Among all the sources that fill the budget of Canada, 80% are tax payments from both residents and non-residents who receive income in this country. By regularly receiving tax payments, the government has been able to offer reliable social protection to all segments of the population.

Who is required to pay taxes?

Starting from 2021, tax obligations are imposed on every Canadian citizen who receives any income on the territory of the state, regardless of the type of their activity. That is why taxes are paid by both legal entities and individuals, as well as entrepreneurs and employees. To report income received and taxes paid, individuals must complete a T1 tax return. For other categories of citizens special forms have been developed, including T2, T3, and so on.

Foreigners in Canada are not required to pay taxes for 183 days. If they stay in the country longer than this period and receive any income in the country, they are also required to pay tax contributions every month.

tax return in Toronto

Classification of tax payments

There are four types of tax payments in Canada: indirect, direct, payments for social protection of the population, and payroll taxes. A significant part of the tax system consists of two types of taxes:

  • consumption tax (indirect);
  • income tax (direct).

Among the payments received by the Canadian budget, in percentage terms, the largest part is income tax (33%). This is followed by non-tax revenues (20%). Income taxes are only 8.5%, while general taxes are 11%. The contributions made to social security account for 6.6%.

Tax Help

Mistakes made when paying taxes can lead to serious consequences. This is why it is important to take your tax returns seriously. To avoid trouble, many residents of Canada use taxation services. Professional accountants and tax lawyers will solve any of your problems, from filing a simple declaration to a VAT refund.

Even if a Canadian company does business in the United States, a US tax accountant in Toronto will take care of everything and help you understand the taxation schemes. It is quite easy to find similar tax companies in Canada, the cost of assistance with filling out a T1 tax return starts from 25 CAD.