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You become a Canadian tax resident when you settle here, and from then on you're taxed on your income from all over the world. File by April 30, apply for the GST/HST credit and child benefit, and report foreign property over $100,000.
Moving countries means leaving one tax system and learning another, and the first year is the hardest. The good news is that Canada’s rules start from one simple idea: residency.
When do you become a resident?
Tax residency here depends on your ties to Canada, not your visa or your passport. A home, a spouse or children who live with you, and your belongings all count. Smaller ties, like a bank account, a driver’s licence or provincial health coverage, add weight too. Most people who arrive to settle become residents on their arrival date. If you’re unsure, the CRA has a form to ask for its opinion. The CRA’s page for newcomers lists the ties it looks at.
From that date you’re taxed on your income from all over the world. Before it, you only owe tax on Canadian income.
What does your first return look like?
You file by April 30 of the next year, like everyone else. You’ll need a Social Insurance Number, and your slips from the months you worked here. Income earned abroad after your arrival goes on the return too, converted into Canadian dollars with an exchange rate. The rates page shows today’s Bank of Canada figures, but for a past date you’ll want the rate on that day. The CRA’s newcomer page says to use the Bank of Canada rate in effect on the date you received the income.
You may also be able to claim a credit for tax you already paid to another country, so you aren’t taxed twice on the same money. Some credits are prorated for the part of the year you lived here. Don’t worry about guessing: the CRA’s guide for newcomers explains each one.
What benefits can you apply for?
New residents can apply for the GST/HST credit and, with children, the Canada Child Benefit, using their own forms, even before filing a first return. Both are worked out from your tax return, so even a year with no income is worth filing. The Canada Child Benefit is tax-free. Estimate them with the GST/HST credit calculator and the child benefit calculator.
What about savings accounts and foreign property?
TFSA room starts building from the year you become a resident and turn 18, so years you spent abroad don’t add room. Try the TFSA calculator once you’re settled. If the cost of your foreign property, such as a bank account or shares held outside Canada, was over $100,000 at any time, you must file an extra form. A few bucks in an overseas chequing account won’t trigger it, but a house or a pile of shares back home might, so check before the deadline.
What mistakes do newcomers make most?
Skipping the first return because there was little income is the big one, since it can delay benefits. Another is using today’s exchange rate for old income. Keep your arrival date, your foreign slips and a note of the rates you used, and the next year gets much easier.
Where do you start?
Learn the basics in the guide to how Canadian taxes work, work out your pay with the take-home pay calculator, then read the filing guide.
Before you act on this page
You’re reading a general overview, and it can’t see your slips, your status or your province, so you shouldn’t treat it as advice for your own return. If anything here doesn’t match a letter from the CRA, the letter wins.
Stuck?
Ask a qualified preparer or the CRA itself, and keep the document checklist, the tax calendar and the filing guide close by. Not sure which province’s rules apply to you? The province index lists them all.
Frequently asked questions
When do I become a tax resident?
When you establish significant ties to Canada, such as a home, a spouse or dependants, and your belongings here. For most people that is the day they arrive to settle.
Do I report income from before I arrived?
Not as Canadian income. Once you are a resident you are taxed on your world income from that date, and you report it in Canadian dollars.
Should I file even if I had no income?
Usually yes. Filing is what lets the CRA work out benefits like the Canada Child Benefit and the GST/HST credit.
Do I need to report foreign property?
If the total cost of your specified foreign property was more than $100,000 at any time in the year, you file a separate form with your return.