Which province gets your tax?

Employment and investment income are both taxed by the province in which you reside on December 31. This is the case even if the income was earned in another province. Business income, on the other hand, is taxed in the province where the business was conducted. If you carry on the same business through a permanent establishment in more than one province, a complicated formula is used to determine what portion of your business income is taxable in each province.

Unless you earn self-employed business income (see above), provincial tax is based on your province of residence on December 31. If you’re transferring to a province with a lower tax rate, you should consider accelerating your departure to arrive before the end-of- year deadline. Conversely, if a move to a province with a higher tax rate is in your future, consider postponing your relocation until after the year-end.