Taxes

What are taxes in Canada?

Although there are many different kinds of taxes in Canada, as an international student you will generally only encounter two kinds:

  • GST: This is a value-added tax which is applied to all goods and services purchased in Canada.
  • Income Tax: Income taxes will deducted from any money you earn at a job, or from scholarships
  • A. General Income Tax Information

    As a student at the University of Alberta, you are subject to the taxation laws of Canada and the Province of Alberta. To help you understand the Canadian tax system visit Canada Revenue Agency (CRA) website.

    Canada has a self-assessment system, which means that each individual is required to determine their own taxes for each taxation year. The taxation year is based on the calendar year of January 1 to December 31. Completed tax returns should be filed by April 30 of the following year. Taxes are calculated by using income, deductions, non-refundable tax credits and refundable tax credits.

    As an international student, your requirement to file a Canadian tax return, and the type of income you must report, depends on your residency status in Canada. The CRA’s webpage will help you determine your residency status. You may also wish to consult the CRA publications “T4055 Newcomers to Canada” and “P105 Students and Income Tax” for more information.

    The costs you incurred when moving to Canada may be claimed against certain income. Be sure to keep your receipts for airline tickets and other moving expenses. For more information about reporting moving expenses, see line 219 - moving expenses; Canada Revenue Agency (CRA) www.cra.gc.ca; general inquiries: 1–800–959–8281.

  • B. How Are Your Taxes Assessed?

    Income

    If you are a resident of Canada, you have to report your income from all sources, both inside and outside Canada, on your Canadian income tax return. The most common sources of income are from employment, scholarships, fellowships, bursaries, and interest on money deposited in the bank. The sum of these will determine your total income. Part-time scholarship recipients of $500.00 or more will be counted as income and be taxable.  

    Deductions

    To reduce the income subject to tax, you may be entitled to deduct the amount you paid into pension plans, registered retirement savings plans (RRSP), union and professional dues and child care expenses. There are some other less common deductions that are listed in the tax forms, such as moving expenses. The costs you incurred when moving to Canada may be claimed against certain income. Be sure to keep your receipts for airline tickets and other expenses. Subtracting your deductions from your total income gives you your taxable income. The taxable income is the amount on which your federal and provincial taxes are calculated.

    Public Transportation Receipts (i.e. U-Pass receipt, ETS Transit Monthly Pass) identify the amount you paid for public transportation. If you are a registered U-Pass user, please include your U-Pass receipt, you can print from Beartracks. If you buy an ETS Monthly Pass, please include all of your monthly bus passes, store receipts are not applicable.

    Non-Refundable Tax Credits

    You may be entitled to claim certain non-refundable tax credits in calculating the amount of tax you may owe. Non-refundable tax credits reduce your federal tax. If the total of these credits is more than the income tax you owe for the year, you will not get a refund for the difference.

    If you are a newcomer to Canada, you may be limited in the amount you can claim for certain federal non-refundable tax credits. Your residency status may also affect your eligibility to claim other non-refundable tax credits otherwise available.

    As an international student, you may be able to claim the Tuition, education and textbook amounts. These amounts allow students to reduce their income taxes by taking into account eligible fees paid for tuition, and the education amounts for full or part time attendance.

    It is important to complete Schedule 11 of the General Income Tax and Benefit Package to ensure that any unused part of these amounts is either transferred to your spouse or common-law partner, or carried forward for you to claim in a future year.

    The non-refundable tax credits are subtracted from the federal income tax to determine your net federal tax. Alberta tax is calculated as 10% of taxable income and is reduced by non-refundable credits in the same manner as federal tax. The rules for calculating your provincial non-refundable tax credits are similar to the rules used to calculate your corresponding federal non-refundable tax credits.

    Refundable Tax Credits

    These credits include the tax that has already been deducted from your earnings. The refundable tax credits are subtracted from the total tax payable to determine if you will receive a refund from Canada Revenue Agency or if you are required to pay additional taxes. Many students are entitled to a refund.

