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International Tax Services Office. Welcome to Canada International Students. Session objective. To give you important information on how to file an income tax return as a newcomer to Canada.

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International Tax Services Office

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International tax services office

International Tax Services Office

Welcome to Canada

International Students


Session objective

Session objective

  • To give you important information on how to file an income tax return as a newcomer to Canada.

  • To tell you about Canada Revenue Agency (CRA) services that can help you and where you can get more information.

  • Brief overview of residency and how it affects tax.


Canada s tax system

Canada’s tax system

  • Based on your residency not on your citizenship.

  • Self-assessment system means you are responsible for reporting your income and paying the correct amount of income tax.


Residential ties in canada

Residential Ties in Canada

  • Dwelling place available

  • Spouse and/or dependents

  • Personal property

  • Memberships

  • Economic ties


Resident of canada

Resident of Canada

Am I a resident of Canada for tax and credit purposes?

  • At the Canada Revenue Agency, we consider you to be a resident of Canada for tax and credit purposes when you establish residential ties in Canada.

  • You usually establish these ties on the date you arrive in Canada.


Residency

Residency

Why is residency important?

  • A resident of Canada pays tax in Canada on his or her world income.

  • You must be a resident of Canada to be eligible for social benefits (GSTC and CCTB).

  • A resident of Canada can claim all deductions and credits that apply to them to reduce their tax.


Residency status

Residency Status

  • Resident

  • Non-Resident

  • Deemed Resident

  • Deemed Non-Resident


Resident of canada1

Resident of Canada

  • An individual who enters Canada and who has established significant residential ties with Canada.


Deemed resident

Deemed Resident

  • A deemed resident is a resident of another country who has sojourned in Canada for 183 days or more in a calendar year and has not established significant residential ties with Canada.


Non resident

Non-Resident

  • A non-resident is a resident of another country who has not established significant residential ties with Canada.


Deemed non resident

Deemed Non-Resident

  • A deemed non-resident is an individual who under a tax treaty is considered a resident of another country.


More information

More information

Where can I get more information?

  • Publication T4055, Newcomers to Canada

  • Publication T4133, Are you a Newcomer to Canada?

  • Form NR74, Determination of Residency Status (Entering Canada)

  • Interpretation Bulletin IT221R3, Determination of an Individual’s Residence Status

  • CRA Web site:

    www.cra.gc.ca/internationalstudents


Do you have to file

Do you have to file?

  • You owe taxes

  • We sent you a request to file


Should you file

Should you file?

  • You want to claim a refund of tax that has been withheld

  • Tuition and education amounts

  • Goods & Services Tax Credit / Harmonized

    Sales Tax Credit (if eligible)

  • Canada Child Tax Benefit (if eligible)


Tax package

Tax Package

  • The Canadian tax return comes in two booklets – one is a Guide and the other a Forms booklet. The Forms booklet should be for a province or territory.

  • Resident

    for the province where you normally resided on December 31st 2008


How to complete a return

How to complete a return ?


Income tax return identification area

Income tax return – “Identification” area

No social insurance number (SIN)?

  • Contact a Social Development Canada (SDC) office for information about applying for a SIN.

    Can I use my expired 900 SIN to file my income tax return?

  • Yes—you can use your expired 900 SIN to file your income tax return.


No social insurance number sin

No Social Insurance Number (SIN)?

Not allowed to get a SIN?

  • File Form T1261,

    Application for a Canada Revenue Agency Individual Tax Number (ITN)


Information about your residence

Information about your residence

Date of entry

  • Newcomers—enter the date you arrived in Canada.

  • We need this information to calculate any benefits that you may be entitled to.


How long in canada

How long in Canada?

Did you become a resident of Canada before last year?

  • If you became a resident before last year, you should file an income tax return for each year you lived in Canada.

  • You should put your date of entry only on the tax return for your first year in Canada.

  • You can get tax returns for previous years on our Web site at www.cra.gc.ca, or by calling

    1-800-959-2221.


International tax services office

Be sure this is an address where you can be reached between May and August


International tax services office

If you are a resident who entered Canada for the first time in 2008, put in your date of entry


Gst hst credit and foreign property reporting

GST/HST Credit and Foreign Property Reporting


Total income

Total Income


World income

World Income

  • This is taxable from your date of entry.

  • Report world income in Canadian dollars.

  • Exchange rates are available from the Bank of Canada at: www.bankofcanada.ca


Information slips

Information Slips

  • T4 Employment Income

  • T4AOther Income

  • T5 Statement of Investment Income

  • T2202A Tuition, Education and Textbook Amounts Certificate


Teacher research assistants

Teacher – Research Assistants

  • Report employment income at line 101

  • See your T4 slip


International tax services office

T4 Information Slip

2008

L. 101

QC


International tax services office

2008

310

00

10,391

58

ON

116

00


International tax services office

You can always refer to the reverse side of a slip for more information


T4a other income

T4A Other Income

Footnote Code

04= Research Grant

Scholarships and

05= Scholarship

research grants


Research grants line 104

Research Grants (line 104)

Report your net research grant

  • Subtract your expenses from your grant;

  • Your expenses cannot be more than your grant;

  • Attach to your return a list of your expenses.

