CASE ASSIGNMENT #2 INCOME TAX Case #2 – Canadian Tax System Compare the Canadian income tax system with another nation’s tax system. Examine and describe current tax laws, concepts or calculations of...

CASE ASSIGNMENT #2
INCOME TAX
Case #2 – Canadian Tax System
Compare the Canadian income tax system with another nation’s tax system. Examine and describe current tax laws, concepts or calculations of a nation of your choice and discuss the similarities and differences with the Canadian income tax system
Current Tax laws
The Canadian Tax system is managed by the federal Income Tax laws and as per the sales tax and corporate tax laws of the country. The Canadian residents are subjected to tax based on the income while the non-residents are charged based on the income from Canadian sources. The non-resident employed in Canada in a particular year and carried with their business in Canada are accountable to pay income tax on the non-resident’s taxable income which is generated in Canada. The Canadian residents are subjected to tax based on their globally earnings. On the other hand, the non-residents Canadians are charged tax based on the income from Canadian sources. A corporation which is incorporated in Canada post April 26th, 1965 will be deemed to be resident in Canada as per the Income Tax Act. There are more than 85 Income Tax treaties with respect to other jurisdictions. As per the tax treaties, there is no taxes charged as per the Income Tax Act, expect to the amount of profits which are attributable with respect to a fixed place of business, the business profits of a Canadian non-resident and also resident of other jurisdiction (Osler, 2021).
On the contrary, as per the Italian Income tax the individual income is progressive. The higher will be the income, the more will be tax rate which will be payable. As on 2021, the tax rate of an individual is 23%-43%. Additionally, with respect to the direct taxation, the regional tax is at 0.7% to 3.33% while the municipal tax rate is at 0%-0.9%. If one is a foreign resident and working in Italy, the individual will be taxed on the income earned during their stay in Italy. On the contrary, if one is an Italian resident and have stayed in the country for more than 183 days then the individual is considered as the center of economic interest in Italy where the worldwide income is subject to “imposta sui redditi delle persone fisiche”, IRPEF. There are expectation of more changes and talks about bringing in three levels of tax instead of the previous two which were required to be introduced. The resident individuals are liable for IRPEF based on the worldwide income. Further, the non-resident individuals are also subject to IRPEF from the income which is arising from Italian sources. Following are the incomes which are considered as income within Italy:
1. Income generated from employment as well as self-employment and is derived from services which are performed in Italy.
2. Income from the capital which are paid by state in Italy
3. Business income from a permanent establishment in Italy
4. Income received from patents, know-how, trademarks if paid by state...