International Tax Services Office

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International Tax Services Office

• Welcome to Canada
• International Students

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Session objective

• To give you important information on how to file
  an income tax return as a newcomer to Canada.
• Brief overview of residency and how it affects
  tax.
• To tell you about the tools and resources offered
  by the Canada Revenue Agency (CRA) that are
  available to help you file your tax returns.

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Canadas tax system

• Based on residency not on citizenship.
• Self-assessment system means you are responsible
  for reporting your income and paying the correct
  amount of income tax.

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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.

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Residential Ties in Canada

• Dwelling place available
• Spouse and/or dependents
• Personal property
• Memberships
• Economic ties

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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.

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Residency Status

• Resident
• Non-Resident
• Deemed Resident
• Deemed Non-Resident

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Resident of Canada

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

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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.

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Non-Resident

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

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Deemed Non-Resident

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

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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 Individuals Residence Status
• CRA Web site
• www.cra.gc.ca/internationalstudents

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Do you have to file?

• You owe taxes
• We sent you a request to file

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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)

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Tax Package

• The Canadian tax return comes in two booklets
  one is a Guide and the other a Forms booklet.
  The Forms booklet is for a province or territory.
  
• Resident
• File under the province where you normally
  resided on December 31st 2011

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How to complete a return ?
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Income tax return Identification area

• No social insurance number (SIN)?
• Contact a Service Canada (SC) office for
  information about applying for a SIN or visit
  their website for more information.
• www.servicecanada.gc.ca
• Can I use my expired 900 SIN to file my income
  tax return?
• Yesyou can use your expired 900 SIN to file
  your income tax return.

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No Social Insurance Number (SIN)?

• Not allowed to get a SIN?
• File Form T1261,
• Application for a Canada Revenue Agency
  Individual Tax Number (ITN)

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Information about your residence

• Date of entry
• Newcomersenter the date you arrived in Canada.
• We need this information to calculate any
  benefits that you may be entitled to.

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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
  website at www.cra.gc.ca, or by calling
• 1-800-959-2221.

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

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If you are a resident who entered Canada for the
first time in 2011, put in your date of entry

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GST/HST Credit and Foreign Property Reporting
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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.

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(No Transcript)
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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

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Information Slips

• T4 Employment Income
• T4A Other Income
• T5 Statement of Investment Income
• T2202A Tuition, Education and Textbook
  Amounts Certificate

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Teacher Research Assistants

• Report employment income at line 101
• See your T4 slip

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T4 Information Slip
2011
L. 101
QC
30
2011
310
00
10,391
58
ON
116
00
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You can always refer to the reverse side of a
slip for more information
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T4A Other Income
Footnote Code
04 Research Grant
Scholarships and
05 Scholarship
research grants
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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

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Other Income (line 130)

• Scholarship
• Bursaries
• Fellowship
• Artist Project Grant
• Prize for Achievement in field of study

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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.

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Deductions

• You may be entitled to deductions which may
  reduce your taxable income, for example
• Moving expenses
• Child Care expenses
• Other expenses

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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.

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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
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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

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Credits

• Non-Refundable Tax Credits
• Personal amounts
• Tuition fees
• Education amount
• Medical expenses

• Refundable
• Tax Credits
• Provincial property tax credit
• Sales tax credit

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Schedule 1
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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, 2011.
• 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 10,527.00 6,921.86
• 365 days in 2011
• Jane will enter 6,921.86 on line 300 of her
  Schedule 1.

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Claim full non-refundable tax credits?

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

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Tuition, education, and textbook amount

• Use Schedule 11
• Take the information from T2202A

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T2202A
Months full-time
Months part-time
Tuition Fees
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Schedule 11
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Textbook Amounts

• 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.

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Public Transit Passes Amount

• You can claim the cost of monthly public transit
  passes if you had Canadian source income during
  the year.
• 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.

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Canada Employment Amount

• All employees are eligible to claim an employment
  tax credit.
• Claim the lesser of
• 1,065 and
• the amount reported at lines 101 and 104 of your
  return.

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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

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Mailing Your Return

• Newcomers should send their tax return to
• International Tax Services Office
• Post Office Box 9769, Station T
• Ottawa ON K1G 3Y4

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T1 Adjustments

• Reassessment requests should be sent using form
  T1-ADJ or with a detailed letter
• Do not send in an amended return
• For the years you are required to send your tax
  return to the International Tax Services Office,
  you must also send your reassessment requests for
  those same years to the International Tax
  Services Office

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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.

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More information

• For more information, you can call toll
• free1-800-267-5177, or go to our Web
• site at
• www.cra.gc.ca/internationalstudents

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Thank you