Filing Income Tax in Canada

I did soft landing last year and got my PR. I live in the UK and plan to move to Canada next year. Do I still need to file income tax in Canada ?

No, Canadian taxation is based on residency, that is, if and when you are physically living in Canada you are subject to tax. If you lived in Canada for several months (there is a cut off I forget) when you came for landing, you will have to look into filing tax.


I have a similar question. I moved to Canada in Sept 2020. My wife and kid moved in Jan 2021. Does my wife have to file taxes for 2020? I am not sure if I have to file our returns together or I just have to file mine (and she can skip hers for this year). The ‘residential ties’ clause in is a bit unclear - since it says presence of a spouse in Canada can be seen as establishing residential ties in which my wife becomes a part year resident for 2020?

Tagging @panditji for some insights :slight_smile:

My wife and I landed in Feb 2019 and moved permanently in Nov 2019 from the US. We didn’t file taxes in Canada for 2019 (neither of us had a job or any Canadian sourced income either). I didn’t even open a bank account in Canada till Jan 2020.

We filed taxes for 2020 this year and got our Notice of Assessments from the CRA without any objections.

My interpretation is the same as @am1’s. The way I interpreted the residency requirements was with this particular statute which I believed fit our situation -

If you have ties in a country that Canada has a tax treaty with and you are considered to be a resident of that country, but you are also a factual resident of Canada because you established significant residential ties with Canada, you may be considered a deemed non-resident of Canada.

Since we stayed in America for 11 months of the year and had all our income from there and Canada has a tax treaty with the USA. Me and my wife filed taxes in the USA as residents and since we had no Canadian sourced income (and were Canadian non residents for tax purposes), didn’t have any tax filing obligation in Canada.

Now I’m not an expert obviously, so I can’t say for sure if my interpretation is indeed accurate, however I feel fairly confident in it and don’t foresee any tax issues (we’ll know for sure in 3 years after the time runs out for the CRA to Audit our 2020 tax return or ask us to file one for 2019).

The other thing to note is that Canada follows a self assessment model, so you have to voluntarily report your income and the CRA obviously cross references and checks it against the information that they get from Canadian employers and financial institutions. If you don’t have any Canadian sourced income whatsoever, then realistically CRA has no way of finding out that you do. And it’s highly unlikely that the CRA will care about this at-least in the first year when you’ve not really lived in Canada and drawn from any of the social/welfare programs.

I think Canada and India also have a tax treaty so if your wife filed taxes in India and didn’t live in Canada then I don’t think that she would need to file taxes in Canada. Though I don’t know if the fiscal tax years for India and Canada not lining up matters. If her income in India wasn’t too significant and taxes paid in India would cover the Canadian tax liability, then it may just be more convenient to file taxes in Canada as well and perhaps make things simpler if she wanted to apply (or needed to ) for benefits like the Child Benefit or something that the government may offer later in the year and that might have a tax filing requirement for the previous fiscal year.

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thanks @panditji. Really appreciate the response.

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Update: I spoke to a tax expert at H&R Block. They clearly told me that only I need to file taxes for 2020 without claiming spousal amount deduction.

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