Canadian Tax System

The defining feature of Canadian tax is that federal and provincial taxes are charged side by side. The same person, on the same income, pays federal income tax and provincial income tax — and files them together on a single return (the T1). Quebec residents file two: the federal T1 and a separate Quebec TP-1. The upshot is that the same salary can mean very different take-home pay depending on which province you live in. That federal-plus-provincial layering is also the part Korean newcomers find most confusing.

Resident vs non-resident

Tax residence isn't a simple day count — it's a holistic look at residential ties.

• Factual resident — you have your primary home, family, and dwelling in Canada. Worldwide income is taxable.
• Deemed resident — staying beyond a certain threshold (typically 183 days) automatically makes you a resident.
• Non-resident — only Canadian-source income (rental, employment, etc.) is taxable, usually with 25% withholding.
• Deemed non-resident — under a tax treaty, another country is recognized as your tax home.

For someone splitting time between Korea and Canada, the Canada–Korea tax treaty tie-breaker rules (permanent home, centre of vital interests, habitual abode, nationality) decide which side you belong to.

How income tax is structured

• Federal progressive tax — 4–5 brackets (roughly 15% / 20.5% / 26% / 29% / 33%, with thresholds adjusted yearly).
• Provincial progressive tax — separate brackets and rates per province. Alberta is comparatively flat and low; Quebec, Nova Scotia, and Ontario sit higher.
• Non-refundable credits — Basic Personal Amount, dependants, medical, charitable donations, etc.
• Refundable credits — CWB, GST/HST credit, some provincial refundable credits.

Sales tax: GST / HST / PST / QST

• GST (Goods and Services Tax) — federal 5%, on most goods and services.
• HST (Harmonized Sales Tax) — some provinces (Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, PEI) combine GST and provincial sales tax into a single rate (typically 13–15%).
• PST (Provincial Sales Tax) — BC, Saskatchewan, and Manitoba charge a provincial sales tax separately from GST.
• Quebec (QST) — GST 5% + QST about 9.975%, collected by Revenu Québec.
• Basic groceries are largely exempt, but restaurant meals and prepared foods are taxable.

Filing dates and tools

• Personal filing deadlines: most workers file by April 30; self-employed individuals (or their spouses) file by June 15, but any tax owing is still due April 30.
• Filing tools: NETFILE-certified software (Wealthsimple Tax, TurboTax, UFile, etc.) or My Account online.
• Income slips: T4 (employment), T4A (other), T5 (interest/dividends), T5008 (investments), T2202 (tuition) etc., issued by employers and institutions in February–March.
• Quebec residents file the federal T1 plus the provincial TP-1 separately.

Things Korean nationals should pay close attention to

• Your first year (part-year resident) counts you as a resident from your date of arrival; pre-arrival Korean income isn't taxed in Canada, but a world income disclosure is required.
• Foreign assets (Korean real estate, bank accounts, etc.) above a combined threshold (about CA$100,000) trigger the T1135 (Foreign Income Verification Statement) — penalties for missing it are steep.
• Korean pensions, interest, and dividends must be reported in Canada too, with the Foreign Tax Credit (FTC) preventing double taxation.
• TFSA contribution room only accumulates while you're a Canadian resident — non-residency years don't add room.

Tax situations vary case by case. In your first year, your departure year, or any year with property transactions, work with a Canadian accountant familiar with the Canada–Korea tax treaty.

Official guidance: CRA (Canada Revenue Agency), Revenu Québec