dave@lsuc.UUCP (05/11/87)
A brief word on who pays tax in Canada:
Canadian residents pay tax on all of their income, from any
source (whether inside or outside Canada). A Canadian resident
who has a bank account in the Bahamas that pays interest must
therefore declare this interest for Canadian tax purposes.
Non-residents pay income on only their "Canadian-source" income:
things like employment in Canada, carrying on business in Canada
and so on.
Basically there are three kinds of taxpayers: individuals, corporations
and trusts.
Individuals are human beings. The vast majority of income tax collected
in Canada is personal income tax. As everyone knows, individuals are taxed
on their income (employment income, business income, interest, dividends,
taxable capital gains, etc.)
Corporations pay income tax on their profit (roughly, income minus
expenses).
Trusts (whether set up by a will or "inter vivos" - among living people)
pay income tax.
Partnerships (e.g., a law firm or C.A. firm) don't pay any tax.
However, they calculate their income, and each partner recognizes
his/her/its share of the income for tax purposes.
David Sherman, Consultant
The Law Society of Upper Canada
Toronto
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