BU357 Chapter Notes - Chapter 2: Independent Contractor, Tax Treaty, Withholding Tax
Document Summary
There are several criteria that can be used to establish income tax liability in a country including citizenship, domicile and residence. In canada, the major criterion used is residence. Resident: pays tax in canada on worldwide income. Non-resident: pays tax in canada on income earned in canada from employment, carrying on business, and from disposal of taxable canadian property. Part-year resident: for period of residency; pays tax as resident; for period of non-resident, pays as non-resident. An income tax shall be paid as required by this act on the taxable income for each taxation year of every person resident in canada at any time in the year. Taxable income of a resident of canada is subject to canadian income tax regardless of the country in which the income is earned/generated. To avoid double taxation, canada has negotiated a number of international reciprocal tax agreements.
