Notes on tax declaration of Chinese immigrants in Canada

Notes on tax declaration of Chinese immigrants in Canada

1, not paying attention to tax returns

Canada's tax declaration system is very strict and thoughtful, and the tax payment system is closely related to the life of everyone and every family. Whether it is a high-income family or a low-income family, we should pay attention to the annual tax declaration system and cannot handle it at will. If the income composition of the applicant is relatively simple, you can fill in the tax bill yourself or ask a friend. Some community centers sometimes provide free tax returns for new immigrants. If the income composition of the applicant is complicated, it is best to find a professional tax filing agency to help with the tax filing, or buy a tax filing floppy disk to fill in. You can collect the tax bill from the nearby post office from 1 month to April every year. The tax bureau has not only the tax returns of the current year, but also the tax returns of previous years. Canada is a welfare country with high taxes, and its taxes are taken from the people and used by the people. Therefore, in order to enjoy the welfare system in Canada, we must pay attention to the annual tax return. The government will only determine the corresponding tax refund and subsidy after fully grasping the applicant's personal and family information and income status.

If you think you have no income, don't file tax returns.

This misunderstanding is more common among new immigrants, who think that they or their spouses do not need to file tax returns if they have no income. Whether you have income in Canada or not, as long as you are a Canadian resident, you still need to file tax returns if you have no income. Because the Canadian government determines your annual tax rebate according to your annual income and tax payment, the government will determine your housing subsidy according to your annual rent and local tax. If you have children, the government will approve the child's milk subsidy according to your family income. If the government doesn't have this information, it will stop giving milk subsidies. For example, the government gives every family a GST tax rebate every quarter every year, and can't enjoy the special allowance gas subsidy issued last year. Therefore, it is very important to file tax returns in Canada, and it is necessary to develop the habit of filing tax returns in time.

3. Incorrect understanding of Canadian tax rate.

In 2000, the marginal tax rate in Canada was: the taxable income was 0-30004 Canadian dollars, and the tax rate was 22.20%; $30,005-54,000, 3 1.24%; $54,00 1-60,009, 33.09%; $60,0 10-63, 100, 39.39%; $63, 10 1- 100,000, 43.40%; 100000 USD or more, 46.4438+0%. There are often two misunderstandings about this tax rate for China immigrants. One is that as long as there is income in Canada, no matter how low, the government will take part. Therefore, many immigrants whose income is far below the average, especially new immigrants and those who are about to immigrate to Canada, are complaining that the tax in Canada is too high. Second, I think it is not cost-effective to increase the income by a certain amount after the income reaches a certain amount. I actually get less. This is actually a completely wrong misunderstanding. The above tax rate actually refers to the taxable income after deducting various tax allowances. Based on a couple's annual income of 1 10,000 yuan, the actual tax payment should be only about 0-500 Canadian dollars, instead of 20,000 times 22.20%. On the other hand, Canada helps the poor through taxes and subsidies to prevent the disparity between the rich and the poor. Take the couple with the above income as an example. Although they paid a little tax on the tax form, in fact, they can get about $65,438+0,500 from the government through the goods and services tax subsidy, the house purchase plan subsidy, the low-income gas subsidy and the RRSP tax exemption. If they have children, there are subsidies such as children's milk subsidy, low-income working family subsidy, day care subsidy or child care fee tax exemption, plus free primary and secondary education and free medical care. Therefore, it is a misunderstanding that low-income individuals and families also complain about Canada's heavy taxes. At the same time, because Canada implements a progressive tax rate, there is no case where the income above a certain income level is not as much as the money received under this income.

4. Not good at reasonably purchasing registered pension (RRSP).

As soon as some new immigrants find jobs, some bank employees or financial agents recommend buying RRSP, saying that RRSP can be tax-free. However, when filing tax returns, people find that the purchased RRSP is not tax-free, and if the purchase amount exceeds $2,000, they may face government fines. In fact, the government's tax relief for RRSP is conditional. The RRSP purchase limit is determined according to 18% of the income of the applicant in the previous year. After each year's tax return, the government will issue a notice of tax assessment, setting out the quantity of RRSP that the applicant can purchase. In the actual purchase, the government allows the buyer to exceed the maximum limit of $2,000, but only the part purchased according to the approved amount can be used to offset his income, thus achieving the purpose of tax reduction. New immigrants who just entered the country did not work in Canada the year before, so there is no quota. For immigrants who didn't work in Canada in the first year, if their income didn't reach the basic tax, RRSP is meaningless for their tax reduction in that year. If you estimate that your income may increase significantly in the next few years, even if your current income is higher than the basic tax, you can consider leaving the RRSP quota for the next few years to avoid the high tax rate in the future.

