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| *The Commerce Journal>>>Canada Taxes |
Canadian citizen working in another country. One month on and one month off. Question concerning Canadian Tax? |
The company I work for pays my local taxes of the country of work - outside Canada. Yet I live in Canada 6 months of the year and I am a Canadian citizen working outside the country. I have not filled my taxes in Canada for the last three years. I not sure if I should file since I have no income in Canada. How will this affect me? Should I file even though I have no assets nor income in Canada? The issue of concern is residency, not citizenship. All Canadian residents are required to pay Canadian tax on their worldwide income. So the first thing you need to determine is whether you are a Canadian resident or a resident of the other country. Since it appears that you spend half your time in each country, then residency would be determined by such factors as whether you have a home in Canada, a spouse or common-law partner and dependants who stay in Canada while you are living abroad, personal property in Canada, such as a car or furniture, social ties in Canada, and economic ties in Canada. Assuming you are in fact a Canadian resident under the tax rules, then you are required to report all of your worldwide income on your Canadian tax return, even if you have no income from Canadian sources. As the previous answers noted, if the other country you work in has a tax treaty with Canada, then you would most likely be able to deduct foreign taxes paid as a credit offsetting your Canadian income taxes to avoid double taxation. If Canadian income tax rates are higher than the other country then you would have to pay the difference to the Canadian government. Also note that if your employer has paid your foreign taxes on your behalf, then these payments would also be considered to be taxable benefits, subject to Canadian income tax. Cross border tax issues are quite complex. I therefore recommend that you consult with an accountant who is experienced in these matters, as penalties for failing to report income can be severe. Source(s): http://www.cra-arc.gc.ca/tax/nonresident... http://www.cra-arc.gc.ca/tax/individuals... http://www.cra-arc.gc.ca/tax/individuals... That doesn't matter to Income Tax Canada.You have to claim all money earned outside and inside Canada.We are being taxed by 2 countries right now. being double taxed and hate it You would pay taxes in both countries if they have a tax treaty. What you pay in one country would offset the other and visa verse. Make sure you get an accountant in each country that understand inter-national tax laws though. |
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