Welcome to Canada
International Students
Session objective
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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
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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
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Dwelling place available
Spouse and/or dependents
Personal property
Memberships
Economic ties
Resident of Canada
Am I a resident of Canada for tax and
credit purposes?
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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
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
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Resident
Non-Resident
Deemed Resident
Deemed Non-Resident
Resident of Canada
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An individual who enters Canada and who
has established significant residential ties with
Canada.
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
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A non-resident is a resident of another country
who has not established significant residential
ties with Canada.
Deemed Non-Resident
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A deemed non-resident is an individual who
under a tax treaty is considered a resident of
another country.
More information
Where can I get more information?
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Publication T4055, Newcomers to Canada
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Publication T4133, Are you a Newcomer to Canada?
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Form NR74, Determination of Residency Status
(Entering Canada)
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Interpretation Bulletin IT221R3, Determination of an
Individual’s Residence Status
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CRA Web site:
www.cra.gc.ca/internationalstudents
Do you have to file?
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You owe taxes
We sent you a request to file
Should you file?
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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
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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.
Resident
for the province where you normally resided on
December 31st 2007
How to complete a return ?
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)?
Not allowed to get a SIN?
• File Form T1261,
Application for a Canada Revenue Agency
Individual Tax Number (ITN)
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?
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.
Be sure this is an
address where you
can be reached
between May and
August
If you are a resident who
entered Canada for the first
time in 2007, put in your date
of entry
GST/HST Credit and Foreign
Property Reporting
Total Income
World Income
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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
•T2202A
•T4A Other Income
•T4 Employment Income
•T5 Statement of Investment Income
Teacher – Research
Assistants
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Report employment income at line 101
See your T4 slip
T4 Information Slip
2007
L. 101
QC
2007
10,391 58
ON
116
00
310
00
You can always refer to the reverse side
of a slip for more information
T4A Other Income
Scholarships and
research grants
Footnote Code
04= Research Grant
05= Scholarship
Research Grants (line 104)
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Report your net research grant
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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)
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Scholarship
Bursaries
Fellowship
Artist Project Grant
Prize for Achievement in field of study
Scholarship Income
2006 and future years
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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
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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
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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 moving expenses to move into
Canada.
Net and Taxable Income
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
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.
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Tax Credits
Tax Credits Help Reduce the
Amount of Tax You Pay –
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Non-refundable tax credits can only be used
to reduce the amount of tax you pay to zero
and any excess cannot be refunded
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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
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Personal amounts
Tuition fees
Education amount
Medical expenses
Refundable
Tax Credits
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Provincial property tax
credit
Sales tax credit
Schedule 1
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.
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Example
Jane arrived in Canada from Australia on May 6,
2007.
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 2007
Jane will enter $6,312.33 on line 300 of her
Schedule 1.
Claim full non-refundable tax
credits?
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Yes—if you have no income for the part of the
year that you were not a resident of Canada.
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Yes—if you meet the 90% rule for the part of
the year you were not resident in Canada.
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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
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Use Schedule 11
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Take the information from T2202A
T2202A
Months full-time
Months part-time
Tuition Fees
Schedule 11
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
For transit after June 30, 2006, you can claim the
cost of monthly public transit passes.
Public transit includes transit by local bus,
streetcar, subway, commuter train or bus, and
local ferry.
Receipts – Keep all your receipts and passes in
case we ask to see them.
Canada Employment Amount
All employees are eligible to claim an employment
tax credit.
Claim the lessor of:
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$1,000; and
the amount reported at line 101 of your return.
Refund or Balance Owing?
Goods and Services
Tax/Harmonized Sales Tax
Credit
As a newcomer, you should:
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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
As a newcomer, you:
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need to complete Form RC66, Canada Child Tax
Benefit Application; and
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may have to complete Schedule RC66SCH,
Status in Canada/Statement of Income
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send your completed forms to the tax centre that
serves your area.
Filing Date
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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 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
Thank you