Taxes

Governments collect taxes to get the money needed to govern and provide services such as health care, education and highways. Federal and provincial governments collect income taxes and sales taxes. Cities and towns collect property taxes.

Income tax

The amount of income tax you must pay depends on your taxable income. All of your sources of income must be reported on your tax form.

Self-employed people and those who own businesses must make arrangements to pay income tax directly to the Canada Revenue Agency (CRA). For other people, income tax is deducted from their pay.

Employers mail T4s, Statement of Remuneration forms, to employees each year at the end of February. T4s include information about your employment income for the year and amounts deducted for income tax, Canada Pension Plan and Employment Insurance.

Generally, you must submit a completed personal income tax return (form) for each calendar year by April 30 of the following year. These dates may be different for people who are self-employed.

In February, March and April, immigrant-serving agencies and other organizations may offer free information sessions on how to complete tax returns. The CRA has volunteers who help complete income tax returns for people who meet certain criteria.

At the end of each year, the CRA mails tax packages to people who have paid income taxes before. A tax package includes a general guide and forms book, an income tax return and schedules. If you have never paid income taxes as a resident of Canada, you can get a tax package in any of the following ways:

• Download forms and schedules from the CRA.
   
• Pick up a tax package at any Canada Post outlet from February to May.
   
• Call the CRA toll-free number 1-800-959-2221 between 8:15 a.m. And 5:00 p.m. local time.

After completing an income tax return, you may find that you either owe money to the government or you will receive a refund.

For more information:

• See the CRA website.
• Call the CRA toll-free number listed above.

Other tax information sources about the Canadian tax system and how to complete your first income tax return are as follows:

• The pamphlet T4055: Newcomers to Canada.
• The fact sheet T4133: Are you a newcomer to Canada?

The on-line course Learning About Taxes also provides information about the Canadian tax system and how to file a basic income tax return.

Addresses and telephone numbers for tax services offices are listed in the government section of your telephone book and on the Contact Us page of the CRA website.

Goods and Services Tax (GST)

The federal government also gets money from a six percent sales tax called the Goods and Services Tax (GST). GST is added to the price of every purchase except for basic groceries, rent, used goods and some services (for example, many health care and education services). Basic groceries are foods you have to take home to prepare before eating. GST must be added to the price of other types of food.

If your income is low, you may be entitled to receive the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit. To receive this credit as soon as possible, complete form RC151, GST/HST Credit Application for Individuals Who Become Residents of Canada. To continue receiving the credit, you (and your spouse or common-law partner) must file an income tax return for each year you are residents of Canada.

For more information about the GST/HST credit, see the Canada Revenue Agency website or call 1-800-959-1953 toll-free. To get forms, see the website or call 1-800-959-2221 toll-free.

Canada Child Tax Benefit

If you have children who are under 18 years of age, you may be eligible for the Canada Child Tax Benefit. It provides tax-free monthly payments to help with the cost of raising children. The amount of money you may receive is based on the total of your net income plus your spouse's net income, and the number of children you have under age 18.

You can apply for this credit by completing Form RC66, Canada Child Tax Benefit Application and submitting it to the Canada Revenue Agency with all the required documents. You also may need to submit a completed RC66 Schedule, Status in Canada/Statement of Income.

Pamphlet T4114, Your Canada Child Tax Benefit provides more information. For a copy of this pamphlet or to order forms, see the Canada Revenue Agency website or call 1-800-959-2221 toll-free.

Property tax

If you own a home, buildings or land, you will have to pay property taxes to the local (city, town or county) government. The amount depends on the value of your property and where you live. Property tax assessments are mailed to property owners once a year. Renters do not have to pay property taxes.

Date Updated: Nov 01, 2007
RDP-593