Taxation

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Federal Taxation  
 

Canada
(2008)

United States
(2008)
Corporate Income Tax (%)a    
Top General Statutory Rate 19.5 35.00
Manufacturing Rate 19.5 35.00
Small Business 11 34.00
Combined Effective (Cdn. Federal + AB & US Federal + State Avg.) 29.5 39.25
     
General Sales Tax (%)b 5  ---
     
Social Securityc 4.95% (max. $2,049.3 on max. contributory earnings of $44,900) 6.2% (max. $6,324 on max. contributory earnings of $102,000)
     
Employment Insurance/Unemployment Tax (employer premiums)d 2.42% (max. $995 on max. insurable earnings of $41,000) 6.2% ($434 on taxable wage limit of $7,000)
     
Medicare  --- 1.45%

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

 

Provincial Taxation
    BC AB SK MB ON QC NB NS PE NL
Corporate Income Tax                      
  General Rate (%) 11.5 10.0 12.5 13.5 14.0 11.4 13 16.0 16.0 14.0
  Mfg. & Proc. Rate (%) 11.5 10.0 12.5 13.5 12.0 11.4 13 16.0 16.0 5.0
                       
  Small Business Rate (%) 4 3.0 4.5 2 5.5 8 5 5.0 3.2 5.0
       Threshold ($' 000) 400 430 500 400 500 400 400 400 400 400
                       
Capital Tax                      
  General (max %) --- -- -- 0.4 0.225 0.36 0.1 0.2 --- ---
  Financial Institutions (max %) 2 -- 3.25 3.0 0.675 0.72 3.0 4 5.0 4.0
                       
Health Care Premiums                      
  Individual/Family (max) ($/ month) 54/108 44/88 --- --- 75 --- --- --- --- ---
                       
Employer Payroll Tax max (%) --- -- --- 2.15 1.95 4.26 --- --- --- 2.0
                       
General Sales Tax (%) 7.0 -- 5.0 7.0 8.0 7.5 4 8.0 8.0 10.04 8.0
                       
Fuel Tax                      
 Gasoline (cents/ litre) 14.55 9.0 15.0 11.5 14.7 15.25,6 10.76 15.56 15.8 16.56
                       
Tobacco Tax ($/ctn) 35.8 37.0 35.66 35.06 24.7 20.6 23.56 33.046 34.9 36.06
                       
Hotel Room Tax (%) 8.07 4.08     3 3        
 

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.

 

Municipal Taxation
  Municipal Tax Rate
Mill Rates
  Resid./ Farm Non-Resid. Resid./ Farm Com-ercial/ Indst.
 
Village of Barons (2007 )     21.7 21.7
Blood Tribe -- -- -- --
Town of Cardston (2007) 10.000 12.550 13.599 18.476
Cardston County (2007) 5.700 13.200 9.914 17.202
Village of Carmangay (2008)     19.039 21.576
Town of Claresholm (2007) 7.892 17.227    
Town of Coaldale(2006) 9.919 11.481 14.207 17.947
Town of Coalhurst (2008) 8.207 13.609    
Village of Coutts (2008) 14.871 27.379    
Village of Champion        
County of Lethbridge (2007)     5.696 7.204
City of Lethbridge (2007)     10.698 21.962
Village of Lomond (2008)     16.700 24.942
Town of Magrath  (2008) 8.094 10.125 10.288 14.611
Town of Milk River (2007) 15.281 28.005    
Village of Milo (2008) 14.436 21.538 14.436 21.538
Village of Nobleford (2008) 3.200 3.200    
Town of Picture Butte (2008) 7.546 10.046 10.114 15.431
Town of Raymond (2008) 9.130 13.130    
Village of Stirling (2006) 11.270 11.270 15.773 18.129
MD of Taber (2006)     4.366 6.440
Town of Taber (2008) 6.957 10.994 9.647 15.452
Vulcan County (2007)     9.140 9.140
Town of Vulcan (2008)     13.796 19.966
Town of Vauxhall  (2008) 6.511 14.757 9.107 20.864
Village of Warner (2006) 0.021 0.024 0.028 0.033
County of Warner (2007) 9.618   13.288 14.244
         
Source:  SouthGrow Community Profiles    

 

Personal Taxation - Alberta (2008)      
  Basic Amt Basic Brackets and Rates                  (rates apply starting at the brackets shown) Surtax thresholds and Rates **
Alberta $16,161 $0      10.0%         N/A
British Columbia $9,189 $0      5.24% $35,016 7.98% $70,033 10.5% $80,406 12.29% $97,636 14.70%
Manitoba $8,034 $0      10.9% $30,544 12.75% $66,000 17.40%    
New Bruswick $8,395 $0      10.12% $34,836 15.48% $69,673 16.80% $113,273 17.95%  
Newfoundland and Labrador $7,566 $0      8.2% $32,215 13.30% $60,429 16.0%     $7,102 ($62,469) 4.5%
Nova Scotia $7,731 $0      8.79% $29,590 14.95% $59,180 16.67% $93,000 17.50%   $10,000 ($81,104) 10.00%
Ontario $8,681 $0      6.05% $36,020 9.15% $72,041 11.16%     $4,162 ($63,428), 20%          $5,249 ($74,720), 36%
Prince Edward Island $7,708 $0      9.80% $31,984 13.8% $63,969 16.7%     $12,500 ($98,143) 10.00%
Quebec* $10,215 $0      16.0% $37,500 20.00% $7,500 24.00%     N/A
Saskatchewan $12,945 $0      11.0% $39,135 13.0% $111,814 15.00%    

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.