5. It is lucky to file tax returns.

When filing tax returns, some people report expenses that cannot be exempted as tax allowances, or conceal the income that should be reported. For example, the moving expenses (travel expenses, accommodation expenses, meals) for moving due to new job needs can be deducted as income, thus reducing taxes. Some new immigrants report their air tickets for their first landing in Canada as moving expenses. For example, the tuition fees of regular schools can be used as a deduction of income, and some people report the ordinary cost of learning to drive. These are against the rules. In Canada, the government and individuals are based on mutual trust. When you submit your tax return, the government does not require you to attach invoice receipts, but requires you to be honest and keep these invoice receipts for at least ten years. The government conducted spot checks on these invoices and receipts afterwards. Once a spot check is made, a valid invoice receipt cannot be provided, and personal reputation will be greatly affected. If you treat tax returns with a tolerant heart and use your reputation as the price of that little interest, it will not be worth the candle. In Canada, it is very important to learn to cherish your reputation first. In terms of underreporting income, the most common thing is that homeowners conceal rental income. On the one hand, it violates the principle of good faith, and once it is discovered, the consequences will be serious and personal reputation will be affected. On the other hand, most immigrants who have just entered the country for a few years buy houses by loans, and the loan interest, house decoration, house utilities, local taxes and other expenses can be deducted from their income in proportion to the rental area. Therefore, the net income of housing rental at least a few years ago is generally not high or even negative, so there is no need to hide it.

I'm not used to leaving invoices and receipts.

Many mainland immigrants came here and soon bought their own small businesses and registered and established limited or unlimited liability companies. According to government regulations, all expenses related to small businesses can be classified as small business expenses. But there must be a reasonable and legal invoice. Therefore, we should get into the habit of keeping invoices. Such as gasoline, transportation, advertising and other reasonable expenses related to small businesses, families without small businesses also need to keep invoices, such as tuition, rent, medical expenses, child care fees and so on. These invoices are an important basis for offsetting income and should be properly kept. If you don't keep this kind of invoice properly, it can't be used to deduct your income and reduce your tax payable when filing tax returns. Of course, some people will think that I will fill out the tax bill after I pay it. Anyway, the tax bureau doesn't require me to attach an invoice. If I find it, I will explain it clearly. In fact, when you are really discovered, if you can't produce evidence, it will not only be invalid, but also affect your personal reputation. This is a very sound legal society, and it has many effective measures to ensure that everyone abides by it. Therefore, when dealing with the government, the first thing that comes to mind is to do it according to the requirements of the government. At the same time, it also ensures that it has a good reputation in this country.

7. Pay more attention to economy than financial management

Many new immigrants from China, especially those from Chinese mainland, pay great attention to saving pocket money for food, accommodation and travel for themselves and their families. However, they have a weak concept of family financial management and neglect management. In fact, unlike China, in Canada, the proportion of food in household expenditure is very small, accounting for only 1 1% on average. The proportion of travel expenses is even lower. Therefore, even if you don't eat, drink or play, you can't save most of your money. But on the other hand, in terms of personal tax payment, housing, old-age savings, all kinds of insurance, children's education savings, private cars and so on. The average expenditure ratio is much higher than that in China. It is very important to plan and arrange these expenses reasonably, so as to strive for the maximum benefit. In addition, the investment environment in Canada is very different from that in China. The government's welfare programs are diverse and the government's tax regulations are very complicated. Therefore, it is very important for a family to have a stable and reliable financial adviser or friend. In Canada, it is very easy for the same middle-income family to have a difference of hundreds or even thousands of Canadian dollars in annual real income due to the good or bad financial arrangements.

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