Taxes Implications for International Students Studying In Canada

If you are an international student studying in Canada, you may have to file a Canadian income tax return. You must determine your residency status to know how you will be taxed in Canada.

Residency status

For income tax purposes, international students studying in Canada are considered to be one of the following types of residents:

• resident (includes students who reside in Canada only part of the year)
• non-resident
• deemed resident
• deemed non-resident

Residency status is based on the residential ties you have with Canada.

What are residential ties

Residential ties include:

• a home in Canada
• a spouse or common-law partner or dependents who move to Canada to live with you
• social ties in Canada

Other residential ties that may be relevant include:

• a Canadian driver’s license
• Canadian bank accounts or credit cards
• health insurance with a Canadian province or territory

Determining your residency status

In general, you probably have not established significant residential ties with Canada if you:

• return to your home country on a periodic basis or for a significant amount of time in the calendar year
• move to another country when not attending university in Canada

However, many international students who study or carry-on research in Canada do establish significant residential ties with Canada.

Your tax obligations

Canada’s tax system is like that of many countries. Employers deduct taxes from the income they pay you, and people with business or rental income are required to pay their taxes by installments.

Your residency status determines your income tax return filing requirements in Canada:

• if you entered Canada during the year and have established significant residential ties with Canada, follow the filing requirements for newcomers to Canada
• if you have not established significant residential ties and are not deemed to be a resident of Canada, follow the filing requirements for non-residents of Canada
• if you are a deemed resident of Canada, follow the filing requirements for deemed residents
• if you are a deemed non-resident of Canada, the rules that apply to non-residents of Canada also apply to you

Should you file or not?

Canada Tax Return is called “Tax and Benefit Return”.  So, filing taxes would determine your eligibility to claim benefits even though your income is non-taxable or NIL. You may also file to carry forward your unused amounts/ credits to future years.

Common credits that any taxpayer or an international student are eligible for include:

• tuition tax credit- Form T2202-Tuition and Enrollment Certificate is required
• transfer unused eligible tuition fees amounts of the current year to the designated individuals, up to a maximum of $5000. You may carry forward the unused amounts to the future years as well.
• goods and services tax/ harmonized sales tax (GST/HST) credit
• to begin/ continue receiving the Canada child benefit (CCB)
• and other benefits from certain provincial-related programs.

Find Out More

This article includes a general summary of tax rules. Need specific tax advice? Hire a Professional Accountant and get the best working for you. 

Filing Taxes concisely deals with several complex issues; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Our experienced and professional team at Filing Taxes is here to set you on the right path considering your personal business situation. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.