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Tag: Apply for Canada PR

Navigating the Canadian Tax System

Canadian Tax Laws

The importance of taxes in Canada is something crucial in the economic performance of a country. There are various financial aspects that will be influenced by the taxes that a country collects.

Canadian tax laws will make impact in the overall federal operations in a country. From revenue generation till debt reduction, the impact that the Canadian Tax Law makes is pretty huge. Let us discuss in detail.

Revenue Generation: Taxes are a primary source of revenue for governments. They fund essential public services such as education, healthcare, infrastructure, and defence.

Public Services and Infrastructure: Taxes enable the government to provide public goods and services that contribute to the overall well-being of the population. This includes roads, schools, hospitals, and other vital infrastructure.

Redistribution of Wealth: Progressive tax systems can help reduce income inequality by taxing higher-income individuals at higher rates and using the revenue for social welfare programs that benefit lower-income citizens.

Economic Stability: Governments use fiscal policy, including taxation, to manage the economy. Adjusting tax rates can influence consumer spending, investment, and overall economic activity.

Social Programs: Tax revenue is often allocated to fund social programs such as welfare, unemployment benefits, and public assistance, providing a safety net for those in need.

Regulation and Control: Tax policies can be used to regulate certain behaviours, such as discouraging harmful activities like smoking or encouraging environmentally friendly practices.

National Security: Taxes in Canada contribute to funding defence and security measures, ensuring the safety and protection of a country and its citizens.

Debt Reduction: Taxes in Canada can be used to pay off national debt, reducing the financial burden on future generations.

Types of Taxes in Canada

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Canada is a country bound by laws and there is a stringent taxation system followed in the country. There are various taxes formulated by the Canadian Tax Laws in the Canadian jurisdiction and they are as follows.

Income Tax in Canada

Individuals and businesses are required to pay income tax in Canada on their earnings.

Goods and Services Tax (GST)/Harmonized Sales Tax (HST)

There are consumption taxes such as the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) that apply to certain goods and services.

Corporate Tax

Federal Corporate Tax Rate: The federal corporate tax rate is applied to taxable income earned by corporations operating in Canada. The rate may vary based on the type of income and the size of the corporation.

Provincial/Territorial Corporate Tax Rates: In addition to the federal rate, provinces and territories have their own corporate tax rates, which can vary. The combined federal and provincial/territorial rates determine the total corporate tax rate.

38% of your taxable income is the basic Part I tax rate; 28% of that amount is after federal tax abatement. The net tax rate is 15% following the general tax cut. The net tax rate is 9% for private corporations under Canadian ownership that claim the small business deduction.

Personal Income Tax in Canada

In Canada, Personal Income Tax is collected from individuals from the income that they generate.

  1. Individuals are taxed on their worldwide income.
  2. Tax rates are progressive, meaning higher income levels are taxed at higher rates.
  3. Various deductions, credits, and exemptions are available to taxpayers.

The below table depicts Canadian Federal Income tax rates enforced for the year 2024.

Federal income tax rates for 2024Goods and Services Tax (GST) and Harmonized Sales Tax (HST)

GST is a federal tax, while HST is a combined federal and provincial tax in some provinces.

Some goods and services are exempt from GST/HST, and others may qualify for rebates.

Corporate Tax

Corporations are subject to federal and provincial/territorial corporate income taxes.

The tax rates vary, and there are also incentives for certain activities and industries.

Tax Filing

The tax year for individuals is the calendar year (January 1 to December 31).

The deadline for filing income tax returns is usually April 30th, but it may be extended if it falls on a weekend or holiday.

Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP)

These are popular tax-advantaged savings and investment accounts in Canada.

Provincial/Territorial Differences

Provinces and territories have the authority to levy their own taxes, leading to variations in tax rates and rules.

Canada Revenue Agency (CRA)

The CRA is responsible for administering tax laws, processing tax returns, and providing information and services to taxpayers.

Tax Credits and Deductions

Various tax credits and deductions are available to individuals and businesses, such as the Child Tax Benefit, Medical Expense Tax Credit, and others.

Laws of Taxes in Canada– A few more to know about…

Small Business Deduction

Canada provides a Small Business Deduction (SBD) to eligible small businesses, which allows them to pay a lower corporate tax rate on a portion of their income. The criteria for eligibility may vary by province or territory.

