AAQ - Canadian Business Tax

The following is my latest response to an "Ask a Question":

Hello and thank you for using the “Ask A Question” service.

You are inquiring about the tax rate for Canadian business.

A good source to check is the Canada Revenue Agency (CRA). This government body’s website contains a great deal of information about the application of personal and business taxes. There are a couple of sections that you might wish to refer to:

• FOR TAX RATES: CRA homepage > select: All Rates (link under “Key Information” heading) > select: “Corporation Tax Rates” link > This page will display the tax rates for Canadian corporations and small businesses at the federal and most provincial levels – click here to go directly to the tax rates.


• NOTE: From the CRA homepage, consider reviewing the individual sections on small/medium-sized business, and corporations under the “Business” heading. Each section offers greater detail about each type of business size, and potential tax models.
  

A document titled “The Canadian Tax Advantage” (originally posted in January 2002, and updated on January 25, 2007) outlines current and proposed corporate tax rate comparisons between Canada and United States. The document makes mention of the distinction between large/medium-sized businesses versus small businesses and the rates that each pays. Additionally, a business’s investment in research and development will act as a tax credit – effectively offsetting some of the tax on capital gains. Some of the tax rates in this document might be out of date, since some of the rates were adjusted in April and July of 2007.

Admittedly, we are not experts in the application and interpretation of Canadian taxation rules. If you do not find sufficient data from the CRA website, consider consulting a chartered/professional accountant. There are a great number of nuances to Canadian tax applications/laws that these professionals would be more familiar with.

Thank you again for using the “Ask A Question” service. If you need more help, please use the service again or see the Information Desk in the Medicine Hat College Library (phone #: (403) 529-3867).

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