Filing taxes
 

I landed in mar 2007 but only stayed a few days...

I found out yesterday that i should have filed taxes... non resident at least.

Does anyone know what the penalties for late filing are?

Re: Filing taxes
 

Do you have a Canadian Social Insurance Number? If you stayed only a few days,did you come under the Immigration process? Did you have any earnings during that period? You say you were a non-resident. As such I cannot believe you would be required to file a tax return unless you made a large amount of money during the few days and had entered the country under the Immigration process. Under Canadian Tax Laws, if you are a resident, any income from any source in the world is to be reported.

Re: Filing taxes
 

many thanks for the response. I landed as a permanent reside
but, did not earn any money... I found the tax return for non-residents last night on the internet and from what i understood, one must file... i might have got my undergarments in a twist but that was what i understood.

we are due to return permanently and whilst filling some other forms, they all ask for the amounts filed in the tax return... this is what prompted this dilemma in the first place

Re: Filing taxes
 

SCORPION, I agree with brianscottie43 that it is very unlikely that you were supposed to submit an income tax return for the 2007 tax year.

In most circumstances you would have had to do that only if you'd been a tax resident of Canada. Landing and activating your permanent resident status does not, in and of itself, make you a tax resident of Canada.

Here is Canada Revenue Taxation's web page about non-residents of Canada. Note that they use the term in the taxation sense, not in the immigration sense.

That page states:
Further on it states:
It sounds to me as if you didn't have income from Canadian sources in 2007, and you weren't a tax resident of Canada because you spent only a few days in the country that year, so it's my view that you were under no obligation to file a Canadian income tax return (even a non-resident income tax return) for 2007.
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Re: Filing taxes
 

many thanks for your response.


So is it okay to put $0 in the boxes about filed taxes. also the info on these forms will be verified by CRA, so i just want to be sure

Re: Filing taxes
 

It would help to know which forms you're completing. It's difficult to answer a question if one doesn't know what the form says.

In general, I do not believe that $0 would be the correct answer. To me it implies that you completed a tax return and reported an income of $0. But in fact you didn't submit a tax return.

So, to my mind, No or Not Applicable would be the correct answer. But, again, I don't know which forms you're completing, and I cannot see what the options on those forms are.
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Re: Filing taxes
 

Unless you made more than your personal exemption (aound 9-10,000), and you had no oither tax credits or write-offs then you won't have to pay taxes. Therefore there will be no penalty.

The penalty is on taxes owing.

You have a right in Canada to pay the least amount of taxes legally possible.

It's OK to put zero income if that is the case.

Re: Filing taxes
 

Judy,

they are OSAP and Canada Child tax Benefits. Is it okay to waive any rights to backdated CCTB as I have been out of the country... I am just trying to keep things as simple as possible

Once again, many thanks for your help

Re: Filing taxes
 

Many thanks ...

Kind regards

Re: Filing taxes
 

I still don't know which form you're completing.

I looked for your previous posts to see if they would shed any light on the matter. I found OSAP student loan.

So I am guessing, but don't know for sure, that in 2007 you received a loan from Ontario Student Assistance Program, went overseas to study, have now returned to Canada, and have to complete a form regarding the repayment of your student loan.

But I'm only guessing and, even if my hunch is correct, I'm still not looking at the form you're looking at, and I can't see what that form says. I'm on Vancouver Island and perhaps you're in Ontario, and we're probably three time zones apart from each other, and I cannot see that far.

At this point I just do not know enough about your situation to help you, and we've probably drifted into a topic that I know nothing about. But, for the benefit of someone who was qualified to assist you, it really would help if you would tell them the whole story.

Yes, it's okay. You in any case were not eligible for CCTB while you were out of the country.
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Re: Filing taxes
 

Judy,

I am applying to OSAP to start a course in Jan '09 at UofToronto.... I read my previous post... I declined the offer to study in the UK... I applied to UofT instead... hence why I have to complete the forms...

thanks for confirming the CCTB status.

