Some facts about non-residents tax filing in Canada
Are you a non resident of Canada looking for tax filing solutions? If so then you would know that there are various aspects about filing your tax returns as a non resident in Canada. You must have a clear conception about the same. It is only the expert in the field who can help you understand and also at the same time would do it correctly for you. We at The Accounting and Tax are experts in matters pertaining to tax and accounting solutions to both individuals as well as corporate. We have been providing solutions in the field in Canada and USA since 2001. In this blog we will try to make you aware about tax filing for non residents in Canada. Let us first of all try and understand what the Non Resident status is in Canada.
Non Resident Status
If you normally live in another country, you would automatically be a non-resident of Canada. It is also possible that you live partly in Canada and partly in another country. In such a case, you would be considered a non-resident as long as you live in Canada for less than 183 days of the year and at the same time have no significant residential ties to the area.
If you spend 182 days in Canada and have few ties to the area, you would most be considered a non-resident. On the other hand if you spend 182 days in Canada but have a spouse, a home and a car in the country, you may be considered a resident. But it is always advisable to contact CRA before you file your tax returns to confirm you are declaring the right status.
Categories of Taxes for Non Resident Canadians:
Part I Tax
If you have a business or earn from a job in Canada then your income therefrom is subject to Part I tax. The Canadian Scholarships and research grants which are paid also are subject to this category of Tax in Canada. Even the income derived from sale of a property in Canada also becomes subject to this tax. You would note that Part I taxes are in most cases held at the source by the payer. However at the year end the tax payable may vary based on certain other factors. You need to file your tax returns based on these payments.
Part VIII Tax
This type of tax is payable on incomes which are received on account of rent, old age pensions, retirement income benefits and annuity payments. In most cases the incomes under this category are taxed at the rate of 25% and are non refundable. However Old age security payments are an exception to this rule.
OAS and Recovery Taxes
As a non resident you may be receiving Old Age Security (OAS). In such a case you must file the OAS return of income. This does not calculate your income tax but calculates your recovery tax. For those who fall in the category of the high income pensioners they may have to pay some of the recovery tax.
Filing of tax returns for non residents in Canada
If you are a non resident Canadian you have to file a special tax return file Form 5013- R T1 (Income Tax and Benefit Return for Non-Residents and Deemed Residents of Canada). Most tax filers under this category mention their social insurance numbers on these forms. If you do not have one then you have to obtain an Individual Tax Number. This is to be done using form T1261.
In conclusion we hope we have been able to provide you a fair idea about tax filing in Canada for non residents. In case you are looking for a personal tax consultant in Canada, please get in touch with us.
