What tax knowledge do new immigrants in Canada need to know?

According to statistics, more and more people from China immigrated to Canada, showing a linear growth year by year; After landing in Canada, many new immigrants have to face a series of livelihood problems, the most important of which is the tax problem in Canada.

I. Canadian real estate tax

With the active and growing real estate transactions of China immigrants in Canada, the real estate tax troubles of China immigrants in recent years are also soaring. Common situations are: real estate transactions are fined by the tax bureau (the source of funds is unknown), but the income from the sale of self-occupied houses is tax-free, and it is treated as operating income. No one could have enjoyed GST/HST tax refund when buying a new house.

The main reason for these problems is that new immigrants generally lack understanding of some key tax issues, such as how to plan the source of funds in advance, how to determine whether it is tax-free self-housing, how to distinguish between capital appreciation and business income, and how real estate transactions lead to tax inspection by the tax bureau. Jinqiao experts reminded that in order to prevent the tax risks of real estate, you can go to the website of the Canadian Taxation Bureau, consult the relevant cases of the Canadian Tax Court, and understand the relevant rules of the game.

Two. Net assets evaluation

Taxpayers who have lived in Canada for a long time generally know that their annual declared income should be roughly the same as their annual expenditure (including living expenses, purchase of assets, investment, etc.). ). This is actually the basic concept and principle of net assets evaluation method in taxation. Through the evaluation of net assets, the tax bureau can check whether taxpayers have funds of unknown origin. Because taxpayers have the burden of proof in the tax law, funds of unknown origin may be treated as taxable income by the tax bureau. Due to the relative convenience of use and the recognition of case law, the assessment of net assets has increasingly become an important means for the Canadian Taxation Bureau to assess individual income tax.

Due to the differences in experience and culture, immigrants to China generally lack the significance and vigilance in this respect, so they will be caught off guard once they encounter the assessment of their net assets. Because the amount involved in net assets evaluation is often large, it is a great threat to immigrant Chinese. In fact, as long as you have a certain understanding of immigration, you can avoid some tax risks after immigration. For example, when declaring income, businessmen should consider the living expenses of their families for at least one year, keep enough written evidence when borrowing money from others, and keep complete sources of funds and evidence of how the funds enter Canada when making money from China. As the net assets assessment is an assessment method used by the Inland Revenue Department, the Inland Revenue Department will not disclose too many details in this respect.