HALIFAX, Aug. 19 /CNW/ - Wherever you live or your business operates in Canada, you can't escape being taxed, but the amount of tax will vary by province. PricewaterhouseCoopers has released its annual publication, Tax Facts and Figures, which is a reference tool to help readers understand the personal and corporate tax rates and changes across Canada. Here are some of the highlights among the provinces:
If you are looking to purchase a new home, New Brunswick land transfer tax rates are tops for eastern Canadian provinces where you'll only pay $1,065 for a $400,000 home. It's almost as inexpensive in Newfoundland where the cost is $1,698. The average land transfer cost for a $400,000 home in Canada is approximately $3500. The province offers a 40% film tax credit on qualifying salary and wages and also a regional bonus tax credit of 10% for qualifying labour costs. The combined federal-provincial corporate income tax rate in New Brunswick is among the lowest in Canada at 29.5% for 2010. This combined rate will be decreasing to 23% by 2013. Similar to the other Atlantic Provinces, New Brunswick also offers a fully refundable 15% research and development tax credit to corporations that incur qualified SR&ED expenditures in the Province.
Intending to advance the competitiveness of Nova Scotia's manufacturing industry by encouraging investment for modernization and productivity improvement, the province offers a 10% Manufacturing and Processing Investment Credit on the cost (max $1 million) of qualified property in addition to the 10% Atlantic Investment Tax Credit offered by the federal government. Nova Scotia also offers generous tax credit programs to encourage the development of interactive digital media products and scientific research & experimental development (SR&ED). The Province offers a digital media tax credit for costs directly related to the development of interactive digital media products. The total refundable tax credit amount is equal to the lesser of 50% of eligible Nova Scotia labour expenditures or 25% of total expenditures made in Nova Scotia with a geographic area bonus for products developed outside the Halifax Regional Municipality (10% on labour or 5% on total expenditures). In addition, the Province offers a fully refundable 15% research and development tax credit to corporations that incur qualified SR&ED expenditures in Nova Scotia.
Newfoundland & Labrador
Newfoundland & Labrador offer the Economic Diversification and Growth Enterprises (EDGE) Program which provides incentives to encourage significant new business investment in the province to help diversify the economy and stimulate new private sector job creation, particularly in rural areas. Companies approved for EDGE status are eligible for various incentives and benefits, including a 100% rebate on provincial corporate income tax and the provincial health and post-secondary education (payroll) tax for a period of 10-15 years, a 50% rebate on federal corporate income tax for the same period and a further five-year period of partial rebates on those taxes, declining by 20% in each year of the five-year phase-out period. In participating municipalities, there is also a 100% rebate on municipal property and/or municipal business taxes for 10-15 years, followed by a five-year phase-out period. The Province also offers a fully refundable 15% research and development tax credit to corporations that incur qualified SR&ED expenditures in Newfoundland & Labrador. To provide incentives to the private film and television production industry to create economic growth in the Province, qualifying corporations are eligible for a fully refundable film and video tax credit based on the lesser of 40% of eligible labour expenditures or 25% of total production costs of an eligible project.
Quebec is below the Canadian average in general corporate income taxes with a combined federal-provincial rate of 29.9% for December 31, 2010 year ends. The average across the country is 30.7%. Quebec also provides special tax "holidays" for business that undertake major investments and locate manufacturing or processing in remote regions. To support its universities and entrepreneurship, the province also provides incentives to those commercializing intellectual property developed in Quebec universities or public research centres. The province offers a 25% production services tax credit on all qualifying production costs. Incentives are also available for film dubbing, up to 35% on eligible labour, as well as a 20% computer animation and special effects tax credit on all qualifying labour costs.
Ontario offers generous tax incentives for research and development and entertainment and media tax credits. Ontario corporations will also benefit from scheduled corporate tax reductions; the combined federal/Ontario general corporate tax rate will fall by almost 6 percentage points, dropping to 25% by July 1, 2013. Ontario also provides incentives for businesses that commercialize intellectual property developed by Canadian universities, colleges or research institutions. The province offers a 25% production services tax credit on all qualifying production costs as well as a 40% Ontario interactive digital media tax credit and a 35% Film and Television Tax credit (higher for first-time producers if principal photography is outside the Greater Toronto Area).
This year's updated version shows that Alberta is the place to be if you are planning to leave an inheritance to your children. Its probate fees are extremely low - $400, regardless of the value of the estate. For estates valued at $500,000, Prince Edward Island and New Brunswick have probate fees that are quite reasonable compared to other provinces at $2,000 and $2,500 respectively; the average in Canada is over $3,500. If you are making $150,000 in ordinary income (e.g. salary or interest) in 2010, you are best off living in Alberta where you will pay a combined federal and provincial tax of $45,304. The province's general corporate tax rate is the lowest among the provinces with a combined provincial-federal tax rate of 28%. Alberta also offers a grant of 20% to 29% for all eligible film production costs in the province.
If you are making $70,000 in ordinary income (e.g. salary or interest) in 2010, from a personal income tax perspective, you are best off living in British Columbia where you will pay a combined federal and provincial tax below $15,000. Ontario has the second-best rate at $15,492 while Alberta has the third lowest rate at $16,292. British Columbia provides both a 21% film incentive tax credit on all qualifying production costs and a 33% production services tax credit on qualified B.C. labour. As well, the province is introducing a 17.5% interactive digital media tax credit.
Tax Facts and Figures includes Canadian tax changes and withholding tax rates affecting taxpayers engaged in international transactions. It also provides U.S. corporate and personal income tax rates, as well as U.S. estate tax rates. The booklet is available at www.pwc.com/ca/taxfacts.
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