Written by: Steve Randall, Shared by: wealthprofessional.ca
Canada is the best in the G7 nations for the ease of preparing, filing, and paying taxes.
However, the tax system is more favourable for small businesses than for large corporations, which may impact competitiveness according to a new report from PwC.
On average, small to medium-sized Canadian companies make eight payments per year on their taxes (vs. an average of 24 globally) and take 131 hours (vs. an average of 237 hours globally) to comply with the tax regulations.
"The competitiveness of Canada's tax regime was put front and centre when the US announced its tax reform. Canada's federal government's response in the latest fall economic update was a solid step in the right direction to encourage investments by small, medium and large businesses, and most importantly, to protect Canadian jobs," said Peter van Dijk, National Tax Policy Leader, PwC Canada.
But while there have been some measures announced to ease the burden on small businesses, the report highlights that large businesses have effective average and marginal tax rates for Canadian businesses that are significantly higher than the US following tax reforms south of the border.
"In previous years, Canada's comparatively low corporate tax rate was attractive, but now the US tax reform poses a serious risk to future investments," adds van Dijk.
PwC Canada recently published a report and webinar on the global tax landscape which examines how the tax system is increasingly expected to contribute to a business’ success and drive growth.