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1. Canadian Residents
All Canadian Residents are subject to Canadian income tax. Taxes payable are calculated based on their income in Canada, plus any income they earn on interests in any part of the world (their World Income).
The most common types of income required to be reported on a Canadian tax return are:
- Income from employment in Canada
- Income from a business carried on in Canada
- Taxable part of Canadian scholarships, fellowships, bursaries, and research grants, and
- Taxable capital gains from the disposal of taxable Canadian property
2. Non-Residents and Deemed Residents
If a person visits Canada for less than 183 days in a year, he/she is not a resident of Canada for some part of the year. If you fall in this category, you will pay Canadian income tax only on income earned from Canadian sources.
If a person is not a resident of Canada for any part of the year, but visits Canada for a total of 183 days or more in a year, he/she may be deemed to be a resident of Canada, If you fall in this category, you will be subject to Canadian income tax on your world wide income for the entire year.
Non-residents and deemed residents may or may not have to file a Canadian tax return. Much Canadian source income will have had Canadian tax withheld when it was paid, and in many cases there is no requirement to file a Canadian tax return.
For Non - Residents, there are special rules governing special situations like for example --sale or disposal of real estate. Capital gains etc. Tax treaties between Canada and other countries also govern tax implications for Non-Residents
For more information please check out the following links on the CRA web site re Canadian tax obligations for Non - Residents.
Note: Resident / Non-Resident Status
When determining a Non-Resident status -- in addition to the number of days spent in Canada per year -- several other factors are taken into account . For example, maintaining a residence in Canada, relatives in Canada, bank accounts in Canada, and other social and economic ties. A person who is a resident of Canada, and moves to another country, could still be considered to be a resident of Canada for tax purposes.
The Canada Revenue Agency has an Interpretation Bulletin that will help you determine your status as a Resident / Non-resident. It deals with the determination of an individual's residence status for income tax purposes and the factors to be taken into account in making that determination.
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