The United States and Canada have many similarities. Laws and regulations are somewhat similar as is the monetary systems; and both speak English, of course, though some parts of Canada are, in fact, predominantly French-speaking. Canada and the US, for example, both have My Lawyer tax law systems that are quite similar in that workers must pay income tax and there are various taxes assigned to goods and services.
These similarities have helped the United States and Canada to have a great relationship, sharing such a large border. But not all laws are the same. In Canada, here are some tax regulations that are a little different than in the United States.
PERSONAL TAX RESPONSIBILITY
In the United States every person who receives an income is required to file an individual tax return, annually. In Canada, there is no such requirement. Of course, corporations must report their revenue and debts, etc, to be certain they are operating on a legal basis. It is important to note, however, that if you do not report your income and pay your taxes, in Canada, you will not be able to participate in some of the provincial tax benefit and incentive programs.
SHARED TAX RESPONSIBILITY
Essentially, then, the Canadian tax system is one of “shared responsibility;” a type of social program that allows you the freedom to file your taxes as you see fit. And the government will only really get involved if you try to participate in welfare or other tax-sourced programs without having paid into the system accordingly. It is important to note, though, that the Canadian government can—and will—enforce your tax responsibility in specific situations; as such you should keep up to date on your potential tax responsibilities every year (and keep them for several years) for good measure.
TAXES and INTERNATAIONAL INCOME
The Canadian Income Tax Act declares that an individual is an official resident of Canada (and therefore responsible for paying Canadian income tax) if they have earned income in any province of Canada for at least 182 days in any tax year; or if an individual has certain connections with the Canadian government (like serving in the Canadian Forces, which might take you out of the country). You might also be considered a resident if you have certain ties to a domestic residence in Canada, even if you earned income for fewer than 182 days.
