If you are an international student residing in Canada you may have to file for a Canadian income tax return to receive a refund or tax credits that you might be eligible for. If you want to more about tax filing in Canada for international students, you have come to the right place.
International students may have to pay taxes to the Canadian government on the income they’ve earned in Canada through employment, business, teaching or other investments. International students also need to declare all income they’ve received from overseas as well.
The tax system in Canada is not based on citizenship but on residency. This means an international student will have to determine his/her status of residency before filing for a tax return in Canada.
There are certain countries that have entered into a tax treaty with Canada. If you are a student from one of those countries you may not need to pay taxes on the income that you earn in Canada.
With permission from the Canadian Revenue Agency (CRA) international students can request their employers not to withhold taxes from their income.
Tax Filing In Canada For International Students – Quick Facts
- Tax in Canada need to be filed at the Canadian Revenue Agency (CRA)
- A financial year in Canada begins on the 1st of January and ends on the 31st of December
- The deadline for filing taxes in Canada for the financial year of 2018 is on the 30th of April 2019
Determining The Residency Status Of An Individual In Canada
When an individual studying or working in Canada has established residential ties with the country he/she is treated as a resident of that country. International students who fall under this category are eligible for certain benefits like any other citizen of Canada. The benefits include
- Credits on GST
- Rebates on tuitions
- Provincial credits
- Carry-forward credits on tuitions
An individual who lives in Canada for a period less than 183 days in a financial year and who do not have any residential ties with the country is considered as a non-resident.
International students who are considered as non-residents in Canada are not eligible for any benefits and credits enjoyed by the residents. The need to file a tax return is to pay outstanding tax amount or to reclaim if they’ve overpaid the taxes on their Canadian income.
An individual who has stayed in Canada for more than 183 days but does not have residential ties of significance with the country is considered as a deemed resident of Canada.
For the purpose of taxation deemed residents should not be considered as residents of their native country. Both the residents and deemed residents of Canada have to pay taxes to the Canadian government.
Deemed Non- Resident
A person is considered as a deemed non-resident of Canada for the purposes of filing taxes when he/she has established residential ties of significance but is still considered a resident of another nation with whom Canada has entered into a tax treaty with.
If they’ve received income from Canada both deemed non-residents and non-residents have to pay taxes to the government. The income could include wages from employment, income from investment, interests or scholarships that are taxable.
The residency status of international students is determined by the Canadian Revenue Agency. If you are not sure of your residential status it is best to contact the CRA directly to get it cleared for the purpose of filing taxes.
The Canadian Tax System – An Overview
The income tax in Canada is administered by the CRA which is the Canadian Revenue Agency. The financial year in Canada begins on the 1st of January and ends on the 31st of December.
The deadline for filing tax returns in Canada is the 30th of April which is for the previous tax year. Even though late submissions are accepted you will have to pay a penalty.
Deduction Of Taxes Usually Takes Place As Follows
- The employer deducts a percentage of your wages in Canada to pay an income tax
- This money is sent to the Canadian Revenue Agency (CRA).
- The international student employed in Canada needs to fill in the TD-1 form
- This is to ensure that the right amount is deducted from the wages
- The international student has the responsibility to determine the status of his/her income tax and pay the right amount
- The amount deducted from each pay slip goes to the Employment Insurance and the Canada Pension Plan
Tax Filing In Canada For International Students – You Need To File For Taxes If:
- The Canadian Revenue Agency has requested you to file for a tax return
- You earn an income in Canada that is significant enough for you to pay taxes to the government
- You plan to apply for HST/GST credit which is a cash credit given to middle and low-income taxpayers.
- If you are a low or middle-income taxpayer with children who are eligible for a child tax credit
- If you are eligible for a tax refund from the Canadian Government
If an international student in Canada receives income from overseas he/she needs to declare it while filing for taxes. Considering the fact that Canada has tax treaties with several nations the student may or may not have to pay taxes on that income.
Tax Filing In Canada For International Students – Documents Needed
An international student in Canada either needs a Social Insurance Number (SIN) or an Individual Tax Number (ITN) to file for a Canadian tax return.
What Do You Need To Submit To Get A Social Insurance Number?
You require two documents that prove your identity. It could be your
- Original Birth Certificate
- Authorization To Work In Canada
- A work permit
- Or a study permit that shows that you are authorized to work outside your campus
- Or a confirmation that states that you can work off-campus. You are required to submit your study permit along with it.
How Can You Get An Individual Tax Number (ITN)?
- Fill in form T1261
- In the certification section of the form add your signature and the date
- Attach all the supporting documents. It should be original documents, notarized or certified copies of the original documents.
Tax Filing In Canada For International Students – Additional Documents Required
Form T4: An international student needs to collect this form from the employer. This contains all the details regarding the income from the job and the deductions made.
- Form T4A: This indicates all the bursaries and scholarship the international student may have received.
- Form T2202A: All the details of the course fee that was paid during the financial year is mentioned in this document.
- General Tax Forms which you can get from any of the Post Offices in Canada or can find it online.
- Receipts for the expenses incurred
What Can Be Included In Expenses?
International students could qualify for deducting certain types of expenses from the taxes paid in Canada. Some of the deductions that are considered eligible include travel, storage, and transportation of personal things, and temporary accommodation charges.
Contributions made towards the Registered Retirement Savings Plan and expenses for Childcare can also be deducted.
However, if your only income is a fellowship, bursaries or scholarship deduction of moving expenses may not be possible as these are exempt from taxes. Make sure you save all the receipts of relocating to Canada.
Tax Filing In Canada For International Students – Ways To File Tax Returns
File It Online
International students can file for their tax returns in Canada online using electronic tax-filing options. They can do it directly on the Canadian Revenue Agency website.
You can check out a list of certified mobile, desktop, and online software products at canada.ca/netfile-software. However, the first time taxpayers in Canada cannot use this option. They have to submit their tax returns in a paper.
File Tax Returns On Paper
An international student can download and print the income tax and benefit package in Canada online or can get a copy ordered from the Canadian Revenue Agency (CRA).
You need to fill in the form and attach all the required documents and mail it to the CRA before the deadline which is on the 30th of April 2019.
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