What is the marginal tax rate?

The marginal tax rate is the amount of tax on your next dollar of taxable income. Canada’s income tax system is a progressive tax system. Different tax rates are applied on different levels of income.

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What is transfer pricing?

Transfer pricing describes price at which service and goods are traded across international borders between related or non-arm’s length parties, such as company divisions or a parent company and a subsidiary.

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What is Canada employment amount?

Canada employment amount is a non-refundable tax credit (what is a tax credit?) for work-related expenses, such as home computers, uniforms, and supplies. It was introduced in 2006.

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What is a tax credit?

A tax credit reduces an individual’s tax payable. Rather than specifying the amount of each credit, in Canadian tax system, most credit is calculated by multiplying the base amount by the lowest tax rate. For example, the basic personal credit for 2011 is $1,579.05. It is calculated by taking 15% of $10,527.

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What is a personal trust?

A personal trust is a legal arrangement that arises when a settlor transfers property to a trustee to hold and administer for the exclusive benefit of the beneficiaries.

Settlor: the person who sets up the trust and makes the initial transfer of the property to the trustee.

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