Personal Income Tax Return Filing
Determine, if you are a Taxpayer in Canada and need to file income tax return.
Under Canada’s tax system, your income tax obligations to Canada are based upon your residency status. You need to know your residency status prior to know what your tax responsibilities and filing requirements to Canada are. You are a Canadian Residents for tax purpose, if you have a family or financial tie with Canada, and its your responsibility to file your income tax return on your worldwide income.
Whether an individual is a resident of Canada is identified by many factors. The amount of time spent in Canada is not the only factor thought about. Other aspects consist of
Residential or commercial property, capital assets (including car or furniture) in Canada
Loved ones in Canada (spouse or dependents)
checking or investment account, credit card in Canada, and
other social and financial ties.
Determine if you are non-resident or deemed resident of Canada, and on what income you owe tax to Canada?
An individual who is a homeowner of Canada, and relocates to another world, could still be a citizen of Canada for tax purpose. If you left Canada in the year to take a trip or live abroad, see the Canada Revenue Agency (CRA) information Individuals – Leaving or getting in Canada and non-residents.
If you are a non-resident or newbie to Canada, you need to report your world income for the part of the year that you were a citizen of Canada. Some personal tax credits will be prorated based upon the day you immigrated to Canada.
A person who is not a citizen of Canada for any part of the year, and visits Canada for less than 183 days in a year, will pay Canadian income tax just on income earned from Canadian sources.
An individual who is not a resident of Canada for any part of the year, however who visits Canada for an overall of 183 days or more in a year, may be deemed to be a resident of Canada, and based on Canadian income tax, the world wide income for the whole year is taxable proportionately.
Non-residents may or may not need to submit a Canadian income tax return. Much Canadian source income will have had Canadian tax withheld when it was paid, and in most cases, there is no requirement to submit a Canadian tax return. The most typical types of income earned in Canada which are needed to be reported on a Canadian personal income tax return are:
income from employment in Canada.
earnings from a company carried on in Canada.
taxable part of Canadian scholarships, fellowships, bursaries, and research study grants, and.
taxable capital gains from the disposal of taxable Canadian home.
When a non-resident or deemed resident files a Canadian tax return, they are taxed at the present federal tax rates, plus a surtax of 48% of the federal tax, unless income was made from a company with a long-term establishment in Canada. In this case, provincial or territorial tax is paid on that earnings.
If a tax treaty exists between Canada and your country of home, the terms of the treaty might get rid of the tax or reduce on some types of income. You might be a deemed non-resident of Canada for tax purposes if you were a resident of Canada in the year, and, under a tax treaty, you were a citizen of another country.
