First Tax Declaration

[kosta]

Hi All,

The question is, a newcomer landed in Canada in the end of 2010 must declare 2010 incomes by April 2011. Should it be the income after landing (only in Canada) or the income prior to landing in other countries must be also included in the first declaration?


Another question related to the first one: what about Children Benefits? Claim for these benefits should be accompanied by a document where the newcomer is supposed to declare previous two years income in other countries. If this income is high, does it mean there will be no Child Benefit at all?

 

[cheguevera]

Hi,

1.You will have to file a tax by April 2011 for all the income you received in 2010 (in Canada and abroad). Depending on the country of origin and if you paid tax there or not, your income there will be tax deductible.
2. When you fill the application for child benefit, there will be a section where you must declare your income for the previous years. Depending of this, you will or not receive the child benefits.

cheers

 

[Jonboy]

Hi,

1.You will have to file a tax by April 2011 for all the income you received in 2010 (in Canada and abroad).

But only from the date you became tax resident in Canada. This is usually the date you moved here to live.

 

[kosta]

Thank you, guys! As I can see, my income in 2010 before becoming a Canadian residence won't be taxed. It makes sense, just wanted to be sure.

 

[cheguevera]

Hi Jonboy,

Thank you for the comment.
Are you saying that if someone come to Canada in May 01, 2010, he/she will not have to declare the incomes received in previous months?

Thanks again

 

[Jonboy]

Hi Jonboy,

Thank you for the comment.
Are you saying that if someone come to Canada in May 01, 2010, he/she will not have to declare the incomes received in previous months?

Thanks again

Yes. The key question is when do you become tax resident in Canada. This is usually the day you (and/or your family if you have one) move here to live. There can be other complexities in making this determination but it usually also coincides with you applying for a provincial health care plan and all the other things that indicate the Canada is now your home.

Before you become tax resident in Canada you only have to pay tax in Canada on Canadian sourced income. For example, dividends on Canadian shares, or business income if you have a business establishment in Canada. Once you become tax resident in Canada your world-wide income is taxed here. You do get credit for foreign income taxes paid on income that is also taxable in Canada.

For example at January 1, 2010 a family lives in India but the husband works most of the year in Dubai. They have made some money over the years and this is held in a deposit account in London UK. They have applied for, and received, permanent residency in Canada. On February 1, 2010 they "land" in Canada to activate their visas. After a few days in which they apply for SINs, and open a bank account and arrange to rent a house later in the year they return to India/Dubai.

There is no change in tax status at this time. The family's earnings in India, Dubai or the UK are of no concern to the Canadian government.

On May 1, 2010 the wife and children move to Canada and start to live in the house they had arranged earlier in the year. At this point the wife has become a tax resident of Canada. So has the husband, even if he stays in Dubai. His family live in Canada and he has a home available to him in Canada so he is considered a tax resident here. From May 01 onwards the husband's earnings in Dubai, and the interest the family earn on the deposit in London, count as taxable income in Canada.

The only time the Canadian government need to know anything about income or earnings before May 1, 2010 is if the family applies for child tax credit. This is calculated on the family's earnings in previous years. Even though you will need to tell the government about earnings prior to May 1, 2010 they are still not taxable in Canada.

 

[cheguevera]

Thank you for the thorough explanation.

 

[rubyalabar]

Hi Jonboy,

I posted a new topic but I 'm not sure if you'll notice it. I was told you can provide the most accurate answer regarding my situation...

Hi! I just want to ask if I should file a tax return... Here's a bit of info about me...

My husband has been in Canada since 2008 so there's no question, he has to file a tax return for 2010.

As for me, I arrived in Canada on February 4, 2011. I did not work back in my home country in 2010 since I was taking care of our daughter full time. Now, when I got my SIN at Service Canada they told me to apply and send in the forms for GST/HST credit as well as CCTB & UCCB. When I called CRA to follow up aftwr 3 weeks they could not give me an answer and when I gave them my SIN I was told it's still not active because I have not filed a tax return yet.

