How do I file my tax return in Canada?

Do you need help filling out a tax return in Canada? When you work, you pay taxes and Canada is no exception, even if you have an International Experience Canada (IEC) permit.

Talentech is an international recruitment agency in Canada. Our mission, in addition to helping Canadian employers with the hiring of qualified talent from abroad, is to offer personalized support to facilitate the integration of these candidates in their company and in their new country of residence.

This article will familiarize you with Canadian taxes and the different ways to file your return.

Canadian Tax Basics

Canadian tax returns are filed for the previous year, from January 1 to December 31. For example, if you worked in Canada in 2022, you will have to file your return in 2023. If you worked in both years, you will have to file two separate returns.

Temporary residents also pay taxes. Also, it is good to know that each return is individual. For example, a couple files two separate returns.

Who has to file a tax return in Canada?

Wondering if you have to file a Canadian tax return? The short answer: yes. There are very few exceptions for filing taxes in Canada, whether you worked or not. 

Furthermore, Canadian residency status has no bearing on whether you have to file a tax return. Its only influence will be in how you file your own return. Your status only affects what you have to report and your eligibility for certain tax deductions or credits. As soon as you meet one of the CRA's criteria, it is to your advantage to file your tax return.

Benefits of filing taxes in Canada

Finally, even if you are not obliged to do so, it is advantageous to file a tax return in Canada. It allows, among other things, to:

• Request a refund
• Be eligible for certain federal or provincial benefit programs
• Contribute to an RRSP
• Applying for the Canada Labour Market Development Agreement (CLMA) or the Canada Child Tax Benefit (CCTB)
• Receive the Guaranteed Income Supplement (GIS) or Old Age Security (OAS) benefits

When to file your Canadian tax return?

The deadline for filing the annual return is April 30 of each year. After this date, additional fees will apply.

List of documents required to file a Canadian tax return

As soon as a worker receives income in Canada, he or she must file a tax return. Here is the list of documents to file a tax return:

• T4 income document. This paper document provided by the employer summarizes the amounts paid as well as the taxes that were deducted at source. The T4 is a document similar to the December pay slip in France. For work in Quebec, this document will also be accompanied by the Relevé 1. Please note that if you have had several employers, it is crucial to collect all T4s and Relevé 1s from these employers.
• Proof of payment of your health insurance premiums and additional statements regarding your unreimbursed medical expenses . Some of these documents may qualify you for certain deductions.
• Documents for the declaration of rental properties. If you own real estate in France, you will need the documents to declare the rental income. There is an agreement to avoid being taxed twice. Do not hesitate to consult an accountant or an experienced tax specialist to help you.

It is also worth noting that these documents are also valid for young professionals or any other person who holds a Canadian temporary work visa.

How do I file my tax return in Canada?

There are three ways for non-Canadians to file their tax return in Canada.

Using an accountant for your Canadian tax return

Using the services of an accountant or tax professional is, without a doubt, the most efficient way to file an individual tax return. The expertise of an accountant ensures that no detail is overlooked and that your return is filed in a timely manner. For straightforward returns that comply with the latest CRA changes and updates, it is best to leave this work to a professional accountant.

In addition, the complexity of certain aspects makes the declaration of income difficult for foreign professionals. For example, the accuracy of the tax status or the Canadian residency status, to avoid double taxation in France and Canada.

These professional services are obviously not free - although the cost is still modest. However, hiring a professional tax advisor offers unparalleled peace of mind. For some young foreign professionals, this is the only way to ensure that they file a compliant return.

Using certified tax software

Did you know that you can use software certified by the Canada Revenue Agency (CRA) to file your taxes in Canada? There are several software programs that allow you to file your taxes yourself, such as Impôtnet or ReTransmettre.

In addition to CRA-certified software, there are a number of other software programs such as Taxback to complete your joint return. 

These programs usually include a user's guide to help you complete your tax returns correctly. However, if you have any doubts, we advise you to contact the CRA directly. Also, do not hesitate to consult the FAQ available on their website.

Do your Canadian tax return yourself

If you don't like the idea of hiring an accountant or putting this personal information into software, you can always do your own taxes. There are many resources available online through the Canada Revenue Agency website, including the Tax Kit. This kit includes everything you need to complete a paper return and mail it to Canada Post.

For more information, we invite you to consult the income tax section of the Canadian government website 

After filing your Canadian tax return 

If you have a TFSA, HBP or LLP, you can keep it and continue to benefit from the tax-free status of investment earnings and withdrawals. However, you will not be able to make contributions to your TFSA. You will also not be able to accumulate contribution room.

How do I receive my reimbursements?

You may be entitled to a refund for an overpayment to the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP). 

For those who did not reside in Quebec, go to line 44800 on the tax return - CPP overpayment. If you were a resident of Quebec, the CPP or QPP overpayment is refunded or reduced by the amount you owe based on your Canadian tax return. The time frame for the refund varies.

Please note that tuition fees and moving expenses outside of Canada are generally not refundable.

How do you pay if you owe the CRA?

After leaving Canada, if you continue to receive certain income from a Canadian source, Canadian payers must withhold non-resident tax from that income and remit it to the CRA. This is your tax obligation to Canada. You can, however, choose whether or not to include this income on your tax returns.

How do I file my Canadian tax return once I've left Canada for good?

The initial tax return is slightly different from the usual tax return. Here are the steps to follow for your final Canadian tax return.

Before leaving Canada

If you plan to leave Canada forever, you will still be required to file an income tax return by April 30th of the year following your departure. Unlike the traditional Canadian tax return, this final return has 4 purposes.

• Submit an inventory of your possessions upon departure from Canada
• File your return and pay your departure tax
• The entry of a departure date in your file that attests to the change in your tax residence status
• Preparation of tax election forms (Information on your spouse or common-law partner, tax deduction or credit, tax refund applications, calculation forms, etc.)

You may also choose to defer payment of taxes by providing sufficient security to the CRA.

Talentech Tip: Take the CRA's Canadian Tax Return Course

In order to help you in your efforts, the page Understanding your taxes, set up by the CRA, will allow you to better understand : 

• The basics of income tax
• Your rights
• The right way to complete your return.

We wish you the best of luck in your endeavors! 💪

If you would like to have more information on the different aspects of practical life in Canada and Quebec, do not hesitate to visit our blog.

You will find an article on bank accounts in Quebec or onhealth insurance, which is mandatory when you come to work in Canada with the International Experience Canada permit.