What Are Some Tax Breaks You Can Get As A Newcomer in Canada?

November 3, 2021 | Written by: Sohail Afzal

Canada's tax system

Canada’s tax system is somewhat complex and puzzling for some citizens, especially newcomers. Recent immigrants may find some difficulties when they first arrive. Depending on their tax situation and family structure, some new citizens may get tax breaks only if they are eligible. There are some benefits that these newcomers can claim. To help them understand, we created this blog to help them get a complete picture of their tax situation.

You need to apply for these benefits and your tax return for you and your spouse if you have one. The reason behind this is that you are on your journey to becoming a Canadian resident. You get a refund if you have an understanding of the tax system. It becomes too taxing and confusing for many people, and they hire an accounting firm to handle all these matters for them.

These benefits include all the payments for qualifying families and their children. A part of the goods and services tax is commonly known as GST, and Harmonized sales tax is commonly known as HST. The new residents, on their arrival, can claim the GST and HST credits. This process will help them calculate their taxes and income from both inside and outside of Canada. The receiving of these credits can be spread out over the year, but the tax refund is paid on a lump-sum basis.

Resident For A Tax Purpose

The CRA considers you as a proper resident of Canada when you have strong ties within the country. These strong ties could be your permanent residency, or it could be ownership of a business or if you are a member of any Canadian organization or simply family ties. For all these newcomers in Canada, their residency starts the date they have set foot in Canada. This date is important because it helps them determine whether their income is taxable when they file their taxes.

How To Claim GST/HST Credits

The GST/HST credits are the return of the sales tax that you have already paid. If you are eligible, the government will calculate the amount according to the number of your family members and your net family income. You have to fill the RC151 GST/HST Credit Application Form. You will then receive the payment every three months. If you have one, you and your spouse must pay tax regularly to continue receiving this payment. For the new residents, you must complete the forms to apply for this credit. Below are a few steps to follow:

  • Fill Out Form RC66 (If you have children) to apply for all child and family benefits, including the GST/HST credit.
  • Fill our form RC151, GST/HST (If you don’t have children)

If you want to know more about income tax in Canada, feel free to contact us, and we would be happy to assist you.

Sohail Afzal CPA Toronto

Sohail Afzal, CPA, CMA, MBA

Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.

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