So I called the International Tax Service Office of the CRA in Ontario, I was told to file a return even if the income is zero and I just arrived in 2011.

What confuses me is that the forms that they told me to use only apply to those who are IN CANADA as of December 31, 2010. DOES ANYONE KNOW WHAT I SHOULD DO?

 

[agrisiva]

hi rubyalabar,

if your husband was a resident of Canada for Tax purposes, don't you automatically become a resident whether you were living inside or outside Canada for that year, and thus become obligated to file your return? Is my understanding of tax law incorrect?

 

[steaky]

No, I heard there are exceptions.

 

[New Ontarian]

Hi,

I have landed in Ontario last year and had to come back to complete some unfinished business... I shall move to Canada permanently towards the end of the year. However, I've got some points that i hope you would be able to clarify...

1. Despite the fact that I have opened a bank account when I first landed in Canada, I didn't transfer my savings into that account. As my intention is to move to Canada for good I shall transfer all my savings into the Canadian account. The question is would I have to declare this transfer to anyone in Canada? Is the amount taxable?

2. I do trade stocks and foreign exchange on daily basis and looking for this to be my day job in Canada... I would be working from home. The question is, how would I prove my physical availability in Canada if I am working from home with no interaction with customers except my broker in the US?

3. Do you have any idea about the taxation percentage for gains realized out of investments?

4. I do hold a foreign investment account in the US, do I have to declare it to avoid taxation in case I want to withdraw my equity?

I tried to search for information online but unfirtunatiky wasn't very successful.. I wish that you would be able to assist or direct me to the right resources.

Thanks and regar...

 

[me2land]

Hi,

I have landed in Ontario last year and had to come back to complete some unfinished business... I shall move to Canada permanently towards the end of the year. However, I've got some points that i hope you would be able to clarify...

1. Despite the fact that I have opened a bank account when I first landed in Canada, I didn't transfer my savings into that account. As my intention is to move to Canada for good I shall transfer all my savings into the Canadian account. The question is would I have to declare this transfer to anyone in Canada? Is the amount taxable?

2. I do trade stocks and foreign exchange on daily basis and looking for this to be my day job in Canada... I would be working from home. The question is, how would I prove my physical availability in Canada if I am working from home with no interaction with customers except my broker in the US?

3. Do you have any idea about the taxation percentage for gains realized out of investments?

4. I do hold a foreign investment account in the US, do I have to declare it to avoid taxation in case I want to withdraw my equity?

I tried to search for information online but unfirtunatiky wasn't very successful.. I wish that you would be able to assist or direct me to the right resources.

Thanks and regar...

1. If it's more than $10K you will declare at the border. That's that and no taxes.

2. When you need to prove your physical presence, you can provide your home bills, OHIP card .... etc

3. It depends. Unlike the US where there is a fixed capital gains tax, In Canada Only 50% of capital gains are taxed and at your current marginal rate.

4. No need to declare, if you get audited by CRA you can always prove the life of your investments. Your capital gains in the US will still be taxed.

¬m2l

 

[New Ontarian]

1. If it's more than $10K you will declare at the border. That's that and no taxes.
¬m2l

Thanks... I landed last year and didn't transfer my savings at that time... I am moving to Canada for good now... Is what ia am transferring now taxable?

 

[PMM]

Hi

Thanks... I landed last year and didn't transfer my savings at that time... I am moving to Canada for good now... Is what ia am transferring now taxable?

No

 

[CharlotteJ]

I am subject to tax deduction over 2010 and I asked this lovely gentleman who was living close to my address to fill out my tax papers etc.

But I wonder why they deduct such in 4 terms? I was told I will receive so much now, then so much at the end of each quarter.

I paid $50 to have my taxes being done and all. Canadian tax system is a bit complicated and one should know how it works as to be deducted. Try to always inform yourself properly prior doing so and especially in the first year or two you live in Canada. Ok?