If you’re a newcomer in Canada or have returned to Canada after spending an extended period outside the country, you may be required to file an income tax return. Canadian taxes like every other developed country depends on your province and you’re earning.
Taxes are enjoyed by everybody and it is compulsory that all taxes are paid. Citizens often enjoy these taxes in the health care sector. It technically falls under the jurisdiction of the provincial governments. For this reason, when you become a Canadian citizen your health care will be issued by the province.
Generally, these health cards from Ontario or Saskatchewan for example will allow you access to universal healthcare across the county. Many new Canadian citizens are interested in bringing their family members to the country; this often includes elderly parents or grandparents. Many governments are strict with this policy, as older individuals may need access to health care services.
Canada’s tax system
Canada’s tax system is similar to that of many countries. Employers and other payers usually deduct taxes from the income they pay you, and people with business or rental income normally pay their taxes by installments.
In Canada, both, the federal and provincial/territorial levels of government impose personal income tax on individuals. This means that you will pay two types of income tax: federal income tax and provincial/territorial income tax, depending on your province/territory of residence as of December 31st of the previous year.
Many of the benefits people enjoy in Canada are made possible through taxes. Canada’s tax system pays for roads, schools, health care, social security, and public safety. Each year, you determine your tax obligation by completing an income tax and benefit return and sending it to the CRA.
An income tax return is a comprehensive account of the previous calendar year’s (January 1 to December 31) income and deductions, along with federal, provincial, and territorial taxes paid and owed. It also helps determine if you’re entitled to a refund from the government of some or all of the tax that was deducted from your income during that year.
As a resident, deemed resident or non-resident, if you don’t have any Canadian income and have been in Canada for a very short time (less than 183 days in a year), you may not be required to file a tax return. However, filing tax returns has certain benefits:
- GST/HST credits, the Canada Child Benefit (CCB), the Canada Worker Benefit formerly known as Working Income Tax Benefit, and other provincial or territorial benefits and credits.
- A tax refund is issued when you didn’t earn enough income during the year or you paid excess tax. The government sends you back all or part of the taxes you’ve already paid.
Aside from healthcare, the government uses the taxes paid to fund other sectors to get them improved to a certain standard. They make use of the taxes to pay for projects like the construction of public schools which in turn will provide jobs for her citizens, construction of roads as well and transfer payments from financially better off provinces to others.
Tax revenues are used to decrease the divide between the rich and poor by evening out the playing field. The level of income tax may surprise newcomers planning to become Canadian citizens. For example, individuals from Saudi Arabia may be surprised by income tax, as it does not exist in their home country.
Click “Next Page” below to continue with the rest of the article.