Site Search:
 
TEFL International Supports Dave's ESL Cafe
TEFL Courses, TESOL Course, English Teaching Jobs - TEFL International
Korean Job Discussion Forums Forum Index Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 

Canadian Taxes for expats
Goto page 1, 2, 3, 4, 5  Next
 
Post new topic   Reply to topic    Korean Job Discussion Forums Forum Index -> FAQ
View previous topic :: View next topic  
Author Message
Circus Monkey



Joined: 10 Jan 2003
Location: In my coconut tree

PostPosted: Sun Mar 02, 2003 5:00 am    Post subject: Canadian Taxes for expats Reply with quote

Hi everyone. These questions were posed to me by Tancred and I thought it would be good for everyone to take a look and post their advice:

1) Do I have to declare the income that i'm making here in korea on my tax forms?
2) Is there any way for them to verify it if i decide to tell them that i simply wasn't working for a year, or working for less money or something?
3) And finally, if i do declare this as income, will i then be eligible for employment insurance when i go back home?

CM
Back to top
View user's profile Send private message
The Lemon



Joined: 11 Jan 2003

PostPosted: Tue Mar 04, 2003 5:32 am    Post subject: Cdn Nonresidency: The Mouldy Oldie of Dave's ESL Reply with quote

Here's a post I made last fall on the old board. I believe what I wrote then still applies. I'm going to make it a sticky, as it's one of the most frequently asked questions on this board year-round, and especially at this time of year.

By the way, I'm guessing on this but I think there's no chance that you can collect unemployment in Canada based on your working in Korea. I don't think many hogwons or their teachers pay into EI. Wink
Lemon.
_____________________________________________

Many of the Canadian teachers who come to Korea have never been outside the country on their own before, and know nothing about the Canadian laws governing their tax status. Very very few of them actually bother reading the actual Canadian Customs and Revenue Agency regulations, which would tell them they don't actually need to "file" for non-residency status, if they meet the listed requirements. All the filing does is solicit the CCRA's opinion.

Much information that has been given on Dave's ESL has been misleading, or completely wrong. The CCRA looks at each case individually, so there's no concrete "checklist" of ties, but rather a balance of factors. To make things even murkier, the CCRA recently issued a new "bulletin" describing how they're going to interpret the laws, which are based on Supreme Court rulings. Many things we all used to "know" are now false.

Here's a run-down of the new rules, or more correctly, CCRA's new "interpretation" of the rules.

1. Bye-bye "two-year rule"
This is the biggest change. You'll still see people advice given here that if you're away for two years and have severed all ties, you're good. Not so: this had been the case since 1980, but the two-year rule was abandoned by the CCRA in December 2001. While this means you can now be a non-resident for a shorter span than two years, the downside is they'll put a greater weight on what ties you still have than they used to, if you have any.

2. Primary ties
These are things like your principal dwelling (ie a house or apartment), and property you might rent out. They also include your family (meaning, a spouse and kids, not your siblings or mom and dad). If you retain any of these, you'll likely have to pay income tax on what you make in Korea.

3. Secondary ties
These are of lesser importance, although many people get really worked up over them. The CCRA will consider these secondary ties together, not individually. They include union memberships, Canadian bank accounts and credit cards, maintenance of your provincial health insurance, a Canadian drivers license, owning a cottage or a car, how long or frequent your visits back to Canada are, and more.

They'll also consider whether you intended to return to Canada to live, and what your residential status is here in Korea.

PLEASE - don't rely on my interpretation - check the original document out (IT-221R3) carefully for yourself.
A copy is at: http://www.taxca.com/221R3.htm

If you find it too dense, try this Canadian Residents Abroad article detailing the changes.


Last edited by The Lemon on Mon Dec 12, 2005 4:10 pm; edited 1 time in total
Back to top
View user's profile Send private message
Tancred



Joined: 15 Jan 2003
Location: Upon a mountain in unknown Kadath

PostPosted: Wed Mar 05, 2003 6:32 am    Post subject: Reply with quote

thanks for the info lemon...i wonder though...if one was so inclined, could they simply whisk themselves back into canada under the noses of the CCRA and just say that they've been living in canada, unemployed, and at their parents, for the past year? would that fly or is that risky business? i've already been audited by the income tax people once so i'm not too concerned about it happening again, but is there anyway they would be able to verify this?

thanks again...
Back to top
View user's profile Send private message Send e-mail
BTM



Joined: 20 Jan 2003
Location: Back in the saddle.

