The first thing to realise is that the Canadian tax system still expects you to fill out forms declaring taxable earnings. In many countries correcting over paying and under paying your tax is done automatically. This is not the case in Canada, forms have to be filled in.
In Canada, the tax year runs from January through to December. Your pay slips could well show tax being deducted. You will need to keep these for reference. You will need to check as well, that the correct amount of tax has been paid. The tax season usually starts every February. This covers the previous year. For example, the tax you owe in 2016, will be paid in on February 2017. The dead line will be the end of April. If you still owe taxes, and you have not declared them, after this date, you could be liable for a penalty.
There are a number of things to take into consideration. You will not get a 100% tax refund. Even though, if you are on a Canada working holiday visa, and you are not eligible for Canadian Employment Insurance (EI) and a Canadian Pension Plan (CPP), these will be deducted from your pay.
The T4 is an information slip. This will show a summary of the money you have earned, along with the taxes you have paid in. There is a legal obligation, in Canada, for your employer to supply you with this T4 summary. You must have this in order to fill out your tax form. This should get to you by the end of February. This can be sent to you, by your employer, either by email or post.
If you leave Canada at an earlier point in the year, you will have to wait for the same date to file your Canadian taxation.
There are ways of getting refunds, even if you leave Canada early in the tax year. The T4 will be needed as well as filling out your tax forms. These refunds can be work related, medical and transportation costs.
Completing the Process
Forms can be downloaded from various sources online. The official agency is the Canadian Revenue Agency CRA. There is an official web site, NETFILE, set up by the CRA, where the whole process of filling out your tax returns, can be done on line.
You can buy and down load software which can do a lot of this for you. This can cost between $15 to $20 CAD. This can do the calculations for you, then you down load the forms. The cheaper software is usually restricted to one user, so you van not share this software around.
You need to be vary clear as well, what your residency status is. Are you applying as a resident or non resident.
Forms can also be posted. You can readily find forms from Canadian Post and Service Canada offices. These can then be posted on.
Using legal Companies and Accountants to Help You.
This might be an option, but legal companies may not have enough experience in this work, and may not consider doing it. Given they may not have much experience with working holiday tax returns. Costs start from $50 CAD upwards.
There are internal tax specialist companies in Canada, who will do all the work for you.
There are international options as well. If you are from Australia and you have undertaken a Canada working holiday visa, there are on line companies like Taxback.Com. This company will give you a free estimate then charge a fee depending on the work there is. They will also help you with getting back refunds.
Quebec a Special Case
All the other provinces and territories in Canada work under the same general federal tax system. However, Quebec has its own system. The provincial government collects its own taxation. This comes under the Ministere du Revenu du Quebec. For those of you in Quebec Province and say working there or Montreal, will have to check out their systems. They will be more than likely parallel the general Federal systems.
Some Technical Points: Resident or Non Resident.
If you are on a short term working holiday for a year or two, it is highly likely that you will be classified as non resident in Canada. This applies if you are resident somewhere else. You do not have “sufficient ties” to Canada. However, if you have worked in Canada for more than 183 tax days, you might be considered a resident
A resident in Canada is classified s some one who owns and rents a property, has a spouse or partner, and dependent children. You have a permanent job, own a car etc and have Canadian health insurance. Plus a Canadian passport and or a Canadian drivers license.
So it is highly likely, therefore, that if you are undertaking a working holiday job in Canada, you are non resident.
Requirements if you are non resident
As a non resident you would be expected to fill out a form which is “Income Tax and Benefit Return of non Residents and Deemed Residents of Canada.”
Added to this you will need an ITN number, this is an Individual Tax Number, this for anyone with out a social security number.
There are various ways of getting this on line. The best way is to apply via the official Canadian Web site for a “T1261 Canadian Revenue Agency Individual Tax Number (ITN) for non Residents.”
You will need the help of a good agency to help you with all of this. If you to keep an eye on the date. Keep all your payment slips. You must make sure you get a T4 form from your employer, when you make your tax return. Sort out a ITN number. If you are in Quebec province, look into the systems there. Again, there are international as well as Canadian agencies that can help you fill out the tax return. See if you are eligible for any tax refunds. A good agency should be able to deal with this.
This should not be too difficult. Get good outside help and be systematic about all of this and there should be no problems.