Non‐residents who earn Canadian employment or self‐employment income, or who disposed of taxable Canadian property, are required to file an income tax return and pay taxes on that income to the Canadian government, unless there are overriding considerations in an existing tax treaty between Canada and the individual’s country of residence. The rate of tax levied on an individual is determined by the individual’s taxable income. As income increases, the marginal rate of tax increases. A number of tax credits are allowed, which reduces the amount of tax due by the taxpayer. The tax credits available are varied and include, but are not limited to: Personal and spousal credit Medical expenses tax credit Child tax credit Education tax credit (depending on status and nature of education) Foreign income tax credit Investment tax credit Charitable donations tax credit Federal and provincial political party donation tax credit Overseas employment tax credit Pension credit Disability credit Dividend tax credit. These and other tax credits are applied in calculating the individual’s tax liability. Capital gains are included in taxable income at the rate of 50%. Provincial income tax The federal government (with the exception of Quebec which requires the filing of a separate Quebec personal tax return) collects provincial income tax. The federal government provides a tax abatement to all residents of Quebec.
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