Job Discussion Forums

springdruidess · Joined: 29 May 2003 Posts: 2 Location: Calgary, AB

Hi All! I'm a recently graduated BA (psychology) from Alberta who is getting ready to start a TESOL course this week. I've been looking through the job postings and messages on this site and have a question regarding income taxes. Might be a silly question, but oh well... When I head overseas to teach (hoping to head into Asia somewhere), do I end up paying income tax in the country I'm teaching in as well as in Canada? I'm thinking that will eat up a pretty big chunk of what I make, so if I don't have to, that would be great. If anyone has ideas/answers/suggestions I would really appreciate it.

Thanks! Smile

dudette · Joined: 27 Feb 2003 Posts: 72 Location: Ontario, Canada

Hi, SD:

I'm teaching in China and am originally from Ontario. Canada has a tax agreement with China whereby you do not have to declare your income earned in China on your Canadian tax return, however, if you're legal in China, you'll have to pay the tax here, which is much less than in Canada (6%, I think). Hope this helps!

Cheers!

foster · Joined: 07 Feb 2003 Posts: 485 Location: Honkers, SARS

I applied for Non-resident status in Canada before leaving. You must leave Canada for 2 years to get the full benefit of this.

I am in Japan and I pay nothing on what I earn here. I had to file the first year I was here because half of my year was in Canada...but I did not need to report my earnings from Japan.

If the country has a tax treaty with Canada, you are ok. Otherwise, honestly, I am not sure what happens.

Roger · Joined: 19 Jan 2003 Posts: 9138

To Dudette,
income in CHina below 4000 RMB is taxfree, and above it is in theory subject to a 10% salary tax that your employer must deduct. For higher salaries, the tax rate increases substantially although teachers probably never pay more than 20%.
If you pay only 6%, then this is not the legal national rate; it may be a local tax.
And, by the way, you should ask for a tax receipt, and keep it in order to produce it upon reqeust by the Immigration at the point of your exit!

dudette · Joined: 27 Feb 2003 Posts: 72 Location: Ontario, Canada

Hi, Roger!

Thanks for confirming the 4000 threshhold - I was sure that I had read that somewhere, but it seems that every person that you talk to insists that what THEY heard is the correct figure. And thanks for the clarification on the tax. Again everybody says something different, and I'm not subject to tax at present so didn't really pay much attention to it.

Hey, I just had a terrific idea! You always have such good advice. You should start a website, ExPat Expertise, or something like that, where ALL of our questions can be answered in one place! No more going to "this" website for tax information, and "that" website for visa information and "t'other" website for contract tips, etc. Laughing

Thanks again!
Cheers!
dudette

Gordon · Joined: 28 Jan 2003 Posts: 5309 Location: Japan

Foster is correct, you need to be a non-resident to not pay taxes from income earned in Canada. 2 years out of the country seems to be the magic number, but the Cdn govt could make it longer if they want. Call Canada Customs first before you leave, the application for non-residency is lengthy and they were helpful to me (must have caught them on an off-day). If you only want to be out of the country for a year, don't bother applying.