Preparation of tax returns for the sale of wood products
All residents and non-residents of Canada who have sources of income there are required to pay taxes at the end of each calendar year. To do this, they must fill out a tax return and submit it to the CRA no later than April 30. Those who are not sure how to fill it out can take advantage of the taxation services by experienced accountants and lawyers.
The federal tax directly depends on your salary:
- If your annual income is $ 7.500-42.700, then you need to pay 15%.
- If your income is $ 42.700-85.400, then you need to pay 22%.
- With an annual profit of $ 85.400-132.400, the tax is 26%.
- If your annual salary exceeds $ 132.400, you need to pay 29% to the budget.
Each of these rates was approved by the Canadian government in 2002. Since then, Canadian tax legislation has not been changed. Payment of federal taxes is imposed on both individuals and legal entities. But for the latter, the average rate is 30%. For businesses using loans, the tax rate is lower and ranges from 13% to 22%. If the company does business in the United States, then the tax liability may affect both countries. In this case, the US tax preparation will be helpful. It will help you figure out how, to whom, and how much you should pay.
Product and Service Taxes
In Canada and some other countries, the tax on products and services is called the value-added tax. Its value within the country ranges from 5% to 7%, and the exact figure depends on the province. If you need to calculate and pay taxes to the state budget, you can contact tax companies in Canada.
Canadians who own real estate are required to pay tax for it. In 2021, residents of Canada must pay 1-2% of the total value of their real estate. This tax must be paid once a calendar year, and these funds are subsequently used for the maintenance and reconstruction of state buildings and highways.
Another tax comes up when you buy real estate. And it doesn’t matter who exactly buys it, a resident or a non-resident of Canada. In this case, the tax rate depends on the value of the property. The higher it is, the higher the tax. For example, if the cost of real estate is 50 thousand CAD, the tax rate will be 0.5%. If the property is more expensive than 250 thousand CAD, it will be 1%, etc.
If you do not want to delve into the specifics of taxation and are afraid of making a mistake that will lead to serious consequences, you can contact professionals. Their help with tax preparation in Canada will be inexpensive and will save you from unnecessary difficulties.