PostPosted: Wed Mar 05, 2003 9:58 pm    Post subject: Reply with quote

Good post, Lemon. Thanks.
Back to top
View user's profile Send private message Visit poster's website
CdnTeacher



Joined: 29 Jan 2003

PostPosted: Sat Mar 08, 2003 6:49 pm    Post subject: Reply with quote

Thanks for the post, but you really don't explain anything. I'm still wondering if I would have to decalre my income. Anyone want to reply that actually done it? Or been there?
Back to top
View user's profile Send private message
The Lemon



Joined: 11 Jan 2003

PostPosted: Sat Mar 08, 2003 10:55 pm    Post subject: Reply with quote

The post answers your question as best as it can, as it depends on your personal situation. Here's an overly-simplistic take on the rules - if you have "primary" ties to Canada, or intend to return "home" to Canada to live anytime soon, then you may very well have to report your Korean income.

You'll need to either read the rules carefully, keeping in mind your personal case, or ask a lawyer or accountant who will do it for you.
Back to top
View user's profile Send private message
some waygug-in



Joined: 25 Jan 2003

PostPosted: Tue Mar 11, 2003 4:45 pm    Post subject: Reply with quote

I like your post. Thanks, but I disagree with one part. You don't have to file for non- residency. You can simply claim non-residency for tax purposes on your income-tax form for the first year you are out of the country. You have to be out for more than 180 days during that tax year. Of course, all the rules regarding ties still apply. You just file your tax form, and if the government accepts it, voila. You are a non- resident. If you are planning on returning to Canada to live, you may and quite probably will have some problems, but if your plan is to stay out of Canada, then you are home free.
I hope this helps
Some waygug-in
Back to top
View user's profile Send private message
mrroboto



Joined: 29 Mar 2003

PostPosted: Thu Apr 17, 2003 4:32 am    Post subject: Reply with quote

What happens if I just don't do anything about it this year? I think I'm probably scheduled to get money back, as I was working in Quebec and living in Ontario (Ottawa/Hull), but my parents aren't interested in taking any action and I guess I'm probably too late.
Back to top
View user's profile Send private message
The Lemon



Joined: 11 Jan 2003

PostPosted: Thu Apr 17, 2003 4:43 am    Post subject: Reply with quote

Quote:
I think I'm probably scheduled to get money back, as I was working in Quebec and living in Ontario (Ottawa/Hull), but my parents aren't interested in taking any action and I guess I'm probably too late.


I was once in the same situation. Basically, if they owe you, you can file later on and they'll still give you your refund. At least, I had no problems, though that was a few years ago.
Back to top
View user's profile Send private message
chrisbem1



Joined: 14 Apr 2003
Location: south korea

PostPosted: Thu May 01, 2003 6:10 am    Post subject: Reply with quote

Ok, here it is. I worked for the CCRA for a year and a half before moving to Korea (which might explain why I'm here), so I think that I can help a bit, although I would agree with Lemon -check it out for yourself as it does vary widely from case to case. This wasn't really my area of expertise, so I'll stick to what I know and not speculate.

If you have ANY primary ties (i.e. children, spouse, etc.) in Canada then you have to file. Reason being they don't want someone over here making stacks of cash they are sending home while the wife is back home collecting social service cheques, skipping child support payments, etc.

If you owe or have to pay income tax, you can a file a return up to five years after the fact (remember those HR Block commercials where they offer to look over last years' return and get you more $ back), so even if you are owed money, you can file when (if) you return to Canada and still receive a refund. If you owe money, then you will have to pay interest. If they owe you money, you don't get interest as it's your responsibility to file.

As far as declaring non-resident status, the advantages and disadvantages of both really vary widely case by case, so I would suggest that you really check it out for yourself before making a decision.

Collecting unemployment isn't going to happen unless you and your school have been paying into the Canadian unemployment system while you have been here, which is pretty much impossible. EI is based on $ earned over number of weeks of insurable earnings, so that's pretty much out as none of your earnings here are insurable in Canada. You can however return to Canada and collect general social assistance (welfare) upon arrival in Canada, but I would recommend that if you are heading back you just try to find a job if that's your plan.
Back to top
View user's profile Send private message
eddo



Joined: 16 May 2003

PostPosted: Sun May 18, 2003 5:36 pm    Post subject: Reply with quote

All this information is helpful, but I have some questions that I'm sure many other Canadians here in Korea have.
I've read the information about the resident/non-resident status. And I seem to be stuck in the middle about what to do. I make a salary from a hogwon and I do private lessons. I don't have any primary ties to Canada but I have some secondary ties which may make me a resident. I have been in Korea about a year.
Suppose I file as a resident, what documents, if any, do I need to show to the government of my income here? A copy of my contract? Something official from the Korean government? Would they want to see my Korean account book? Would the Canadian government even bother asking for any?
Can, and will, the government track my financial transactions here in Korea? I have wired money from my account here to my account in Canada.
It all seems so complicated right now. I don't mind paying the Canadian government some tax money but what sort of records do I have to chase after? And is there any way they can find out about my tutoring income by checking out my account here?
Suppose I don't mention that I worked for a hogwon at all and I just did some privates here?
I guess what I'm asking is, how much will they bother checking out? Do they just take your word for it or are supporting documents necessary? And what documents? And what if my hogwon hasn't reported me properly?
Any information would be greatly appreciated.
Thank you.
Back to top
View user's profile Send private message
Howard Roark



