Canada's tax system is similar to that of many countries. Employers and other payers usually deduct taxes from the income they pay you, and people with business or rental income normally pay their taxes by installments.
Many of the benefits people enjoy in Canada are made possible through taxes. Canada's tax system pays for healthcare, education, roads, social security, and public safety.
Each year, you determine your tax obligation by completing an income tax and benefit return and sending it to the Canada Revenue Agency (CRA). On the return, you list your income and deductions, calculate federal and provincial tax, and determine if you have a balance of tax owing for the year, or whether you are entitled to a refund of some or all of the tax that was deducted from your income during the year.
Under Canada's tax system, you have the right and the responsibility to determine your income tax status and make sure you pay your required amount of taxes for each year according to the law.
To follow the law in Canada, if you owe taxes and don't file an income tax return, the Canadian Government can impose fines/ penalties or charge interest on unpaid taxes.
Filing taxes also determines your eligibility for government benefits, refunds, credits and to carry forward credits to reduce income tax owed in future years. Common credits international students are eligible for include: tuition tax credit, goods and services tax/ harmonized sales tax (GST/HST) credit, or if you want to begin/ continue receiving the Canada child benefit (CCB) and other benefits from certain provincial related programs.
You must file a tax return if you are a "resident of Canada" for tax purposes and you earn income and owe tax.
Even if you do not owe tax, you may optionally file a tax return if: you want to claim a refund of taxes, you want to apply for social benefits, or you want to carry-forward certain tax credits.
Are you a resident of Canada? You become a resident of Canada for income tax purposes when you establish significant residential ties in Canada (this is different than 'residency' status for immigration purposes). You usually establish these ties on the date you arrive in Canada.
Residential ties may include:
- a home in Canada;
- attending university full-time in Canada;
- a spouse or common-law partner or dependents who move to Canada to live with you;
- personal property, such as a car or furniture;
- economic ties in Canada, such as a Canadian bank account or credit card;
- social ties in Canada.
Unsure about whether you are a resident for tax purposes? Visit this website for more details.
All amounts received by virtue of employment, carrying on a business, or received as a return on an investment are taxable income. Income that is subject to tax includes amounts earned from any country while you are a resident in Canada (world-wide income!).
Non-taxable income includes: scholarships and bursaries, Canada Child Benefit, lottery winnings and money/ gifts from your parents or family members.
You need a Social Insurance Number (SIN) to file a tax return. Your SIN is a nine-digit identification number that is unique, personal and confidential. The CRA uses your SIN to identify you for income tax and benefit purposes. You must give it to anyone who prepares information slips (such as T3, T4, or T5 slips) for you. Each time you do not give it when you are supposed to, you may have to pay a $100 penalty.
If you do not already have a SIN, you can apply for one at the nearest Service Canada office. You will need to take your passport and study permit with you. More information can be found on this website.
If you are ineligible for a SIN, you can apply for an Individual Tax Number (ITN). It usually takes the CRA 4 - 6 weeks to process an ITN so apply early. The application form can be found on this website.
Electronic filing can be used if you are a "resident of Canada for tax purposes", have a SIN starting with 9, and the CRA has your date of birth on record. See this website for more information on filing electronically.
If you can't file electronically, you can still use the software, then print and send your return to:
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury, ON, P3A 5C2
Other ways to file:
- UTMSU offers free tax clinics for students
- Hire an accountant or a tax lawyer
- Community Organizations and Community Volunteer Income Tax Program
Generally, your income tax return has to be filed on or before April 30 of each year. If you owe tax and you file your tax return late, the CRA will charge you a late-filing penalty and interest on any unpaid amounts. If you don't owe tax, you can file late and you can file for the past three years.
Important correspondence from the CRA will come 4 - 6 weeks after filing your taxes, so ensure that your mailing address is correct/ accurate. Don't know where you'll be moving in the summer months? Ask a trusted friend or family member with a permanent address if you can use their mailing address temporarily.
Call the CRA toll free at 1-800-959-8281
Be aware of scams! They increase around tax time.
The CRA will not do the following:
- send you an email with a link and ask you to share personal or financial information;
- ask for personal information of any kind by email or text message;
- leave personal information in a voicemail.