The Tax Rate Structure

After arriving at taxable income, a tax rate is applied to determine the preliminary federal taxes payable. The rates differ between corporations and individuals:  Individual rate are progressive; and  Corporations are subject to tax at a flat tax rate depending…

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Unpaid Amounts

For non-arm’s length persons (related persons), where a deductible expense is unpaid at the end of the second taxation year following the year of accrual, the amount must be added back to income at the beginning of the third taxation…

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The Provisions of Section 20

   Act Reference  Deductions Allowed  Related Subsection or Deduction  Paragraph 20(1)(a)  Capital cost allowance  Sections 18(1)(b), 13, Regulations  Paragraph 20(1)(b)  Cumulative eligible capital  Section 14  Paragraph 20(1)(c),(d)  Interest and compound interest  Section 18(1)(t), 18(2), 18(11), 20.1  Paragraphs 20(1)(e), (f), (g)…

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Taxable Value of Benefit

Through the Act, the Department of Finance provides some exceptions to the taxation of fringe benefits. For example, to promote the privatization of health care and retirement pension plans certain benefits may still be enjoyed tax-free. The exceptions are, as…

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Residency and Liability for Tax

 Tax Liability  Individual  Corporation  Resident  Liable for tax on worldwide income  Facts indicate the individual is ties to or connected with Canada.  Facts indicate central management and control is in Canada  Deemed Resident  Liable for tax on worldwide income.  The…

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