Canada has a multi-layer tax system which can confuse many newcomers to Canada. The Canada Revenue Agency (CRA) is responsible for collecting taxes in Canada and you can direct all general inquires to them. You have to file taxes in Canada if you have Canadian income or you are a resident for tax purposes.

In Canada you are taxed based on your residential ties and not citizenship. You need to know your residency status before you can determine what filing obligations you have.

Residential ties are generally based on the following:

• If you have a home or other personal property in Canada such as a car or furniture
• If your spouse or dependents are  in Canada
• If you have social ties in Canada such as memberships in Canadian organizations
• Economic ties in Canada, such as Canadian bank accounts or credit cards;
• If you have a Canadian driver’s licence or a Canadian passport
• If you have health insurance with a Canadian province or territory

New comers to Canada are taxed in the exact same way other Canadians. In order to qualify for Canadian benefits all individuals have to file taxes (even if you have zero income or zero taxes owing).

Each year you have to file a tax return to determine your taxes owing. This is also essential to receive all government benefits and subsidies. Each return consist of your income (includes income from outside Canada) and your tax deductions. In Canada each taxpayer is responsible for determining the taxes owing and remit the correct amount to the CRA. The CRA has the authority to inspect your tax returns and make adjustments if required.

If you move to Canada part way through the year you will have already paid taxes in your previous country, Canada has tax treaties with many other countries which helps eliminate double taxation.

Other Tips for New Comers to Canada

Social Insurance Number (SIN)

This is unique nine digit number issued by Service Canada and allows new Canadians to work. Make plans to apply for the SIN number right away.

Health Insurance Card

Everyone is required to have their own health card in Canada. You can apply for a health card at your local provincial service center. All permanent residents and landed immigrants are eligible for this medical insurance.

Education for Children

Canada’s public education is run by the provincial governments and territories and is funded through your taxes. Public education is free and parents can register their children at a local school.