Joined: 02 Feb 2003
Location: Canada

PostPosted: Mon Jun 02, 2003 4:46 am    Post subject: Reply with quote

i dealt with this problem recently. i called international tax services, a branch of revenue canada. i don't have the number now, but i got it from revenue canada and i called collect and spoke to a woman for quite a while. she explained about the "ties to canada" everyone seems to know about. however, one thing that may cause a problem that i have never heard anyone mention is this:

she told me that to be considered a non-resident of canada you must be considered a resident of another country. you have to be a resident somwhere. every country has different definitions of a resident. for example to be a "resident" of france you have to be there for 3 months, some countries will never define you as a resident unless you were born there. anyhow, the lady i talked to told me i had to find out how the korean govt defines a "resident of korea". i found several websites that stated a resident of korea was anyone residing in the country for at least a year. so the woman told me i could not claim non-resident status because i was not considered a resident of korea, since i was here a bit shy of a year.

on these websites it did not state whether a work visa/alien card makes you a resident, regardless of duration. my friend believes this made her a resident of korea and she filed according to that. however, i found nothing to support this.

also, for anyone who may be thinking of not claiming their korean income, korea and canada have a tax treaty. that means they match up names of tax payers in canada and canadian workers in korea. it takes a long time, sometimes 2 or 3 years, but you will be caught eventually. and you will have to pay interest on whatever taxes you would have owed to the canadian govt.

one benefit of the tax treaty is that whatever taxes you pay in korea you don't have to pay in canada. for example if you fall into a 25% tax bracket in canada and you already paid 4% in korea, you will only have to pay 21% in canada. you must have proof though of the taxes you paid in korea. this is part of your personal tax information and the canadian govt cannot get the info for you.

like i said, i got this from international tax services, i'm not claiming any of it is accurate.
Back to top
View user's profile Send private message
ishiii



Joined: 08 Apr 2003

PostPosted: Tue Jun 17, 2003 4:07 am    Post subject: Reply with quote

Can someone with first hand knowledge please make a posting.
When did you file?
Did you have any primary ties?
Secondry ties, which?
Did you claim all your income?
And
What percentage of tax did you pay.
I have been tryen to find info but it is a per case system.

I have no primary ties
Student loan
Bank account and drivers license.
I will be in korea for over one year, so Ill have resedence status, in korea.
What % can I expect to the canadian goverment if I claim all 21 millon won on my tax return?

Any examples would be greatly appreciated
Back to top
View user's profile Send private message
chalkdust_torture



Joined: 06 May 2003

PostPosted: Wed Dec 10, 2003 3:19 am    Post subject: Reply with quote

any followups?
I'm trying to get it straightened away now.
Surely with all the Canadians here someone must know the real deal.
Back to top
View user's profile Send private message
Mr. Pink



Joined: 21 Oct 2003
Location: China

PostPosted: Wed Dec 10, 2003 3:34 am    Post subject: Reply with quote

Well I know this:

In the last year they changed the form from "Declaring non-residency" to "Finding out your status - non-resident/resident"

I just filed that form like a week ago. Been in Korea for 7yrs, never sent them anything. No tax forms etc.

I will be curious to what they say, basically I filled it out saying I won't ever return to Canada. Which is probably true. I see myself working in a warmer place - climate wise.

If they ever expect me to pay taxes, that will be pretty damn funny. If they don't backdate non-residence status anymore, guess I have some creative lying to do.

"I was busted for drug use and have been in a Korean jail for 7 years..."
or
"The Korean mafia has been holding me a slave, the government JUST freed me, but since I have a wife I can't leave..."

or some other crazy ass story Smile

Once they let me know, I will post an update. I faxed it, so curious how fast they will respond.
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic    Korean Job Discussion Forums Forum Index -> FAQ All times are GMT - 8 Hours
Goto page 1, 2, 3, 4, 5  Next
Page 1 of 5

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


This page is maintained by the one and only Dave Sperling.
Contact Dave's ESL Cafe
Copyright © 2013 Dave Sperling. All Rights Reserved.

Powered by phpBB © 2001, 2002 phpBB Group

TEFL International Supports Dave's ESL Cafe
TEFL Courses, TESOL Course, English Teaching Jobs - TEFL International