer, not the employee.

Anyone earning under $20,000 does not have to pay OHIP Premiums, but anyone over this amount does, with the $20k-25k range being $300 a year, and increasing in similar blocks. Costs involved are available on the Provincial Worksheet for the appropriate Province, in this case, Ontario.

Although, most medical expenses not covered by OHIP are marginally tax-deductable depending on their nature. (All information is available via OHIP and CRA websites) --DaisukeNiwa 05:37, 7 April 2006 (UTC)

OHIP premiums that were paid until the 1990s were very different from the Ontario Health Premium, which is actually a tax, not a premium. OHIP premiums were commonly paid by employers according to union contracts or employment agreements, but this was not required. The OHP is a new component of personal income tax introduced in 2004. It is collected through the personal income tax system along with the existing income tax rates and surtaxes. I'll check the article ro make sure that it indicates this. There is no need to refer to OHIP Premiums, however, since they were eliminated during either the Peterson or Rae governments. Ground Zero | t 12:36, 7 April 2006 (UTC)


 * The calculation of the Ontario Health Premium is really odd. Basically it's flat for large stretches of income; most likely you pay one of the following amounts exactly: $0, $300, $450, $600, $750, or $900. Except if your taxable income falls between the upper cutoff for one figure and the lower cutoff for the next higher one; in that case you may be paying a marginal rate as high as 25%. Now that marginal rate is only on a few hundred dollars, so the effect doesn't come out blatantly irrational, but it still strikes me as strange. --Trovatore 16:18, 1 May 2006 (UTC)


 * As of 2004, OHIP is now paid by the employee.
 * Actually this is not correct... the Employer Health Tax still exists... CraigBurley

Part-year residents
IF I've understood correctly (which no one else should rely on!), Section 114 of the Tax Act is supposed to say that if you become a resident of Canada during the year, you're not supposed to be taxed on income earned prior to becoming a resident (and vice-versa if you start out a resident and become a non-resident). However I simply can't find in the forms or instructions where it allows you to make this claim. Do you just silently omit the income earned as a non-resident, or what?

By the way, as I read the material on the foreign tax credit, you *cannot* claim a foreign tax credit for taxes paid on income earned when you were a nonresident (oversimplified but I think that's what it comes down to). It seems to me that wouldn't make any sense if you were taxed in Canada on that income; while it might not result in double taxation strictly speaking (because you might be able to claim a credit against the Canadian taxes in the other country), it would be saying that Canada would have *extra* claim on that income, that it wouldn't have had if you'd been a Canadian resident at the time. That seems to fail the minimum rationality test. --69.158.27.235 16:34, 12 April 2006 (UTC)


 * I found it. See Publication T4055, "Newcomers to Canada", pages 11 and 12, available here --69.158.8.124 19:55, 12 April 2006 (UTC)

Opening Paragraph
The Tax in Canada is listed as 36.8% of the GDP, compared to the 35.7% for the US, but also qualified as "significantly higher". Given Industrialised European nations are around 49%, is this really "significantly higher"? I'm going to put the actual numbers there, which I obtained from the Tax article, and if there's disagreement about that, please tell me off. WilyD 14:14, 23 April 2006 (UTC)

Sales taxes
It is incorrect to say that sales taxes in Prince Edward Island are 10% + 6% = 16%. PST is applied to price + GST, therefore the total tax is 6% + [10% x (1+6%)] = 16.6%.

The same is true for Quebec: PST is applied to price + GST, so the total tax is 6% + [7.5% x (1+6%)] = 13.95%, not 13.5%. Ground Zero | t 23:35, 25 July 2006 (UTC)

I agree with this why is it not corrected in the main wiki page ? The Quebec rate is adjusted but others not. —Preceding unsigned comment added by 80.126.207.78 (talk) 10:39, 31 August 2008 (UTC)

It is incorrect to include Saskatchewan in footnote 5 on the discussion on Sales taxes. The Sales tax in Saskatchewan is calculated based on the pre-tax amount as is the GST. For that reason, the combined GST/PST tax rate in Saskatchewan is 10%. "Vendors who show the GST separately on their receipts or invoices must apply the Provincial Sales Tax on the selling price before calculating the GST." - http://finance.gov.sk.ca/revenue/pst/bulletins/PST-5%20General%20Information.pdf —Preceding unsigned comment added by 64.110.229.176 (talk) 12:21, 3 April 2011 (UTC)

Opening paragraph again
I have removed this mess from the opening paragraph so that we can work on it here and try to turn it into something that look like it belongs in an encyclopedia article:


 * In total in 2006, $532 billion combined federal and provincial taxes / $1,417 B$ GDP (CDN) = 37.6% Canadian GDP goes to government expenditures, which can be compared to: $1,464 billion state and local taxes + $2,567 billion federal expenditures  / $12,907 billion GDP ) = 31.2% of the United States GDP in 2006 going to government expenditures. Individual state and local taxes plus federal taxes range from 27.9% in Alaska to 35.9% in Connecticut.  Canadians get essentially all their medical insurance paid out of their taxes whereas in the U.S. only slightly more than half is paid by taxes. (Approximately 16% of US GDP goes to medical expenses )

To begin with, it looks like expenditures and revenues are confused here. they are not the same thing. Secondly, most of this belongs in a technical footnote, not the first paragrph of the article. Ground Zero | t 21:22, 8 August 2006 (UTC)

Moved to branch article
I moved the section on "income not taxed in Canada" to income taxes in canada because it applied only personal income taxes, and not to taxes generally. Ground Zero | t 21:30, 8 August 2006 (UTC)

Income Trust taxes
The section on income trust doesn't mention that, at the time Flaherty made the 31 Oct tax decision, there was also a lot of concern that the income trust structure discourages investment by large corporations. Flaherty said the purpose of the new taxes was not just to close the revenue hole, but also to discourage large corporations like BCE from turning into trusts (I think some economists said that, as a trust, BCE would invest less in infrastructure, r&d and stuff than if it continued to be a corporation). —The preceding unsigned comment was added by 74.109.30.237 (talk) 19:00, 15 April 2007 (UTC).

