Different tax credits in Canada that non-citizen residents need to know
Every nation defines non-residency uniquely and therefore before we get into the details of tax credits, let us first determine Canadian non residency.
Canadian non-residency is a distinct category introduced by the Canadian Revenue Agency (CRA) for tax purposes. As per the Canadian Revenue Agency, individuals who “customarily” or “routinely” live outside the country are defined as Canadian non-residents. Some other factors play a major role in defining Canadian non-residency as well. For instance, if you are lacking a significant address proof in Canada but have lived in the country for less than 183 days in a financial year, you will be considered a Canadian non-resident.
Now, what are the tax credits you as a Canadian non-resident are eligible for? The best option to get a thorough idea of this matter is always to get in touch with tax consultants in Toronto. In this article, we will introduce you to the major points.
What are the tax credits you can avail of as a Canadian non-resident?
As a Canadian non-resident, you should pay taxes on the income you have earned in Canada. For instance, if you are a Canadian non-resident and you have an overseas income, the latter does not come into the calculation of the annual tax. The only component evaluated for the annual tax is the amount you earn in Canada. This could surely be a sigh of relief, but we insist you get in touch with the international tax consultancy service in Toronto to make sure that there is no discrepancy or breach of the regulations.
The second most important aspect that you should be aware of as a Canadian non-resident is the withholding tax.
What is a withholding tax?
A Canadian non-resident has been levied a withholding tax of 25% on certain predetermined incomes that include:
- Rental payments
- OAS system
- Dividends
- RRSP payments
- Pensions
If you are owning a house in Canada as a Canadian non-resident, you may not be entitled to capital gain exemption on the sale of your property.
The crucial thing for you is to know the exact determinants which categorize Canadian non-residency. The line is fine between Canadian residency and non-residency and a slight error of judgement could lead you to dire consequences. We would recommend you to contact expats Tax Consultants in Toronto to stay away from the ways of harm!
