Immigrants and Canadian Tax Residency

An individual who enters Canada during the year is generally considered a part-year resident for Canadian tax purposes.

Upon arrival in Canada, an immigrant should complete the following important steps:

Apply for a Social Insurance Number (SIN).
Apply for the Canada Child Benefit (CCB), if applicable.
Apply for the GST/HST credit.
Keep a record of the fair market value of foreign assets on the date of arrival.

The increase in the value of foreign assets after becoming a resident of Canada may be subject to capital gains tax when the assets are disposed of.

For more information: Newcomers to Canada (Immigrants) (opens in a new tab)

Example: Matthew Lenard and Family

Matthew Lenard and his family immigrated to Canada from Brazil on March 10th. His wife Laura and two-year-old daughter Emily accompanied him.

Matthew earned CDN $25,000 in Brazil until March 9th. Laura was a housewife. After arriving in Canada, Matthew earned $9,500 from various jobs.

Question: Should Matthew file a Canadian tax return?

Answer

Matthew is considered a part-year resident of Canada. He became a Canadian resident for tax purposes on March 10th, as he arrived in Canada with the intention of staying.

As a result, Matthew is required to report his worldwide income earned from March 10th onward.

Matthew is not required to pay Canadian income tax on the income he earned before March 10th, when he was still a resident of Brazil.

Canada Child Benefit and GST/HST Credit

Laura should complete the Canada Child Benefit Application (RC66) and the GST/HST Credit Application (RC151) to apply for available benefits and credits.

Both Matthew and Laura should file Canadian tax returns to receive the Canada Child Benefit.

On the Canada Child Benefit application (RC66), Matthew must provide information about his worldwide income for the previous two years before immigrating to Canada.

Reporting Worldwide Income for Benefit Purposes

The CRA requires worldwide income information to determine the correct amount of Canada Child Benefit (CCB) and GST/HST credit available from the date of arrival in Canada.

Matthew may also be required to file Brazilian tax returns for the income earned in Brazil during the period when he was still considered a resident of Brazil.

Important Note: A taxpayer must report worldwide income earned during the period when they were not a resident of Canada for GST/HST credit and Canada Child Benefit purposes. The RC66SCH form must be completed along with the GST/HST Credit and Canada Child Benefit applications.