Capital Cost Allowance (CCA)

The CCA is a tax incentive that allows businesses to deduct the cost of depreciable assets over time. It helps companies recover the cost of capital investments in equipment, machinery, and other assets.

Tax Credits

Various tax credits are available to corporations in Canada, including research and development tax credits, investment tax credits, and other incentives to encourage specific activities or investments.

Taxable Capital

Some corporations in Canada may be subject to a tax on their taxable capital. This is a separate tax based on the capital employed by a corporation.

Transfer Pricing Rules

Canada has transfer pricing rules to ensure that transactions between related entities are conducted at arm’s length, preventing the manipulation of prices to reduce taxable income.

Tax Filing and Compliance

Corporations are required to file an annual corporate income tax return. The filing deadline is generally six months after the end of the corporation’s fiscal year.

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Visa Extension: How to Extend your stay in Canada?

If you are in Canada or planning to travel to Canada, it is obvious that you will have a definite validity for your visa for which you should be bound to. But what if you are willing to remain in Canada for some more time or indefinitely but with out violating the immigration rules of the country!!

Have you ever wondered if that is possible or not? If you did, the answer is YES! You can stay in Canada even if your visa validity expires. There are ways to get Canada visa extension which will resume your stay!

But the visa extension also depends upon the type of visa that you already hold.

For the next couple of minutes, let’s see how to extend one’s stay in Canada after the expiration of your visa validity.

Types of Canada Visa Extension

Visa Extension for Visitor Visa: If you’re in Canada on a visitor visa, you can apply for an extension before your current status expires. You’ll need to demonstrate the reasons why you want to extend your stay, like further travel plans or family visits. You will also need to meet the eligibility criteria.

Work or Study Permit Extension: Individuals with work or study permits can apply for an extension before their permits expire. The process typically involves demonstrating continued eligibility and meeting specific requirements related to work or study.

Super Visa Extension: For parents and grandparents of Canadian citizens or permanent residents who have a super visa, extensions are possible. This visa allows extended visits up to 2 years per entry.

Temporary Resident Permit (TRP) Extension: If you have a TRP due to inadmissibility reasons, you might apply for an extension. 

Visa Extension for PR: If you’re in the process of applying for permanent residency through Express Entry or other programs, there might be options to extend your stay in Canada while your application is being processed.

The following is the common Canada Visa Extension procedures which will be applied to all the visa types!

Canada Visa Extension Procedure

Eligibility: Ensure you’re eligible for an extension. You must apply before your current status expires and demonstrate that you’ll leave Canada when your extended status ends.

Application: Visit the Government of Canada’s official website for immigration and citizenship. There, you’ll find the necessary forms and instructions for extending your visa. The most common form used for this purpose is the “Application to Change Conditions, extend my Stay or Remain in Canada.”

Note: People might go wrong in the application process, so it is recommended to get help from an expert Canada immigration consultant.

Documents: Prepare supporting documents such as a valid passport, proof of funds to support yourself and any dependents, a letter explaining why you need to extend your stay, and any other required documents based on your visa type.

Fees: Check the application fees and payment methods. Fees vary depending on the type of extension you’re applying for.

*Your immigration consultant will help you renew your visa at ease.

Submission: Complete the application form accurately and submit it online or by mail to the appropriate immigration office. Ensure you’ve included all required documents and fees.

*The application process will be looked after by your immigration coordinator when getting help form a professional.

Processing Time: Processing times vary. You can check the current processing times on the government website to have an idea of how long it might take.

Decision: You’ll receive a decision regarding your application. If approved, you’ll receive a new permit or updated documents.

Compliance: Ensure you comply with the conditions outlined in your extended stay permit, such as maintaining valid health insurance and following other stipulated requirements.

Wrapping up…

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We are just a click away! Make your transient stay in Canada a permanent one! We will help you.

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Frequently Asked Questions

1. Can you stay in Canada after applying for visa extension?

Yes, you can legally stay in Canada while you wait for a decision on your Canada Visa Extension

2. How many days can I stay in Canada after my visa expires?

You can apply for a status restoration (not renewal) and can stay for an additional 90 days in Canada.

3. How many times can I extend my stay as a visitor in Canada?

You can renew extend your Canada visit visa by renewing it as many times as you want if wish to remain in the country.

