Capital Tax
Canada no longer imposes a federal
capital tax. The large corporations
tax (LCT) was eliminated effective
January 1, 2006.
Until recently, the majority of the
provinces also imposed a provincial
capital tax on corporations. However,
by July 1, 2012, all provinces except
Saskatchewan had eliminated
their corporate capital taxes on
resource companies.
Saskatchewan eliminated its capital
tax on July 1, 2008. However, large
resource companies and resource
trusts in Saskatchewan continue to
be subject to a capital tax surcharge
– the resource surcharge – equal to
3.0% of the value of sales of potash,
uranium, and coal produced in the
province. (The surcharge is discussed in
Provincial Mining Tax – Saskatchewan
.)
Provincial capital tax is deductible in
computing taxable income.
Land Transfer Taxes
Most of the provinces impose land
transfer taxes on transfers of real
property – land, buildings, and other
improvements. The rates of land
transfer tax vary by province and
range from 0.25% to 2.00% of the
consideration for the real property
transferred. Certain exemptions
from land transfer taxes apply to non-
arm’s-length transactions. In addition,
transfers of resource properties are
in many cases exempt from land
transfer tax.
No stamp or transfer duties are
payable on the transfer of shares. Some
provinces may impose land transfer tax
if a transfer of shares occurs within a
certain period after the transfer of real
property that was eligible for a non-
arm’s-length exemption.
© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Other Taxes
|
73