Re: Filing taxes
 

Thanks for the clarification. It helps.

Because I still didn't know exactly what questions OSAP was asking you, I went to their website with the intention of seeing their application forms. However, I found that I was unable to view an entire application at once. The website asked me to register and to fill in all kinds of information about myself (name, SIN, date of birth, address, details of previous studies, etc.) before it allowed me to progress to the part of the application in which I was interested. I didn't feel like going through the hassle of creating a fictitious persona to that level of detail, so I never did see the questions about the applicant's financial situation.

I am guessing, but don't know for sure, that OSAP is asking about your income from all sources, not just Canadian sources. For example, you might have had a savings account somewhere in the world that paid you the equivalent of a few dollars in interest. I would guess that that income would be reportable on the OSAP application form.

Without having seen the application form but having read a bit of the background blurb on their website, I gather that OSAP also would be interested in family income (e.g., a spouse's income). However, I am guessing that your spouse's income might be reportable on a separate line from your income. (In my hasty reading of some of your previous posts, I saw something that suggested to me that you were married.)

But everything I've said about OSAP is speculation, because I don't know.

Canada Revenue Agency is another matter. I provided my early response to you in the context of Canadian tax obligations, and I'm sure brianscottie43 and triumphguy did too.

I stand by what I said earlier. If you were not a tax resident of Canada and if you did not earn income from Canadian sources in 2007, you were not obliged to file a Canadian income tax return for 2007.

Sorry I can't help with the OSAP side of things.
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Re: Filing taxes
 

You only HAVE to file a general tax return for 2007 if you were resident for tax purposes in the year AND owe tax. It seems extremely unlikely that you were tax resident in Canada in 2007.

You only HAVE to file a non-resident tax return for 2007 if you have Canadian source income AND owe tax.

You can choose to file a return for several reasons and, as mentioned above, if you don't owe tax there is no penalty. If you are applying for benefits in 2008 it is probably a good idea to file a zero return for you and your OH for 2007 to get yourselves into the Canada Revenue Agency's system. You'll need your Social Insurance Numbers. If you do have them yet you should apply for temporary taxpayer's numbers.

CCTB is only for people who are tax resident in Canada. You should apply as soon as you move here. On the application form (well, the accompanying schedule) you need to report your world-wide income, converted to Canadian Dollars for the preceding two years plus current year.

I don't know about the other form you are completing. If you want to post a link I'll have a look at it and give you my interpretation.

Re: Filing taxes
 

If you are a resident for a tax year it might be a good idea to file a tax return, even though you have no income. It puts you on the books so to speak, and according to my accountant may help to start build your credit history (even though taxes and credit are not related - don't ask me how one helps the other, I'm not my accountant).

Re: Filing taxes
 

Many thanks to all of you for taking time out to help... your input is greatly appreciated.

I will file a non-resident tax return for 2007 to get on the system... it will certainly help with the osap verification with CRA...

I will certainly miss the UK tax system... roll on the paperwork

Re: Filing taxes
 

[QUOTE=JonboyE;6976078]

Hi!
This question is addressed to JonboyE & Judy.
We (Myself + Spouse & NO KIDS) have received our PR Visa (valid till Aug'09)and COPR forms and we are still 'NOT LANDED IMMIGRANTS' and we are not very clear w.r.t canadian tax system.

I would appreciate receiving your valuable comments and advice for the questions listed below but before that a brief @ us...

We are presently in UAE and both are employed, we do plan to buy a house (NOT IN CANADA AS YET) and are planning to just enter canada to complete the PR formalities and return back to UAE (I understand that to keep the PR valid we need to be physically present in canada for a total of 750+ days in 5 years period)

1. Can we only land in Canada, so that the PR cards could be processed and sent to our local canadian address. Upon receipt of the PR cards we intend to move back to UAE. Is it mandatory to immediately apply for the SIN and Health Insurance? we do not intend applying for the SIN / Bank Ac / Credit cards / DL nor rent or buy a property in Canada soon after landing since we plan to move out for another 1 or 2 years before making the final come back.

