Taxation

Note: amounts in currency of country

a) Canada:  Federal small business rate is currently being applied to taxable income up to C$400,000.  United States:  The manufactruing rate is the effective rate taking into account the 6% deduction allowed for domestic production activities.  The small business rate is the effective federal rate on taxable income of US$355,000 approximating the Canadian federal small business threshold.  Combined effective rate shows the basic federal and a weighted average state corporate marginal income tax rate.

b) This refundable value-added tax has no net cost once input tax credits (refunds) have been claimed.

c) Represents Canada Pension Plan and U.S. Social Security.  In Canada employee and employers contribution ates were 4.95% of the employee pensionable earnings to a maximum contribution to the plan of $2,49.30.  Individuals who earn less than $3,500 annually do not need to contribute to the plan.  The tax exempt amount for US social security is $13,560 per year.

d) Canada:  All rates shown are maximum rates paid by employers at 1.4 times the employee premium and are levied at the federal level only.  United States:  Employers who pay the state unemployment tax receive an offset credit of up to 5.4% regardless of the rate of tax they pay the state.  Therefore, the net FUTA tax rate can be as low as 0.8& for a maximum federal tax of $56,000 per employee, per year.  State law determines the individual state unemployment insurance tax rates.

Rates for Canada and U.S. known as of January 2007.

Source:  Internal Revenue Service; PricewaterhouseCoopers, Tax Facts and Figures 2008; Canada Revenue Agency, Federation of Tax Administrators; U.S. department of Labour; Organizations for Economic Co-operation and Development

Source:  PriceWaterhouseCoopers, Tax Facts and Figures 2008;  Alberta Finance and Enterprise; Revenue Quebec; Nova Scotia Department of Finance; Newfoundland Department of Finance; New Brunswick Department of Finance; British Columbia Small Business and Revenue; Saskatchewan Department of Finance; Manitoba Government Inquiries; Ontario Ministry of Revenue.

1. Prorated as of December 31, 2008
2. A rebate of up to 2.55 of manufacturing profits allocated to Saskatchewan is available, which can reduce the rate to as low as 10%
3. An 11.9% tax rate applies to financial institutions (except insurance companies) and oil refining companies.
4. The Quebec financial institutionss capital taxincludes the base rate of 0.72% and a compsensatory tax of 0.25%
5. Alberta eliminated health care premuims paid by individual on January 1, 2009
6. These provinces apply their retail sales tax on the retail price of the good inclusive of GST.
7. The provinces harmonized their provincial sales tax with the GST, resulting in a 13% Harmonized Sales Tax (HST)
8. Provincial rates in addition to general sales taxes.  Some municipalities may levy additional hotel room taxes.
9. Tourism levy where money is dedicated to tourism marketing and development.
10. Destination marketing fee of up to 3% is charged by some transient accommodation establishments to fund tourim marketing campaigns.Provincial sales tax (RTS) is applied at a rate of 5% to the total value of transient accommodation.
11. The tax varies between 3% and $2.00 per room depending on the region.

Source:  Price WaterhouseCoopers, Tax Faacts and Figures 2008

* In Quebec, the federal component of tax is reduced by the 16.5% abatement of basic federal tax.

** Surtax rates apply to provincial tax above surtax thresholds.  Figure in brackets are the taxable income levels that correspond to the thresholds, assuming only the basic personal credit is claimed.