Companies operating in Newfoundland and Labrador are taxed by the federal and provincial governments on the basis of net income, and municipalities tax business property and/or asset value. The overall business tax climate in Newfoundland and Labrador is quite favourable. The Corporate Income Tax rates are very competitive. The Harmonized Sales Tax has resulted in the removal of tax on business inputs. Unlike many provinces, Newfoundland and Labrador does not impose a general capital tax. While Newfoundland and Labrador imposes a 2% Health and Post Secondary tax, the exemption threshold relieves virtually all small businesses from this tax.
At the provincial level, businesses remit corporate income tax, health and post-secondary education tax, and workers compensation premiums. Workplace Health, Safety and Compensation Commission premiums are paid by all businesses operating in Canada. These premiums provide income support to workers who are injured on the job and allow your company to avoid carrying independent liability insurance.
Newfoundland and Labrador's Provincial Sales Tax (PST) and Canada's national Goods and Services Tax (GST) are combined to form the 13% Harmonized Sales Tax (HST). The HST uses the same tax base and operating rules as the federal GST. Businesses may be entitled to Input Tax Credits (ITCs). The HST is administered by Canada Customs and Revenue Agency.
Federal Corporate Taxes and Premiums
In Canada, there are several taxes, tariffs, and duties. The Canada Revenue Agency (CRA) is the federal government department responsible for administering tax laws for the Government of Canada and for most provinces and territories. The most common taxes are:
- Income tax
- Employment insurance premiums (EI)
- Canada Pension Plan contributions (CPP)
- Goods and Services Tax (GST/HST)
Local governments provide a wide range of municipal services and form a tax base from one or both of property tax and business occupancy tax. While property tax rates vary across municipalities, rates are still well below national averages. A number of municipalities in Newfoundland and Labrador offer municipal tax relief through the province's Economic Diversification and Growth Enterprises Program (EDGE). Towns may also meter water usage and administer local waste disposal fees, however, these rates tend to be low.
For more Information about these and other business taxes in Newfoundland and Labrador, Click Here
