Study permit holders — what should I check first?

A permit to study is an immigration document; it decides nothing about tax. Your position depends on your ties, your day-counts and whichever treaty article covers you, and a student can end up resident, non-resident or an exempt individual on the same permit. Each of those routes has a different return. Filing is also how the exemptions and the credits are claimed, because nothing is applied to you automatically on the strength of being a student. So the answer is usually yes, and the useful question is which return, not whether.

Scholarship money is the item most often assumed to sit outside the system, and treaty articles do in some cases exempt it, along with limited employment income earned while studying. But the exemption is a claim, not a default: it is made on a return, with the article identified and the facts that satisfy it recorded. Where no return is filed, the money is simply unreported income sitting against your name. Check which article reaches your grant before deciding how the grant is presented on the return.

In some systems days present as a student are left out of the count that would otherwise make you resident, which is why two people with identical calendars can land in different places. The exclusion is not universal and it is not permanent; it turns on your status during each period and on the records that prove it. Keep entry and exit evidence, enrolment letters and the dates your status changed, because the day-count is reconstructed from documents rather than from memory when anyone asks about it.

Often yes, and this is the reason students who owe nothing should still file. Benefit and credit entitlements are assessed from filed returns, so a year that is never filed is a year that cannot be assessed, and the entitlement for it is not recovered by filing something else later. The same return also fixes your residency position on the record for that year, which matters when you later change status. A return showing little or no tax is how both of those things get protected.

Deductions at source start with the work; they do not wait for anyone to settle your residency. That is normal and it is not the end of the matter. If a treaty article exempts limited employment income in your circumstances, the exemption is claimed on the return and the amount withheld is dealt with there. If no article reaches it, the earnings are taxed on the footing your status gives them. Either way the return is where the deduction and your actual position are reconciled, so keep every slip your employer issues.

The change of status can change your tax route in the middle of a year, and the return has to carry both parts of it. Days that were left out of a count while you studied may not be left out afterwards, ties that were thin as a student thicken quickly once employment starts, and a treaty article that reached your scholarship will not reach a salary. Treat the date your status changed as a hard line in your records and keep the documents on each side of it separately.

None of it is tax-free for being foreign. A Canadian resident is taxed on worldwide income, so foreign salary, interest, dividends, rent and gains all go on the return, converted to Canadian dollars. What genuinely reduces the bill is the basic personal amount, the credit for foreign tax already paid, and any treaty article that exempts a specific type of income. The reporting thresholds people have in mind — the foreign property statement, for one — govern reporting, not exemption. See the foreign tax credit.

Only up to your own country's tax on that same income, and only for tax you were legally obliged to pay. Two consequences follow. Living somewhere that taxes you more heavily than your residence country does leaves an excess that becomes a carryover rather than a refund. And withholding suffered above the treaty rate is not creditable — the route back to that money is a refund claim in the country that took it. See claiming the credit.