DO YOU ALWAYS NEED TO FILE A TAX RETURN?
Of course, the simple answer is no. Normally, you do not have to file a tax return for the year if you have no income tax payable for the year. (Note that having no tax payable at year-end because of source withholdings does not get you out of a filing obligation. For this purpose, "tax payable" includes amounts you have already paid or that were withheld from payments to you.)
However, even if you have no tax payable, you may need to file a return for the year. For example, you must file a return if you have a taxable capital gain in the year or dispose of capital property in the year. You must file if the CRA sends you a demand to file a return. You must file a return if you have withdrawn money from your registered retirement savings plan (“RRSP”) under the Home Buyers’ plan or Lifelong Learning Plan and have an outstanding balance payable in respect of the repayment of those amounts to your RRSP.
Furthermore, even if you are not required to file a tax return, in many cases it is beneficial to do so.
For example, if you are entitled to a tax refund for the year, you need to file a return. This could occur where tax was withheld from your salary or wages, but you did not end up owing tax for the year, meaning that the withheld tax will be refunded to you. It could also occur where you paid some tax instalments for the year, but you ended up having no tax payable for the year.
You should also file if you wish to claim a refundable tax credit. You may want to claim the GST/HST Credit that applies to low-income individuals or families. You may want to receive the Canada Child Benefit. In these circumstances, even though you are not required to file a tax return, you obviously should.