We need to work to improve this article
There is no mention of what federal and provincial tax rates are; how they compare internationally; etc. Yet there is room for a big whine about income trust taxation. We need to start at the top; the basics; and prioritize the subjects.Deet 01:45, 4 November 2007 (UTC)
 * I agree on the income trust point, and have removed most of that discussion. I think it was inserted by an aggressive pro-income trust campaigner. Keep in mind that there are main articles on most of the taxes -- those might be the more appropriate places to put in detail like rates. Ground Zero | t 12:05, 4 November 2007 (UTC)

Template
It seems there may be enough Canada articles to consider a taxation template such as UStaxation and UKtaxation. Thoughts... Morphh  (talk) 12:20, 18 January 2008 (UTC)

Lead
The lead states that "Currently, approximately 70% of the Canadian government's income comes from taxation, the rest from tariffs, fees, and investments." I could see how investment is not taxation, but how is a tariff and fees not taxation. The definition of tariff is a tax on goods upon importation. Perhaps this is meant to state taxation on Canadian citizens? The lead should also be expanded to about 2-3 paragraphs that summarize the article (see WP:LEAD). Morphh  (talk) 15:09, 30 March 2008 (UTC)

I believe the statistic comes from this release:. Hopefully you can find what makes up the remaining 30% in the tables somewhere there and clear it up. —Preceding unsigned comment added by 207.245.46.74 (talk) 19:36, 23 January 2009 (UTC)

Opening paragraph
Did the writer of this opening have a high level of insecurity?
 * The level of Taxation in Canada is average among Organisation for Economic Co-operation and Development (OECD) countries.

Why is this a good thing to begin the article with? -- timc  talk   20:44, 18 September 2008 (UTC)

Inheritance Tax
The following is very confusing:


 * estates have been treated as sales upon death, and are subject to the same capital gains taxation as, for example, the sale of nonresidential properties or securities in the final personal income tax return the executor of the estate files on behalf of the deceased.

..and no one else on the web clearly explains this either, everyone is copying and pasting the same half-an-answer-with-confusing-structure, or only answering one fragment of all the possibilities. The above snippet could be saying that only the estate pays taxes, but that it pays only capital gains rates, OR it could be saying that someone that is inheriting money must pay capital gains on the inheritance (or parts of it, who knows) just like the capital gains that the estate pays on some things, but that it's not called an inheritance tax.

Which is it?

Take a look at the following and tell me what I have right and wrong, and then I can clarify (or add another paragraph) the section so that it's clear for the case that I'm interested in as well as a number of others.

An estate has no surviving spouse or dependent children, and it has:


 * 1) GICs and cash
 * 2) a primary residence
 * 3) a non primary residence
 * 4) equity
 * 5) Registered GICs (RRSP and/or RIF)
 * 6) RRSP equity

The executor files a final tax return, and pays the following taxes for the corresponding cases:


 * 1) capital gains rate on all interest not yet taxed in the deceased person's prior tax returns?
 * 2) capital gains rate on the capital gains of the primary residence?
 * 3) capital gains rate on the capital gains of the non-primary residence?
 * 4) capital gains rate on the realized and/or unrealized capital gains on the equity?
 * 5) capital gains rate on the entirety of the registered GICs?
 * 6) capital gains rate on the entirety of the registered equity instruments, whether disposed of or transfered in name

The beneficiaries do not pay any tax, except for interest or increases in value (capital gains) that have accumulated after the date of the final estate tax return?

Correct? What do I have wrong? Thanks. 71.17.193.5 (talk) 06:13, 28 June 2009 (UTC)

It sounds like you should be getting advice from a tax professional, not from the Internet, and definitely not from Wikipedia. See also the CRA website. These are complex issues. I see a couple of mistakes in your notes above, and I point out that I am not an expert in estate taxation:
 * 1. accrued interest and other investment income other than capital gains is taxed at the normal personal income tax rate on the final tax return of the deceased, not at the capital gains rate, and it is not taxed again in the estate's return
 * 5. and 6. the total of withdrawals from an RRSP or RRIF are taxed at the normal tax rate - there is no reduction for capital gains

And it is the estate that pays the tax. The beneficiary pays not tax on amounts or assets transferred from the estate, other than, as you note, interest or capital gains that have accumulated after the date of the final estate tax return. Ground Zero | t 13:55, 28 June 2009 (UTC)

Canadian Centre for Policy Alternatives
There is a line regarding tax rates that says "However, a study conducted by Canadian Centre for Policy Alternatives, and released on November 8, 2007, found that the richest pay the lowest rates of all income groups." I took a skim through the paper and it doesn't seem to say that at all. Can someone elaborate on this claim? LexLata (talk) 17:11, 29 May 2011 (UTC)
 * Indeed. That sentence appears in the section "Personal income taxes", but the cited CCPA paper (for example Figure 5) shows the rich pay a higher rate in that category. See also http://opinion.financialpost.com/2012/01/12/william-watson-lets-hear-it-for-the-1/. The sentence is false. I'm removing it. Peter Gulutzan (talk) 21:34, 12 November 2012 (UTC)

Assessment comment
Substituted at 07:41, 30 April 2016 (UTC)