The Basics of Taxation and How a Tax Planning Attorney Can Help

June 2, 2021 by No Comments

With all the different types of taxes, it’s no wonder that people regularly consult with a tax planning attorney to help them strategize on how to minimize their tax liability. In Canada, taxes, duties, and fees are collected by different levels of government to fund their programs and services. The three levels of taxation include Federal, Provincial / Territorial, and Municipal. It is very important to understand the differences and the types that apply to you as a regular working citizen or business owner. This is where tax management and strategizing becomes really helpful in terms of making things easier and complying with the provisions of tax laws and related regulations.

The most common type of tax is income tax that is derived from an individual’s salary or from the income of a specific company. Most of us are familiar with this type, and in most cases, a corporation will withhold income tax from an employee to ensure that it is filed regularly.

Another type is the consumption and consumption tax, which is applied to the production, sale or consumption of goods and services. This is a form of indirect tax. Excise duties are collected by the producer or retailer and not paid directly by the consumer and as such often remain “hidden” in the price of a product or service, rather than being listed separately.

Property taxes are charged for the sale and transfer of ownership of different types of properties or assets. In general, properties are classified into land, land improvements (fixed assets such as buildings), personal property (mobile assets such as vehicles), and intangible property. Many provinces collect taxes on real estate based on the current use and value of the land. This is the main source of income for most municipal governments. Although property tax levels vary between municipalities in a province, there are generally common property appraisal or evaluation criteria established in provincial legislation.

Another common type of tax is the import / export tax. Import duties and taxes are due when goods are imported into the country, either by an individual or a commercial entity. In addition to tariffs, imports may be subject to other taxes such as GST (General Sales Tax), PST (Provincial Sales Tax), or a combination of both known as HST (Harmonized Sales Tax), depending on the type. of importer and province. The amount of duties and taxes owed depends on the place of residence of the importer and not on the place where the goods enter the country.

These are just a few of the basic types of taxes that people typically pay in Canada. It can get confusing and even overwhelming when you start calculating and even itemizing all the different taxes that a person must pay. That is why it is advisable to consult with a tax professional and seek their help both in managing and developing strategies on how to pay and minimize your taxes. This is in no way to evade your taxes. You’re just making sure you don’t have to pay anything more than what you have to pay. This is where a tax planning attorney can be of great help.

Leave a Comment

Your email address will not be published. Required fields are marked *