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Quebec Withholding Tax

A withholding tax is an amount of money which is deducted from the money which the person would normally pay. Most often it is deducted by the employer but sometimes by the financial institutions. Businesses and employers are responsible for collecting various taxes and duties and are also responsible for making source deductions.

The employers will withhold the Quebec income tax from the remuneration they pay, withhold the Quebec Pension Plan contribution (QPP) from the salaries and wages they pay to the employees and withhold Quebec parental insurance plan (QPIP) contributions on the remuneration employers pay to their employees. The employers must calculate the amounts due and they must remit the amount collected as tax to the Revenue Quebec by the deadline prescribed by them.

All those entities whether they are sole proprietors, partners or corporations which are carrying such operations of holding tax are referred as agents of Revenue Quebec. As an agent of Revenue Quebec, a registration must be made for a number of purposes with Revenue Quebec which includes the GST, the QST, source deductions and corporation income tax.

In Quebec if a business is a corporation, then a number will be assigned for income tax purpose by the Revenue Quebec. This number will be very much facilitating while calculating and processing the income tax return that all the corporations and businesses are required to file if they are having a business in Quebec.

There may be a reduction in source deduction of income tax, taking in to consideration person’s deductions or tax credit claimed. Contribution to an individual’s RRSP or to spousal RRSP and deduction for a loss related to a business will be taken in to account while reducing the deduction of income tax.

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