Expatriate tax ebook - Canada

Facts and figures

Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates
Sample income tax calculation

Pre arrival procedures
Not applicable.

Employment visas
Most temporary employment does not require an employment visa.

Tax year
Calendar year.

Tax returns and compliance
There are two filing deadlines;

• April 30 for most individuals, and
• June 15 for individuals and their spouse, where at least one of them earns unincorporated business income.

No extension of time to file allowed and taxes are due, in full, by April 30. Late filing penalties and interests apply and are based only on unpaid taxes.

Income tax rates
There are two levels of taxation: federal and provincial. The rates are graduated based on income and vary depending on which province or territory the individual was resident in on December 31 of a particular year.

For the 2010 tax year, the federal rates are the following:

Federal Rates

The following Table outlines the top 2010 combined tax rates (federal plus provincial) by province for regular income (different rates apply to capital gains and Canadian source dividends).

* Taxpayers need earned income from the prior year to make an RSP contribution – therefore, newcomers to Canada may have to wait one year to accumulate RRSP contribution room.

The following Table outlines the combined federal and provincial tax by province for an individual with $98,000 taxable income (assuming the same fact situation noted above – i.e., married employee, spouse has no income).