Canadian Tax Glossary
Plain-English definitions for 35 key Canadian tax terms.
ACB (Adjusted Cost Base)
Cost of an asset for capital gains purposes
AMT (Alternative Minimum Tax)
Minimum tax for high-income earners with large deductions
BPA (Basic Personal Amount)
Non-refundable credit that makes the first ~$16,000 tax-free
Capital Gains
Profit from selling an asset for more than you paid
Carry Forward
Unused tax room that carries to future years
CCB (Canada Child Benefit)
Monthly tax-free payment for families with children under 18
CPP (Canada Pension Plan)
Federal retirement pension program
CRA (Canada Revenue Agency)
Canada's federal tax authority
Dividend Tax Credit
Reduces double-taxation on corporate dividends
Effective Tax Rate
Average rate of tax paid across all income
EI (Employment Insurance)
Federal income replacement for unemployed workers
Foreign Tax Credit
Prevents double taxation on foreign income
GST (Goods and Services Tax)
5% federal consumption tax
GST/HST Credit
Quarterly refundable credit for low-income Canadians
HBP (Home Buyers' Plan)
Withdraw up to $35,000 from RRSP to buy first home
HST (Harmonized Sales Tax)
Combined federal + provincial sales tax
Inclusion Rate
Fraction of a capital gain that's taxable (50% in 2025)
LCGE (Lifetime Capital Gains Exemption)
Exemption on gains from small business shares and farm property
LLP (Lifelong Learning Plan)
Withdraw RRSP funds for full-time education
Marginal Tax Rate
Tax rate applied to your next dollar of income
NOA (Notice of Assessment)
CRA's confirmation of your filed tax return
Pension Adjustment (PA)
Reduces your RRSP room if you have a workplace pension
Principal Residence Exemption
Eliminates capital gains tax when you sell your home
PST (Provincial Sales Tax)
Provincial consumption tax separate from GST
QPIP (Quebec Parental Insurance Plan)
Quebec's parental benefits program (replaces part of EI)
QST (Quebec Sales Tax)
Quebec's provincial sales tax at 9.975%
Revenu Québec
Quebec's provincial tax authority
RRIF (Registered Retirement Income Fund)
RRSP successor account with mandatory withdrawals
RRSP (Registered Retirement Savings Plan)
Tax-deferred retirement savings account
T1 (General Income Tax Return)
Individual income tax return filed with the CRA
T4 (Statement of Remuneration Paid)
Annual employment income slip from employer
Tax Credit
Reduces the amount of tax you owe
Tax Deduction
Reduces your taxable income
Tax Instalments
Quarterly tax prepayments for self-employed and investors
TFSA (Tax-Free Savings Account)
Account where investment gains are tax-free