2. Are we liable to file any tax returns for the period we are out of canada (consider the initial 2 years after the first entry & exit, possibly we might enter canada each year for holidays in these 2 yrs. with each stay of a max. of 1 month and acco with friends / hotel). I assume that we will be considered as non-resident since we do not have any primay or secondary residential ties with canada with the expection of the PR cards and i am not sure whether only a PR card can be considered as having residential ties.

3. What and how should things be declared at the time of landing (leave aside - goods accompanying / goods to follow & minimum settlement funds etc.) We currently own a house and we intend purchasing another one which will be of higher value but we are not sure ... shud we first buy the house and declare its value when we land or just declare the cash amount and after returning back we can complete the purchase... the reason being if we get into a sales agreement and if there remains a part payment to be done than it can be considered as a liability on us at the time of landing and if we opt for the 2nd option, we can only declare the cash and later make the purchase with all the possibility that the house value will be more than the cash amount declared at the time of landing... what implications will it have for future capital gains tax and tax filings.

4. If we land in ON and get our PR cards done, is it possible to move to another province and complete the SIN / Health insurance etc as and when we land a job ... say in AB or SK etc.

5. If we use our 2nd property for rental income wherein canada has a tax treaty on dual taxation ... Plus salary thru employment in UAE, since UAE currently does not have a income tax system so there might not be any tax treay between canada & UAE. How will this effect us in the near future.

6. If we settle down in canada and want to sell off the 2nd property which was not declared at the time of entry, will it be possible to transfer funds to canada without taxes / capital gains tax or atleast not on the cash value declared at the time of landing.

I know, I am asking for a lot of information with hypothetical situations and I would be really greatful for all the advice / suggestions so as to clear our doubts.

Thanking you guys and everyone else in advance.

Regards,
Sam

Re: Filing taxes
 

Yes, this is OK. Many people do this.

You can apply for a SIN, but you don't have to yet. You cannot apply for health insurance because you are not resident in a province (and it is a very bad idea for your tax status as well). It is also OK, but not necessary, to open a bank account as long as the account is not used for your day to day banking activities. You should not buy or rent a property that could be considered a home for yourselves.

Yes, if you do the above you will not yet be resident in Canada for tax purposes so you will not need to file a general tax return in Canada. You will only need to file a non-resident tax return if you have any Canadian source income.

That is all you need to declare on landing.

As long as you are not tax resident in Canada this is of no concern to the Canadian government. When you do become tax resident, which is usually on the day you move here to live, you need to value all of your overseas assets in Canadian dollars at the exchange rate on that day. You don't need to make a declaration yet, but you do need to keep a rercord of their values. Formal valuations are ideal but if not available try and get as much third party evidence as possible e.g. an estate agents suggested selling price.

When you file your first Canadian general tax return (which will be by the end of April of the year after you move here) you have to declare foreign assets worth more than $100,000 and all foreign income from the day you became tax resident.

I don't think there will be any problem doing this.

Once you are tax resident in Canada you pay Canadian taxes on all your income. It doesn't matter where in the world the income is earned. IF you pay any foreign taxes you can offset most of them against the Canadian tax due on the same income. This is Canadian tax law and it is not affected by whether or not a tax treaty is in place.

There is no tax benefit in earning a tax free salary in the UAE to earning a similar taxed salary in Canada. If you have the choice you might want to consider the pros and cons of paying Emploment Insurance and Canada Pension Plan premiums.

Transfering funds is no problem - there is no tax on cash. However you will have a capital gain or loss on the sale of your second property. This is the difference between the net sale proceeds (selling price less estate agents commission less lawyers fees and so on) and the value at the time you became tax resident in Canada. This is why you needed the valuation we discussed above.

