In 2018, a total of 721,205 international students at all levels studied in Canada—the largest number ever.
If you are an international student in Canada, you may have to file a Canadian income tax return. You also may have to pay Canadian income tax on earnings from teaching and/or research assistantships, other employment, and investment and business income. Generally, students also have to report income they receive from outside of Canada.
The Canadian tax system is based on residency not citizenship, meaning you’ll have to determine your residency status before filing your tax return.
Resident or Non-Resident
A resident of Canada is someone who has established residential ties to the country.
A non-resident would classify as anyone without such ties, and who resides in Canada for less than 183 days of the year.
Deemed Resident or Deemed Non-Resident
A deemed resident is someone who doesn't have significant residential ties in Canada, but stays there for 183 days or more during a calendar year. Deemed residents also shouldn't be considered residents of their home country under the terms of any tax treaty between Canada and that country. Residents and deemed residents are both responsible for paying Canadian taxes.
If you establish significant residential ties with Canada and are considered a resident of another country with which Canada has a tax treaty, you might be counted a deemed non-resident of Canada for tax purposes. Both non-resident and deemed non-residents are required to pay tax on income you receive from Canadian sources and these taxes are dependent on the type of income you receive.
This income could include investment earnings from employment, interest or dividends or taxable scholarships. If you want to learn a bit more – read our blog post that explains about residency status in Canada and how to determine yours.
Filing your tax return
Once you know your status, then it’s time for the fun part – to file your tax return! If you are an international student with Canadian source income or are considered a resident, then you can claim tuition credits and are eligible for benefits such as the harmonised sales tax credit.
If you are new to Canada and are filing your taxes for the first year, be sure to indicate the date you first arrived. As a result you will be entitled to a proportion of credits for the overall tax year, as you were not resident for the full year and therefore not entitled to the full allotment of credits.”
If you are a non-resident or a deemed non-resident and you do not have any Canadian source income, then you are not required to file a Canadian tax return.
So what do you need to file?
- Determine residency status
- SIN (social insurance) or ITN(individual tax) number
- T2202 – Tuition fees paid for the tax year
- T4 – Employment income and deductions
- T4A – Scholarships and bursaries
- Receipts for expenses (see below)
The most common expenses that students can claim as non-refundable tax credits are tuition fee, medical expenses, interest paid on your student loans, and donations
You may be eligible to deduct certain expenses from your tax payments. Moving expenses such as transportation and storage of personal effects, travel, and temporary accommodation may be considered eligible deductions.
Save your receipts for the cost of relocating to Canada. However, you can’t deduct moving expenses if your only income at the new location is scholarship, fellowship, or bursary income that is entirely exempt from tax under the current legislation. These expenses along with the moving expenses are used as deduction from the income in Canada.
In order to claim expenses in Canada you must keep documents proving them for a period of 6 years after you have Notice of assessment issued by the tax office.
Questions and answers:
1. Q: I am a student with no income from Canada, what can I do with the tuition fee?
A: Even if you don’t have income and you are not obliged to pay tax in Canada you can file a tax return with zero income for the tax year you paid tuition fee in Canada. After your return is assessed you will receive a Notice of Assessment with the unused tuition fee you are eligible to claim in future years. You have to claim this amount in the first year that you have to pay income tax.
2. Q: Can I transfer tuition fee paid in Canada?
A: Yes, you can transfer a maximum of $5,000 of the current year’s federal tuition amount, and where available, the applicable maximum for provincial and territorial tuition, education and textbook amounts, minus the amount you used to reduce your own tax owing. You can transfer the remainder to:
- your spouse or common-law partner
- your parent or grandparent, or your spouse's or common-law partner's parent or grandparent
To transfer the amount, you must complete the transfer section of the certificate you received from your school.
Keep all of your documents in case the CRA asks to see them later.
3. Q: Do I have to file a tax return in Canada?
A: You must file a return in Canada if:
- You have to pay tax for the tax year.
- You received a request from the Canadian Tax Office to file a return.
- You and your spouse or common-law partner elected to split pension income during the tax year.
- You received working income tax benefit advance payments for the tax year.
- You disposed of capital property during the tax year (for example, if you sold real estate, your principal residence, or shares) or you realized a taxable capital gain (for example, if a mutual fund or trust attributed income to you, or you are reporting a capital gains reserve you claimed on your tax return).
- You have to repay any of your old age security or employment insurance benefits.
- You have not repaid all amounts withdrawn from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan or the Lifelong Learning Plan.
- You have to contribute to the Canada Pension Plan (CPP).
- You are paying employment insurance premiums on self-employment and other eligible earnings.
- You are a non-resident receiving certain types of Canadian source income.
Even if none of these requirements apply, you should file a return if:
- You want to claim a refund.
- You want to claim the working income tax benefit for the tax year.
- You want the goods and services tax/harmonized sales tax (GST/HST) credit (including any related provincial credits).
- You or your spouse or common-law partner want to begin or continue receiving Canada child benefit payments, including related provincial or territorial benefit payments.
- You have incurred a non-capital loss in during the tax year that you want to be able to apply in other years.
- You want to transfer or carry forward to a future year the unused part of your tuition.
- You want to report income for which you could contribute to an RRSP and/or a pooled registered pension plan (PRPP) to keep your RRSP/PRPP deduction limit for future years current.
- You want to carry forward the unused investment tax credit on expenditures you incurred during the current year.
- You receive the guaranteed income supplement or allowance benefits under the old age security program.
4. Q: I am a student in Canada what type of expenses can I claim on my income tax return?
A: You can claim as a tax credit or transfer for future years the tuition fee you paid in Canada. You can also claim as a tax credit the interest paid on your student’s loan.
In case you are a resident in Canada and moved closer to the University you can claim moving expenses.
5. Q: When can I claim moving expenses?
A: You can claim eligible moving expenses when:
- you moved and established a new home to work or run a business at a new location; or
- you moved to be a student in full-time attendance in a post-secondary program at a university, college or other educational institution.
To qualify, your new home must be at least 40 kilometres (by the shortest usual public route) closer to your new work or school.
6. Q: What are the eligible moving expenses I can claim?
A: You can claim the following moving expenses:
- Transportation and storage costs
- Travel expenses
- Temporary living expenses for up to a maximum of 15 days
- Cost of cancelling the lease for your old home
- Incidental costs related to your move which include the following:
- changing your address on legal documents;
- replacing driving licences and non-commercial vehicle permits (not including insurance); and
- utility hook-ups and disconnections
- Cost to maintain your old home when vacant (maximum of $5,000) after you moved, and during a period when reasonable efforts were made to sell the home. It includes the following:
- property taxes;
- insurance premiums; and
- cost of heating and utilities expenses.
- Cost of selling your old home, including advertising, notary or legal fees, real estate commission, and mortgage penalty when the mortgage is paid off before maturity.
- Cost of buying your new home if you or your spouse or common-law partner sold your old home because of your move.