Thanks for your detailed response! I am also no expert in tax matters and I might very well be wrong (wouldn't be the first time), but do you have any source for what you suggest?
I think what you are saying is this:
If someone had only a single T4-style job, they still have to file taxes even if they thing they don't owe taxes and/or would be entitled to a refund.
Whereas I think:
You only have to file taxes if you actually owe taxes (i.e. the tax the CRA is entitled to is MORE than what already has been deducted on your T4s).
Or in other words: If your "hypothetical tax owing line" is negative, you don't have to file.
Why I think that I am right (but again, I might very well misread things) is, for example this guide that writes something similar to many other guides:
https://youngandthrifty.ca/tax-season-canada-2019/
Quote:
"Do You Need to File Taxes in Canada 2019?
Technically, you only have to file your taxes if you owe money to the government. That said, it’s still good practice to file your taxes every year for two main reasons.
First, if you don’t owe money, there’s a chance you’ll receive a refund from the government. This money can be put to good use bettering your finances."
As an aside to be clear: we of course both agree that it is just stupid from a money perspective not to claim your refund. We only seem to have different interpretations regarding the question if there is a legal requirement to do so.
To be clear: the disagreement is about the meaning of "you have to pay tax for [tax year xxxx]."
Short version of the disagreement:
-- If you have no outstanding tax balance due because all tax due was fully paid by employer withholding, that means it is NOT the case ""you have to pay tax for [tax year xxxx]." No obligation to file a return.
-- VERSUS --
-- If you have income for which any tax is due, that means"you have to pay tax for [tax year xxxx]" EVEN IF there is NO outstanding balance due because the tax was fully paid by employer withholding. Thus, there is an obligation to file a return.
My view is obviously the latter. Which should easily be illuminated by what is no more than a tautology: If there is a tax obligation incurred during the year there is a tax obligation for that year.
The other view parses the tense in a general description to limit its meaning to an outstanding debt.
Wandering Into Weeds And Repetition:
You appear to stand behind an interpretation which concludes an individual is NOT someone who has "to pay tax for [tax year xxxx]" so long as any tax for income during the year has already been fully paid . . . perhaps limiting this to fully paid by employer withholding (as opposed to paid by quarterly installments during the tax year, or other credits).
To my view there is NO DOUBT: if there is any tax due for income in a given tax year, that means "you have to pay tax for [tax year xxxx]." And how or when the tax is paid is NOT relevant in determining if there is an obligation to file. That is, how the tax is paid cannot negate the fact that a tax is due for the income. Even if the tax has already been paid in full. By employer withholding or otherwise.
Thus, if any tax is due for a given tax year, there is an obligation to file a return. That is the baseline trigger. (Apart from any other fact or circumstance triggering an obligation to file, and in addition to when it is nonetheless wise to file even if filing is not required.) Almost everyone who receives any income owes some tax on that income, thus hitting the baseline criteria of having to pay some tax for the year, and thus is obligated to file a return.
Thus, as I tried to say in my previous post, and again I realize that I am NOT fluent explaining tax matters, it is clear you are conflating having to pay a tax with owing an OUTSTANDING balance for tax obligations. And this applies to how, it appears, you have interpreted: "
Technically, you only have to file your taxes if you owe money to the government." This statement, to be clear, is true, meaning
if there is any tax due for the tax year. Not just if there is still an outstanding balance due.
Stated yet another way: The fact that an individual has credits totaling enough to fully cover the amount due, including credits based on employer withholding, or installment payments made, or other credits,
does not negate the tax obligation, it merely SATISFIES (pays) the tax obligation. That is, if what the employer withheld is equal to or more than the TAX OWED, the tax obligation is paid.
I recognize you may or even probably still disagree. After all, all I have offered is slightly different ways of stating the same thing.
There are many other informational sites online which, like the CRA information and the tax guidance site you cite, similarly state the baseline criteria. Occasionally some explicitly note that if an individual received any income (some say "any at all"), there will be a tax owed, which means there is an obligation to file a return. But these sites tend to be no more authoritative than the YoungandThrifty site you quote or are populated by user/participant responses (subject to similar reliability limitations as this forum), such as
https://money.stackexchange.com/questions/44504/do-i-have-to-file-taxes-in-canada-if-no-income . . . for example, the response posted at the latter site states:
Now, if you receive any income at all, you are going to have to pay taxes, which means you are obligated to file a tax return. If sufficient taxes were deducted from your paycheque, you are still obligated to file a tax return.
Which is my understanding except I am not sure about the "any income at all" (I'm typically inclined to expect some exceptions to any rules not absolute on their face). And again recognizing that is a user answer and not an authoritative (let alone official) source.
For those who insist that
if employer withholding fully covers any tax owed for the year then there is no tax owed for the year, history strongly suggests they will not be persuaded differently.
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The fact that under the Canadian tax system it is especially disadvantageous to not file a return EVEN if one is not obligated to file a return, is no mere aside. At the least it tends to set apart and make more obvious those who do not file, making it easier for CRA AND OTHER government agencies (including IRCC) to identify potential scofflaws (which is what I think
@zardoz was referencing even though erroneously commenting that just being a tax-resident requires filing a tax return).
IN ANY EVENT, I strongly think that prospective applicants should make no mistake: if an applicant checks "NO" not required to file, AND "NO" did not file, for years the applicant's work history shows employment in Canada, that is bound to raise a red flag . . . and if one or more such years are necessary to meet the requirement to have complied with tax filing obligations for three of the five preceding tax years, that is likely to do worse than merely raise a red flag and could have a negative impact on the outcome of the application (which if so, this cannot be cured after the application is made, since the applicant needed to have met the tax filing obligations for three of the preceding five tax years as of when the application was made; a new application would have to be made).
And I agree with what I think was the point of
@zardoz's caution (despite overstating the obligation to file), that there is some risk of elevated scrutiny if an applicant does not file a return for years the applicant has been resident in Canada (how much so is obviously likely to vary; not so much if not at all employed that year; perhaps not so much if it is just one of the five tax years; more so if in conjunction with other factors suggesting reasons-to-question-presence).
