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Tax Education for Canada New Work Visa Holders.

Tax Education for Canada New Work Visa Holders.

 

The first thing to realize is that the Canadian tax system still expects you to fill out forms declaring taxable earnings. In many countries correcting overpaying and underpaying your tax is done automatically. This is not the case in Canada, forms must be filled in.

 

Tax Year

 

In Canada, the tax year runs from January through to December. Your pay slips could well show tax being deducted. You will need to keep these for reference. You will need to check as well that the correct amount of tax has been paid. The tax season usually starts every February. This covers the previous year. For example, the tax you owe in 2022, will be paid in February 2023. The deadline will be the end of April. If you still owe taxes, and you have not declared them, after this date, you could be liable for a penalty.

 

Refunds

 

There are a few things to take into consideration. You will not get a 100% tax refund. Even though, if you are on a Canadian working holiday, and you are not eligible for Canadian Employment Insurance (EI) and a Canadian Pension Plan (CPP), these will be deducted from your pay.

 

T4

 

The T4 is an information slip. This will show a summary of the money you have earned, along with the taxes you have paid in. There is a legal obligation, in Canada, for your employer to supply you with this T4 summary. You must have this in order to fill out your tax form. This should get to you by the end of February. This can be sent to you, by your employer, either by email or post.

If you leave Canada at an earlier point in the year, you will have to wait for the same date to file your Canadian taxation.

There are ways of getting refunds, even if you leave Canada early in the tax year. The T4 will be needed as well as filling out your tax forms. These refunds can be work-related, medical and transportation costs.

 

Completing the Process

 

Forms can be downloaded from various sources online. The official agency is the Canadian Revenue Agency CRA. There is an official website, NETFILE, set up by the CRA, where the whole process of filling out your tax returns, can be done online.

You can buy and download software that can do a lot of this for you. This can cost between CAD$15 to CAD$20. This can do the calculations for you, then you download the forms. The cheaper software is usually restricted to one user, so you cannot share this software around. You need to be very clear as well, about what your residency status is.


Are you applying as a resident or non-resident?

 

Forms can also be posted. You can readily find forms from Canadian Post and Service Canada offices. These can then be posted. Using legal Companies and Accountants to Help You. This might be an option, but legal companies may not have enough experience in this work and may not consider doing it. Given they may not have much experience with working holiday tax returns. Costs start from $50 CAD upwards.

There are internal tax specialist companies in Canada, who will do all the work for you.

There are international options as well. If you are from Australia and you have undertaken a working holiday in Canada. This company will give you a free estimate and then charge a fee depending on the work there is. They will also help you with getting back refunds.

 

Quebec a Special Case

 

All the other provinces and territories in Canada work under the same general federal tax system. However, Quebec has its own system. The provincial government collects its own taxation. This comes under the Ministere du Revenu du Quebec. Those of you in Quebec Province who say working there or in Montreal will have to check out their systems. They will more than likely parallel the general Federal systems.

 

Some Technical Points: Resident or Non-Resident.

 

If you are on a short-term working visa for a year or two, it is highly likely that you will be classified as a non-resident in Canada. This applies if you are a resident somewhere else. You do not have “sufficient ties” to Canada. However, if you have worked in Canada for more than 183 tax days, you might be considered a resident. A resident in Canada is classified as someone who owns and rents a property, has a spouse or partner, and has dependent children. You have a permanent job, own a car, etc., and have Canadian health insurance. Plus, a Canadian passport and or a Canadian driver’s license.

 

So, it is highly likely, therefore, that if you are undertaking a working visa and job in Canada, you are a non-resident.

 

Requirements if you are non-resident

 

As a non-resident, you would be expected to fill out a form which is “Income Tax and Benefit Return of Non-Residents and Deemed Residents of Canada.”

 

Added to this you will need an ITN number, this is an Individual Tax Number, for anyone without a social security number.


There are various ways of getting this online. The best way is to apply via the official Canadian Website for a “T1261 Canadian Revenue Agency Individual Tax Number (ITN) for Non-Residents.”

 

Conclusion

You will need the help of a good agency to help you with all of this. If you to keep an eye on the date.

Keep all your pay slips. You must make sure you get a T4 form from your employer when you make your tax return. Sort out an ITN number. If you are in Quebec province, investigate the systems there. Again, there are international as well as Canadian agencies that can help you fill out the tax return. See if you are eligible for any tax refunds. A good agency should be able to deal with this. This should not be too difficult. Get good outside help and be systematic about all of this and there should be no problems.

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