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Canada

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Tax authorities

Canada Revenue Agency
International Tax Services Office
2204 Walkley Road, Ottawa ON K1A 1A8
Tel: +1 613 940 8495/940 8497
Website: www.cra-arc.gc.ca

Tax rates at a glance

(Current to July 1 2012)

Corporate income tax rate 15% (a)
Capital gains tax rate 7.5% (b)
Branch tax rate 25% (c)
Withholding tax
  Dividends 25% (d)
  Arm’s-length Interest 0% (e)
  Non-arm’s length interest 25% (f)
  Rent, royalty or similar payments 25% (g)
Net operating losses (years)
  Carryback 3
  Carryforward 20
  1. The general federal corporate rate is 15% applicable to income earned by corporations other than Canadian-controlled private corporations. A general corporation typically includes public companies and their subsidiaries that are resident in Canada and Canadian resident private companies that are controlled by non-residents. As a result of provincial tax, the combined federal-provincial general corporate tax rate varies by province or territory, from 25% to 31%.
  2. Only 50% of capital gains are included in income as taxable capital gains and taxed at the general corporate rate.
  3. The branch tax rate applies to taxable income of a non-resident corporation not reinvested in Canada, and may be reduced by virtue of an applicable tax treaty. Where a treaty does not specifically reduce the branch tax rate, but reduces the withholding tax rate on dividends, the branch tax rate generally equals the reduced withholding tax rate on dividends.
  4. Canada's tax treaties generally reduce the rate of withholding tax on dividends to between 5% to 15% depending on the treaty and the status of the beneficial owner of the dividends.
  5. Canada does not impose withholding tax on arm’s-length interest (other than “participating debt interest”) paid to a non-resident in any country .
  6. Withholding tax applies to non-arm’s length interest paid to a non-resident, but Canada’s tax treaties generally reduce the rate of withholding on interest. Under the Canada-US Income Tax Convention, there is generally no withholding tax on interest (other than participating interest) paid to non-arm’s length US residents.
  7. Canada’s tax treaties generally reduce and, in some cases, eliminate withholding tax on certain types of royalty payments.

Source: Professionals from Gowlings-Taxand, the Canadian member of the TAXAND global organisation of leading independent tax firms.

Canada

Michael McLaren, Michael Colborne and Mark Barbour
Thorsteinssons
Toronto

Michael McLaren, Michael Colborne and Mark Barbour of Thorsteinssons discuss Canadian legal developments impacting international investment

[Show full article]

Tax

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Led by Jay Hutchinson, Ernst & Young's tax practice has expanded during the past year to 119 partners. Its allied firm of tax lawyers, Couzin Taylor, has one of the largest tax controversy practices. As of October 2011, it also has Scott Wilkie, who ... [more]

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With a team of 133 partners and 1,300 professionals, Deloitte's tax practice is one of the largest in Canada, covering the full spectrum of practice areas. Over the past year, the firm has handled several interesting and challenging matters, such as ... [more]

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Bennett Jones's tax practice employs 14 partners and 12 fee earners. Darcy Moch leads the corporate tax services group and Thomas Bauer is head of tax litigation and dispute resolution. The firm is particularly active in the energy sector. In February ... [more]

Dentons's tax group offers its national and international clients services in tax planning, transactions, transfer pricing, indirect taxes, and litigation. The tax group comprises 23 partners and 15 fee earners, and has offices in six Canadian cities. ... [more]

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Headed by Michael Friedman, McMillan's tax practice is diverse with national reach, serving companies from the energy, financial services, auto, and mining sectors. Its expertise includes domestic and international tax planning, transfer pricing, structured ... [more]

Torys's tax practice, led by James Welkoff, is particularly strong in M&A and capital markets. Its clients include Thomson Reuters, Scotiabank, TD Bank Group, Toronto Stock Exchange, and Northgate Minerals. The firm is advising Canada's grain handler ... [more]

Baker & McKenzie has been expanding its tax practice, headed by Brian Segal, over the past two years and now employs four partners and five fee earners. It has also hired two new partners: Jacques Bernier in May 2011 and John Owen in January 2012; both ... [more]

See also

Canada
North America

Firm contact details