How to extend the Temporary Residence status in Canada?

Immigration, Refugees and Citizenship Canada (IRCC) permits a few options that allow temporary residents in Canada to remain in the country while they wait for a decision regarding temporary or permanent status.

For instance, if a temporary resident in Canada applies for a new temporary status, then they don’t need to leave Canada even if their documents expire before IRCC takes a decision. Students, visitors, and temporary foreign employees can preserve their temporary resident status through maintained status in order to remain in Canada until they hear about their new application.

Bridging Open Work Permit (BOWP) may be beneficial for temporary residents who are applying for permanent residency and whose documents are about to expire

Post-Graduation Work Permit cannot be renewed or extended, While some temporary residency permits can be.  However, this does not always indicate that these workers are not eligible for another type of work permit.
A temporary Resident Visa (TRV) doesn’t paves way for working or pursuing an academic in Canada.  Those applicants may also be eligible to apply for a Visitor Record and be permitted to stay for longer than six months, but it doesn’t enable them to work or study. Let’s look at the programs that help people to stay in Canada, they are:

  • Work Permits
  • Study Permits
  • Post-Graduation Work Permits
  • Bridging Open Work Permits
  • Spousal Open Work Permits

Work permit for Temporary Residents 

Canada has two broad categories of  Work permits, one with a positive or neutral Labour Market Impact Assessment (LMIA), and the other is LMIA-exempt.

The employer who is in need of a worker should show that they need a foreign worker to fill a vacant position and that’s how the LMIA process. The Employment and Development Services Canada (EDSC) issues the LMIA to the employer and the employer sends a copy of the confirmation letter to the worker. Following this, the worker can apply for a work permit to IRCC.

Most temporary foreign workers have work permits that are LMIA exempt. More than 315,000 work permits from LMIA-exempt, were issued in 2021, which is roughly three times more than the LMIA work permits. To hire through an LMIA-exempt work permit program, Canadian employers should submit the offer of employment through the IRCC’s employer portal.

The LMIA-exempt has open work permits, which let holders work anywhere for any employer in Canada. It also includes work permits issued through the International Experience Canada (IEC) program. IEC offers pathways for young people from particular nations who want to gain Canadian experience.

Study Permit for Temporary Residents

If your career and your financial status are viable and endurable, you can very well apply for a study permit to stay in Canada. You can work part-time for 20 hrs during the period of your academics and full-time during your summer and fall breaks. However, first, you need to be admitted to a Designated Learning Institution (DLI).

There are possibilities to get qualified to remain in Canada after completing your program through the PGWP (if you have never had one before). Additionally, you will be qualified for routes to permanent residency that are for international student graduates.

Post-Graduation Work Permit (PGWP)

This is for international student graduates who completed their post-secondary program at a Designated Learning Institution.  It doesn’t tie down the worker to only one employer or occupation and is open to work anywhere he or she wishes.

Study programs that last more than eight months but less than two years could be qualified for a PGWP. International students who successfully completed two-year or longer programs may be qualified for a three-year PGWP.

Bridging Open Work Permit (BOWP)

This allows specific permanent residency applicants to stay in Canada over the expiry date of their temporary residence status.

The given are the few programs that are eligible for a BOWP:

  • Federal Skilled Worker Program
  • Canadian Experience Class
  • Federal Skilled Trades Program
  • Provincial Nominee Program
  • Quebec Skilled Workers
  • Agri-Food pilot program

To get into a BOWP applicants need to receive an Acknowledgement of Receipt (AOR) from IRCC. But according to their circumstances, they may apply for other work permits.

Did you know if you can apply for 2 Canadian immigration programs simultaneously?

Spousal Open Work Permit (SOWP)

Generally, Spousal sponsorship can be an option if your spouse or common-law partner is a Canadian citizen or permanent resident. Spouses and common-law partners in Canada can undergo their immigration process by the Spousal Open Work Permit (SOWP).

This may be available to you if you are applying for sponsorship from within Canada. In-land applicants are those who apply from within Canada. Also, temporary residents’ spouses may get an open work permit.

If it’s possible to convince the government, then their spouse can be enrolled in this program.

To know more about the Canadian immigration pathways, stay in touch with CanApprove. And are you seeking immigration assistance? Fret not! CanApprove is right here…