The Canadian financial constitution is characterized by a strong federalism. The legislative competence of the federal government extends to all areas that are not expressly promised to the provinces. The sovereignty of the income is divided among the local authorities.
Individuals are subject to income tax, which is levied simultaneously by several local authorities in Canada. The tax subject of corporation income tax is the total income of legal entities. In addition to federal corporation tax, the provinces and territories have their own corporation taxes. the value added tax of the federal government (goods and service tax) is an all-phase gross tax with Input tax deduction.
It taxes supplies and services of domestic companies at a general tax rate of 7 %. The provinces levy sales taxes on retail sales at rates between 6 and 10 %. No particular method is mandatory for determining profits. Depending on the type and size of the company, it is common to create an income statement or a comparison of operating assets to determine the profit.
The federal government levies three taxes similar to German business capital tax, which can be offset against general corporate income tax or its surcharges. Some of the provinces also levy taxes on capital and payroll taxes. There is no wealth tax. There are different taxes on property transactions (including real estate transfer tax, insurance tax).
Property taxes are levied by provinces and territories. There are consumption and Expense taxes z. B. on mineral oil, alcohol, beer and tobacco. Canada has concluded double taxation agreements with around 50 countries, which largely correspond to the OECD-MA.