Job Discussion Forums

[memorabilis]

My dad works for the CRA. He did a lot of checking into this before I came to India.

The information that was passed by Schwa and Celeste is correct. You need to determine three things: does Canada have a tax treaty with the country you're moving to? (most likely it does, as most countries do), and what is the tax rate you'll be paying there?, and finally what is the rate you would be charge if you were making an equivalent amount in Canada.

In india, I am being taxed at 33%. I make around $15 000 a year here. If I were making 15k in Canada, I would be taxed at 22% (for amounts over the basic exemption). This being the case, I will certainly file a return. I won't have to pay anything, because I paid more to India than I would have to Canada. (I can also keep my OHIP coverage - I had it extended for the duration of my contract).

If the tax rate is lower in the country you're working in, you should try to get the exemption. There is actually an international tax office you can call. I don't have the number, but I talked with them to get help in filling out the non-residency form before I figured out I didn't have to.

[ls650]

So when you file your taxes, how do you claim the taxes paid in India? Do you simply include a receipt from your employer and tell the CRA "Look, I already paid $xxxx in tax to India" and cliam that as a tax credit?

[some waygug-in]

I don't know about keeping resedency status. I simply claimed "non- resident for tax puposes" on my tax form for the first year that I was away. The gov accepted it and had me pay taxes for the part of the year that I was still in Canada. I was told I didn't have to file a return since then. That was 5 years ago.

I still have a Canadian bank account, mailing address, credit card, but I own no property.

The rules are not clear and it seems that revenue Canada judges these things on a case-by-case basis. So even if it worked for me, it may not work for you. It depends on who you talk to, what mood they are in, and how much they really know about it.

Clear as mud?

If I ever return to Canada (to live that is), I would have to re-apply for residency, and would have no medical coverage until such time as I became a resident again.

Anyway, go to the government site and read the rules. The more I read them, the more confused I got. I don't know if anyone in Revenue Canada would even be able to explain it to you because they don't have a clue. I doubt that anyone there really understands how these rules are to be applied to people in our situation.

One thing I do know, if you are only doing this short-term (1 or 2 years) you probably have to remain a factual resident for tax purposes. If you are planning on staying out of Canada long term, you can claim non-residency right away. (but if you return within 5 years, the gov may want to check into your situation)

I hope this helps.

[ls650]

I sent a form for non-residency off about 5 weeks ago by registered mail, and haven't heard a peep. I phoned the Int'l Tax Services Office in Ottawa last night to ask them what exactly the deal is. I had 20 minute discussion with a fellow there who sounded reasonably knowledgable.

The problem is that the various tax guides are written assuming that you either live primarily in Canada, or that you are overseas temporarily and will return in the foreseeable future. They simply don't consider the case of someone moving permanently or for a long time overseas. (Perhaps they think no one would actually want to permanently leave the 'paradise' that is Canada... )

If you have cut off your ties with Canada (you don't own any property there, you don't have Canadian medical coverage, you have no income earned in Canada, etc.) then you are considered a non-resident and do not have to pay tax to Canada on your foreign income. If you DO have substantial ties - or you plan to return in the near future - then you are still considered a resident and have to pay taxes accordingly.

The form is not necessary; it's merely a request for their opinion on your status and is not legally-binding.

If you are outside Canada/USA, you can phone them at (613) 952-3741. You can find more contact info at http://www.cra-arc.gc.ca/contact/international-e.html