  • C. Common Tax Slips Used by Students

    A. T4 summarizes your employment income and deductions for the year and is sent to you by mail from your employer.

    B. T4A summarizes the bursaries, scholarships, fellowships, and grants you received during the year and is sent to you by mail.

    C. T5 identifies the amount of interest you received from a financial institution and will be mailed to you. Some banks only provide receipts for amounts over $50. If you don’t receive a T5, you still must report your income.

    D. T2202A (Tuition, Education and Textbook Amounts Certificate) identifies the number of months you attended university during the calendar year. The eligible tuition fees are also indicated on this form. This form is available for printing on BearTracks.

    You can search for any CRA forms on their website, by entering the form name or number in the search bar.

  • D. How to file Income Tax Returns

    In order to file your income tax, you must complete the appropriate tax return and applicable schedules, attach the necessary information slips and send it to Canada Revenue Agency (CRA). 

    Depending on your situation, you can file your income tax by mail or Electronic File (EFile).

    You need to mail-in your income tax if:

    1. You arrived in Canada 2015, or

    2. This is your first time filing your income tax in Canada, or

    3. You are filing your income tax from previous years (2016, 2015, 2014, so on)

    If you have previously filed, you can file your 2016 income tax electronically.

    As an international student your requirement to file a Canadian tax return and the type of income you must report depends on your residency status in Canada. CRA’s webpage at will help you determine your residency status. You may also wish to consult the CRA publications "T4055 Newcomers to Canada" and "P105 Students and Income Tax" for more information.

    You should file a tax return for each year you are in Canada, even if you did not earn any employment income in that taxation year. By filing a return you will automatically receive a GST credit, make sure to keep track of credits you receive each year for your tuition. These credits can be forwarded and may be used to offset tax owing on future Canadian income.

  • E. Goods and Services Tax (GST)

    Every purchase (excluding groceries and other essentials) you make in Canada is subject to the Goods and Services Tax (GST) which means five percent is added to the purchase price of each item. Low-income wage earners are entitled to a GST credit on their income taxes.

    Starting 2014, you do not need to manually apply for your GST credit. If you file your income tax before April 30,2016 the CRA will automatically apply the GST credit to your account.

    Credits can either be mailed to you or directly deposited in your bank account quarterly. You are not eligible to receive GST credit cheques after you stop residing in Canada. For more information, see "RC4210 - Information on the GST/HST Credit."
  • F. Child Tax Benefit

    The Canada Child Tax Benefit (CCTB) is a tax-free monthly payment made to eligible families to help them with the cost of raising children under age 18.

    Generally, to be eligible to receive the CCTB, you have to live with the child and be a resident of Canada for income tax purposes (see Taxes). Other conditions may apply to temporary residents.

    For more information on whether you meet the conditions to be eligible for CCTB or to find out the amounts you may be entitle to receive, visit the CRA Benefits website or contact the CRA.

  • G. ISS Tax Clinic

    Need help filing your taxes? 

    The International Services Centre is working in partnership with the University of Alberta Accounting Club (UAAC) to help international students file their income taxes for free.
     
    International Services Centre (142 Telus Centre) free tax clinic: 

    Dates for 2017 (2016 tax year) will be announced in February, 2017.

    Drop-in for a free consultation, to organize your information and ensure that you have all of the right documents and tax slips to file your tax return. 

    Important: Please bring a USB key to the tax clinic, to save your files. 

    You will then meet a trained Community Volunteer Income Tax Program (CVITP) agent to immediately file your income tax. 

    Please note: To file your Income Tax, you need a Social Insurance Number (SIN). If you currently do not have a SIN, you need to obtain a SIN, before you can file your taxes

    If are not eligible to obtain a SIN, you must apply for an Individual Tax Number (ITN) to file your taxes. Visit the tax clinic to apply for your ITN and complete your tax return. Please bring a certified copy of your passport.