  • For more information see IT-75 “Scholarships, Fellowships, Bursaries, Prizes, and Research Grants”


  • Other income line 130

    Other Income (line 130)

    • Scholarship

    • Bursaries

    • Fellowship

    • Artist Project Grant

    • Prize for Achievement in field of study


    Scholarship income 2006 and future years

    Scholarship Income 2006 and future years

    • The full amount of scholarships, fellowships,or bursaries that are received by you as a student if you are entitled to the education amount (see line 323) are no longer reported as income on your tax return.

    • If you are not eligible for the education amount, report on line 130 only the amount that is more than $500.


    Scholarship income line 130 2005 and previous years

    Scholarship Income (line 130)2005 and previous years

    • Report the total amount of the scholarship income minus $3,000 if you are entitled to the education amount (see line 323);otherwise

    • Report the total amount of the scholarship income minus $500.


    Deductions

    Deductions

    • Deductions (e.g., child-care expenses, union dues) are deducted from your total income.

    • Some deductions may not apply to you for your first year in Canada. For example, a newcomer cannot deduct movingexpenses to move into Canada.


    Net and taxable income

    Net and Taxable Income


    International students and moving expenses

    International students and moving expenses

    An international student can deduct moving expenses if he or she is:

    • Attending post-secondary courses in Canada as a full-time student and;

    • Receiving taxable-award income (e.g., scholarship) after the move. You cannot deduct moving expenses against non-taxable scholarship, fellowship, and bursary income.

    • See Form T1-M for more information.


    Foreign income

    Foreign income

    Are there exemptions under a tax treaty?

    • Call the International Tax Services Office at:

      1-800-267-5177

    • Do I have to pay tax in both countries?

      See “Federal foreign tax credit,” line 405, on Schedule 1.


    Tax credits

    Tax Credits


    Tax credits help reduce the amount of tax you pay

    Tax Credits Help Reduce the Amount of Tax You Pay –

    • Non-refundable tax credits can only be used to reduce the amount of tax you pay to zero and any excess cannot be refunded

    • Refundable tax credits can be used to reduce the amount of tax you pay to zero and any excess may be refunded


    Credits

    Non-Refundable Tax Credits

    Personal amounts

    Tuition fees

    Education amount

    Medical expenses

    Refundable

    Tax Credits

    Provincial property tax credit

    Sales tax credit

    Credits


    Schedule 1

    Schedule 1


    Calculating federal non refundable tax credits

    Calculating federal non-refundable tax credits

    • You may have to prorate your non-refundable tax credits based on the number of days you are resident in Canada.

    • The rules are the same for calculating provincial or territorial non-refundable tax credits.


    Example

    Example

    Jane arrived in Canada from Australia on

    May 6, 2008.

    She entered “05-06” in the Identification area of her return. She calculated that from May 6 to December 31 there were 240 days.

    Jane claims the basic personal amount calculated as follows:

    240 days in Canada x $9,600.00 = $6,312.33

    365 days in 2008

    Jane will enter $6,312.33 on line 300 of her Schedule 1.


    Claim full non refundable tax credits

    Claim full non-refundable tax credits?

    • Yes—if you have no income for the part of the year that you were not a resident of Canada.

    • Yes—if you meet the 90% rule for the part of the year you were not resident in Canada.

    • You must attach a note to your return showing your world income for the part of the year you were not resident in Canada.


    Tuition education and textbook amount

    Tuition, education, and textbook amount

    • Use Schedule 11

    • Take the information from T2202A


    T2202a

    T2202A

    Months full-time

    Months part-time

    Tuition Fees


    Schedule 11

    Schedule 11


    Textbook amount 2006 and future years

    Textbook amount 2006 and future years

    You are eligible to claim an amount for textbooks only if you are entitled to claim the education amount.

    The amount is:

    • $65 for each month you qualify for the full-time education amount; and

    • $20 for each month you qualify for the part-time education amount.


    Public transit passes amount

    Public Transit Passes Amount

    For transit after June 30, 2006, you can claim the cost of monthly public transit passes.

    Public transit includestransit by local bus, streetcar, subway, commuter train or bus, and local ferry.

    Receipts – Keep all your receipts andpasses in case we ask to see them.


    Canada employment amount

    Canada Employment Amount

    All employees are eligible to claim an employment tax credit.

    Claim the lesser of:

    • $1,000; and

    • the amount reported at line 101 of your return.


    Refund or balance owing

    Refund or Balance Owing?


    Goods and services tax harmonized sales tax credit

    Goods and Services Tax/Harmonized Sales Tax Credit

    As a newcomer, you should:

    • complete Form RC151, GST/HST Credit Application for Individuals Who Become Residents of Canada; and

    • send the completed Form RC151 to the tax centre that serves your area.


    Canada child tax benefit

    Canada Child Tax Benefit

    As a newcomer, you:

    • Need to complete Form RC66, Canada Child Tax Benefit Application; and

    • May have to complete Schedule RC66SCH, Status in Canada/Statement of Income

    • Send your completed forms to the tax centre that serves your area.


    Filing date

    Filing Date

    • On or before April 30th

    • On or before June 15th for self-employed individual

    • In all cases, any outstanding balance is due on or before April 30th


    More information1

    More information

    Newcomers should send their tax return to:

    International Tax Services Office

    2204 Walkley Road

    Ottawa ON K1A 1A8

    For more information, you can call toll free

    1-800-267-5177, or go to our Web site at

    www.cra.gc.ca


    International tax services office

    Thank you


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