Half the capital gain is added to you income and taxed in Canada. If you have a capital loss then half the loss can be offset against past, present or future taxable capital gains - but not any other income.

Re: Filing taxes
 

[QUOTE=JonboyE;6985626]

Thanks a lot Jonboy for all your time and efforts ... its really appreciated... not to forget your advice / suggestions.

I still have a few doubts and would like you to kindly clarify ...
__________________________________________________ _______________
Yes, if you do the above you will not yet be resident in Canada for tax purposes so you will not need to file a general tax return in Canada. You will only need to file a non-resident tax return if you have any Canadian source income.

** You mean to say that, if we do not have any canadian source of income while we are non-residents, than we are not required to file any tax returns.

__________________________________________________ _______________
That is all you need to declare on landing.

As long as you are not tax resident in Canada this is of no concern to the Canadian government. When you do become tax resident, which is usually on the day you move here to live, you need to value all of your overseas assets in Canadian dollars at the exchange rate on that day. You don't need to make a declaration yet, but you do need to keep a rercord of their values. Formal valuations are ideal but if not available try and get as much third party evidence as possible e.g. an estate agents suggested selling price.

When you file your first Canadian general tax return (which will be by the end of April of the year after you move here) you have to declare foreign assets worth more than $100,000 and all foreign income from the day you became tax resident.

** I guess, upon landing the immigration & CRA will treat us as tax residents of canada and i read at some other place that we need to declare & get the documents stamped at the time of landing - the cash equivalent in CAD a/v in foreign bank a/c which we may or may not transfer in the future and property values in CAD so that at the time of transfer of funds, capital gains / loss will be applicable (currency exchange gain / capital gains on property sale). As mentioned by you that the above can be declared only when we become tax residents in canada / usually from the day we move to live in canada. Do we need to inform CRA & Immigration in advance or when we move out of Canada upon doing the PR card formalities. How will CRA treat our absence from canada for the first 2 years after landing.

Thanks in advance & sorry for the trouble.

Warm regards,
Sam

Re: Filing taxes
 

Your interpretation is right. If you are non-resident for tax purposes, and have no Canadian source income, then you do not need to file a tax return.

__________________________________________________ _______________
When you land you need to declare:

a) any goods you have with you
b) any goods you now own that you will later bring into Canada. There are plenty of threads about the goods to follow list if you do a search. It is this list that gets stamped when you land.
c) the amount of liquid funds you have available (not necessarily with you - a bank statement is fine).

These decalrations are for customs and immigration purposes - not for income tax.

Landing, by itself, does not make you tax resident in Canada. That happens when you establish residential ties here which usually means when you move here to live. There is more information in the wiki. Although the wiki says that you usually become tax resident in Canada when you land as a PR this will not apply in your circumstances. If you arrive in Canada, "land" for PR purposes, have a vacation, and then return to your usual home in the UAE, then you will not become tax resident here.

If, say, in 2010 you move from the UAE and set up a home in Canada you will be tax resident here from the day the 'plane touches the tarmac. This is the day you should have a valuation of all your non-Canadian assets in CAD converted at the rate then current. Your liability for taxable capital gains starts at this point.

If you move here in 2010 you will have to complete a 2010 general tax return and file this by April 30, 2011. The tax return will ask you the date you became resident in Canada and you put down the date you moved here (because "resident" for immigration purposes is not the same as "resident" for tax purposes). The tax return also asks you if you have foreign assets worth more than CAD 100,000. If so, you have to complete a form T1135 and file this with your tax return. This is the extent of the declarations you need to make to the CRA unless you have any taxable income or loss from the foreign assets.

You will not be tax resident in Canada so the CRA have no interest in you. However, I have described a simple situation here. If you plan to move to Canada in stages (for example, buying a home or establishing a business before you move over) then it is best to carefully examine your situation with some professional help.