Q: Benefit of giving gifts (donation) to a registered
The charity is highly virtuous act, helping poor and needy such as operating food banks, education, assistin building, maintaining places of worship and schools, providing couseling services for people in distress; operating a shelter etc. In Canada if you give a gift (donation) you may entitle for non-refundable income tax credit, which you can reduce your income taxes payable up to 52% of donation you made. If you would like benefit from this generous tax credits, your donations have to be made to a registered Canadian charity that will issue an official donation receipt. To confirm that such organization is a Canadian registered charity inquired their official name and registration number. You may further confirm the information by visiting the CRA (charity and giving) website look for Charity listing. This site also provide important information about the charity how your donation is being spend, the names of directors/Trustees of and its activities and programs and including the financial information of the organization . Instead of dropping your cash donation in collection boxes, consider giving donation once or twice by writing cheques payable or giving cash to a reputable charity’s administrator who will agree to acknowledge your gift and issue an official donation receipt. The Muslims may give their Zakat or sadqat (poor due) to certain local registered charity such as Amal-Centre pour Femmes, Jamiyyatu Falahi Almuslimin Human Concern International, several Darul Ulooms across Canada and many other charities and take advantage of generous tax benefits that can be further benefit to your less fortunate community and family members.
Q: Residency rules for Income Tax Purpose in Canada?
The residency for income tax purpose has nothing to do with your status as Canadian citizen or immigrant. Most people who live in Canada are resident for income tax purpose because they ordinary live in Canada and they have no or insignificant tie with any other country. The Non-residents individuals for tax purposes in Canada are those who normally, customarily, or routinely live in another country and do not have significant residential ties in Canada; and they live outside Canada throughout the tax year; or stay in Canada for less than 183 days in the tax year. The residents of Canada are require to declare their world-wide income from all sources in a tax year whereas the non-residents are require to declare only income they earn in Canada in a tax year. The significant residential ties in Canada may include, if you have a home, rented or owned, in Canada or a spouse or dependants who stayed in Canada or own personal property in Canada, such as a car or furniture; or significant social ties in Canada have a Canadian driver’s license or Canadian bank accounts or credit cards or health insurance For example if you are working outside Canada and you have significant residential ties such as your spouse and dependants, staying in Canada or you owned property in Canada. You well may be resident of Canada and you may require to declare your world-wide income in Canada, however, you may be entitled for the foreign tax credits for taxes (including contribution made related your employment or business or profession) you paid on any income earned outside Canada. The tax laws also provide deeming rules for residents and non-residents. A deemed resident for tax purpose for the an entire tax year if any individual stay in Canada more than 182 days in a tax year, although, do not have significant residential ties with Canada; but considered a resident of another country under the terms of a tax treaty that Canada has with another country. Any Canadian government employee, a member of the Canadian Forces or their overseas school staff, or working under a Canadian International Development Agency (CIDA) assistance program who lived outside Canada during the tax year are automatic resident of Canada for tax purpose. If you are a factual resident of Canada and a resident of another country with which Canada has a tax treaty, you may be considered a deemed non-resident of Canada for tax purposes. Generally, the Tax treaties between Canada and other countries provide tiebreaker rules where an individual may be resident of both countries.