Tax Obligations of a Newcomer

You are considered a newcomer in Canada for tax purposes if you are on your first year as a new resident of Canada.  After your first tax year, you are no longer considered a newcomer.

You become a resident of Canada for income tax purposes when you establish significant residential ties (please see previous blog for more details on residential ties), usually on the date you arrive in Canada.

Newcomers who have established residential ties with Canada may be:

  • Persons in need of protection

  • People who have applied for or received permanent resident status from Citizenship and Immigration Canada

  • People who have received approval-in-principle from Citizenship and Immigration Canada, to stay in Canada.

If you are re-establishing your Canadian residency, you will be considered a Canadian resident when you move back to Canada and re-establish your residential ties.

Once you have confirmed your residency status in Canada, your tax obligations begin.  As a resident of Canada, you:

  • Must report “world income” including income from all sources both inside and outside Canada on your Canadian income tax return

  • Must ensure that you pay the correct amount of taxes according to the law

  • Must file your income tax return on or before April 30 of the year after the tax year or June 15 of the year after the tax year if  you or your spouse or common-law partner carried a business in Canada

  • Must use the General Income Tax and Benefit Guide and the forms book for the province or territory where you live on December 31st of the tax year

  • Have the right and responsibility to verify your income tax status each year

  • Can claim all deductions, non-refundable tax credits and refundable federal, provincial or territorial credits that apply to you.

Another important information that newcomers should know is that most residents in Canada file only one personal income tax return for each tax year because the Canadian government collects taxes on behalf of all provinces and territories except the Province of Quebec.

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