For people looking towards migration based on tax saving, Canada was not a very popular option, but this is likely to change with the modifications coming up in the taxing program to be implemented by the liberal government, that has been newly elected. The change that will take place soon, is likely to be more beneficial to people belonging to the lower income group as well as the middle income group.
Who will benefit the most?
Under this system, the people in the category of higher income, will have to pay a higher percentage of tax. To provide more clarity on this aspect, people who are earning between the range of $45,282- $90,563, will have to pay only 20.5% which is a reduction from what was being paid earlier. Earlier people whose earnings were within the above mentioned range paid 22%.
Bringing about these changes, will cause another set of people earning 2,00,000 dollars to be taxed nothing less than 33%. A major part of this change is directly related to the introduction of tax free savings account [TFSA]. Its introduction is expected to improve the inflow immigrants to a great extent, because of the way it is designed to benefit people.
The immigrants must look forward to…
The new scheme related to this, which comes in the form of tax free savings account, is a great savings options for immigrants who come to Canada. The new rule has set the maximum amount to be deposited every year in this account at 5,500 dollars. The other advantage with the newly implemented rule is that, it does not mandate the need to have previous savings in the country.
This was not the case earlier with regard to Registered Retirement Saving Plan (RRSP). This plan made it compulsory for one to have previous savings in Canada. To further differentiate between the TFSA and the RRSP, withdrawal from the former, does not effect the other benefits. Also, whatever you contribute to TSFA is not tax deductable while contributions made to RRSP are tax deductable.
The new government will be implementing these beneficial changes on the 1st of January 2016.
Source: Emirates 247