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Canada - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
There are federal and provincial taxes on corporate income, which are both levied by the Federal Government, except for the provinces of Alberta, Ontario and Quebec which administer their own corporate tax system. Combined federal and provincial corporate tax rates vary depending upon the province within a corporation conducts business and the nature of its operations. Manufacturing companies face tax rates ranging from 25% to 39%. Other companies are subject to rates ranging from 37% to 45%. Canadian controlled private corporations are entitled to lower ta rates ranging from 16% to 20% on the first $200,000 of income and rates ranging from 25% to 41% on income between $200,000 and $300,000.
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Taxe rate on long-term capital gains |
Taxable capital gains are included in taxable income and taxed at normal rates.
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System governing groups of companies and dividends paid by subsidiaries to their parent companies |
Dividends are subjected to a restraint at source at the rate of 15% of their gross amount (5% if the actual beneficiary is a company other than a society, which directly possesses at least 10% of the rights to vote of the company which pays dividends),
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Tax rate on branches |
The rate of branch profits tax is 25% which may be reduced depending on the tax residence of the corporation and the terms of any tax conventions beetween Canada and its country of residence.
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Income tax
Fiscal year |
The fiscal year begins on January 1-st and ends on December 31 of the same year.
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Income tax rate |
The federal tax rate is progressive from 16% to 29% in 2003 and shared out into 4 brackets,
| Lower than 31,677 $ | 16% | | 31,677 $ - 63,354 $ | 22% | | 63,354 $ - 103.000 $ | 26% | | Beyond 103.000 $ | 29% |
The provincial income tax is calculated in percentage of the federal basic tax for all the provinces, except Quebec, Ontario and Alberta which perceive their taxes according to their own rules.
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Tax deductions or
other allowances |
There are several types of reductions or dejections in Canada: removal expenses, living allowances, investments etc,,,,
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VAT rates
Standard rates |
Since January 1-st, 1991, there is a Goods and Services sales tax (GST) which rate is 7%. Exemptions are provided for basic foods, health care and education. All provinces, with the exception of Alberta, perceive a general tax on retail sales and supply of certain particular services, which rate varies from 6% to 10%.
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Reduced rates |
No
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Accounting
Introduction
Accounting rules in Canada aim at communicating financial results to the shareholders.
Indeed, accounting practices can be transmitted to anybody involved in the company. It is a way to identify the activities and the "health" of the company.
General accounting principles
BALANCE SHEET : on December 31 n, to compare with December 31 n-1
1) Assets
- Current assets
- Short-term investments
- Debts
- Stocks Inventories
- Expenses paid
- Deferred income taxes
- Tangible assets
- Deferred costs
- Intangible assets
- Long-term debts
2) Liabilities
- Debts of less than one year
- Supplier accounts
- Income tax
- Long-term debts
- Deferred income tax
- Total passive
3) Shareholders balance sheet
- Ordinary shares
- Retained profits
- Total
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Obligations and publications
Financial accounts in Canada include generally, a balance sheet, a profit and loss account, an account of retained profits and a consolidated account of cash flows.
Certification and auditing
Each year, all financial accounts of companies must be controlled by an auditor. It is an obligation ordered by the CBCA,the "Canada Business Act corporations" of 1987.
Professionals and representative organizations
- The Canadian Council of Financial Analysts.
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Last modified in
January 2003
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