You probably already know that Canada is the second-largest country in the world…and home to the beaver, the Royal Canadian Mounted Police, maple syrup, and the French-Canadian delicacy known as poutine. Sorry, almost forgot to add ice hockey. Actually you’ve probably heard that Canadians have a habit of saying “sorry” a lot, too! All in all, Canada is a great and diverse country, as unique as the many people who come to call it home.
The high quality of life in Canada is the result of our social programs and services, like maintained roads, public transit, public utilities, schools, employment insurance, pension plan, and health care. Canadians and residents alike can make use of these programs, which they support through the taxes they pay on their income. As a Canadian resident, you may be eligible to receive certain benefits, but you also have a responsibility to report your income and pay your fair share of taxes. It’s important that you understand what your rights, entitlements, and obligations are under Canada’s tax system.
How does the system work? First of all, you are responsible for figuring out if you owe any tax, and how much. This means you may have to fill out and send to the Canada Revenue Agency (CRA) a form—called an income tax and benefit return—every year. Filling out the form will tell you how much tax you owe or whether you might get back some of the taxes you’ve already paid as a refund.
If you are a resident of Canada, you must pay income tax. In most cases, you become a resident of Canada on the date you arrive and set up ties to Canada, such as having a home and a spouse living here. If you’re a resident of Canada, you pay taxes on all of the income you earn, even if it has been earned outside of Canada.
You should fill out and send in an income tax and benefit return every year, even if you have not earned any income. When you send in a return, the CRA will review it and will tell you if there are benefits you may be able to get, such as a credit for the Goods and Services Tax or Harmonized Sales Tax that you have paid.
The deadline to file most Canadian income tax and benefit returns for 2015 is April 30, 2016. However, since this date is a Saturday, the CRA will consider your return as filed on time and your payment to be made on time if it receives your submission or it is postmarked by midnight on May 2, 2016. Self-employed individuals and their spouses or common-law partners have until June 15, 2016, to file their income tax and benefit returns, but any balance owing is still due no later than May 2, 2016. This means, to report any income you’ve earned in 2015, or to receive credits like the GST/HST credit, you need to file your return by the deadline.
Since tax rates and credits are not the same in every province and territory, it’s also important to use the correct forms for the province or territory you live in. To decide which forms you should use, choose the ones for the province or territory in which you lived in on December 31st of the tax year.
More taxpayers are choosing to go paperless and file their tax return online. And if you’re entitled to a refund, you can enjoy your money in as little as eight business days if you combine online filing with direct deposit. If you’re a benefit or credit recipient, direct deposit is the quickest way to get your payments. For more information, go to www.cra.gc.ca/directdeposit.
As tax season approaches, be cautious of phishing or other fraudulent scams that could lead to identity or financial theft. The CRA will not send an email with a link, ask for personal or financial information of any kind by email or text message, or ask for payments by prepaid credit cards. Visit www.cra.gc.ca/fraudprevention for examples of current scams and for information on how to detect and avoid them. If you receive a call saying you owe money to the CRA, you can check My Account to be sure.
Adjusting to a new set of tax rules and requirements can feel overwhelming. The CRA is here to help! To get more detailed information, go to www.cra.gc.ca/newcomers. You can also check out the “newcomers to Canada and the Canadian tax system” video series online at www.cra.gc.ca/videogallery.
If you have a modest income, and a simple tax situation, you can also contact the Community Volunteer Income Tax Program, where community organizations host free volunteer tax clinics across the country. To find a volunteer tax preparation clinic near you, go to www.cra.gc.ca/volunteer.
Still have questions? Call 1-800-959-8281 to reach a CRA agent who will help answer your tax-related questions.
Don’t miss the latest CRA news or tax tips—follow the CRA on Twitter: @CanRevAgency