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Presentation of Canada : Taxation

There are three types of sales taxes in Canada, depending on the province: the GST (Federal Goods and Services Tax), the HST (Harmonized Sales Tax) and the PST (Provincial Sales Tax). Some provinces do not levy a PST or levy a single-incidence retail sales and use tax (a type of excise duty).
The federal GST standard rate is 5%. The PST general rates are as follows: BC, 7%; SK, 6%. Some provinces (New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island) have fully harmonised their sales tax systems with the GST and impose a single HST (at 15% - 13% for Ontario). Quebec is not a participating province and levies a separate tax, the QST (Quebec Sales Tax) at a 9.975% rate, bringing the combined effective rate to 14.975% in Quebec. Other non-participating provinces include Manitoba and British Columbia (combined rate of 12%) and Saskatchewan (combined rate of 11%), which levy their own retail sales tax, and Alberta, which does not levy a retail sales tax.
Company Tax :
Corporate Tax Rate: Federal Corporate Tax Rate: 15% after the general tax reduction (9% for Canadian-controlled private corporations claiming the small business deduction).

Provincial Tax Rate: Provinces and territories apply two tax rates - a low rate and a high rate. The low rate applies to business income that qualifies for small business deduction (varying between 0% and 3.2%). The high rate applies to all other income (varying between 11.5% and 16%).

For more information, please visit the Canadian government website.
: For information concerning the tax measures taken in order to address the impact of the COVID-19 crisis, please consult the website of the Canada Revenue Agency.
Withholding Taxes :
Dividends: 0%(resident)/25% (non-resident); Interests: 0%(resident)/25% (non-resident); Royalties: 0%(resident)/25% (non-resident).
Social Security Contributions Paid By Employers :
In 2020, employer contribution to Employment Insurance (EI) is 2.21%, with a maximum contribution of CAD 1,199; Canada Pension Plan (CPP) is 5.25%, with a maximum contribution of CAD 2,898. The maximum employer contributions to the Québec Pension Plan (QPP) for 2020 are CAD 3,146, whereas for the EI the maximum contributions of CAD 911. However, they must also contribute to the Québec Parental Insurance Premium plan.
Other Domestic Resources
Canada Revenue Agency
Consult the Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Canada OECD United States Germany
Number of Payments of Taxes per Year 8.0 10.1 10.6 9.0
Time Taken For Administrative Formalities (Hours) 131.0 163.6 175.0 218.0
Total Share of Taxes (% of Profit) 24.5 41.6 36.6 48.8

Source: Doing Business - Latest available data.

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Latest Update: November 2022