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Let me start this blog off with a disclaimer: We are immigration lawyers not accountants nor tax lawyers. Therefore the following information is general information only and is not to be taken as legal or accounting advice. Having said that, as immigration lawyers, we are asked all the time about tax. So I thought it would be a good idea to provide some basic information about tax issues for new immigrants to Canada. Enjoy!
Along with our different culture, climate, and a slew of other new and exciting challenges, taxes are one more thing new residents to Canada must face now that the 2009 tax year is almost at its end. Many services that are available to Canadians are provided from tax revenue including health care, law enforcement, public utilities and schools. It is up to Canadian residents to ensure they are responsible in reporting their income each and every year. Taxes can be filed through tax preparation companies and accountants or through the mail, and you can find Canadian tax form booklets at any post office or Canada Revenue Office or by calling 1-800-959-2221. Currently, new Canadians are unable to file taxes using the online system.
Since tax regimes differ immensely from nation to nation, here are some things to be aware of as a new immigrants to Canada:
As a newcomer to Canada you will need a Social Insurance Number (SIN). Your SIN is a unique identification number typically used for government and employment purposes. A SIN can be applied for at any Service Canada office.
Residents of Canada are taxed on all of the income they receive, no matter where across the globe it comes from. If you only live in Canada for part of the year, any other income must be reported on your Canadian income tax return. Any investors creating income for you in an originating country may have to be told of your Canadian residency status. As of 1999, any income from these properties must be reported on your Canadian tax return. While this applies to everyone, new Canadians are far more likely to have investment properties in other countries.
Most expenses incurred as a result of your move to Canada are not tax deductible, unless they can be deducted because you are a student and against scholarships or research grants you have received. Otherwise, these moves are typically considered personal expenses.
New residents will be able to receive the GST credit. Based on your income, the GST credit is a small refund that is given quarterly. You can sign up to receive it if you are eligible when you file your taxes for the year (FORM RC151). A Canada Child Tax Benefit Application (Form RC66) should be completed as soon as possible after you arrive if you have children as you may qualify for these benefits.
Preparation and further research or consultation with tax specialists are the best bets for a new Canadian when it comes to dealing with the Canadian tax system and avoiding financially-destructive surprises.