Job Discussion Forums

[rbell]

I am going to Japan to teach with Nova later this year. I have a question about taxation. If I become a Japanese resident for my year abroad, do I still have to pay Canadian taxes on my income in Japan? (Because I will have already payed Japan income taxes.) Are there any serious implications to relinquishing my Canadian residency status for the year? ie. health care coverage. Thanks!!

[craven]

Canada has a tax treaty with Japan...you can't be taxed for any income received from overseas. You may, however, want to make sure you have as few ties to Canada as possible (bank accounts, credit cards, cars, houses), so there's no confusion as to where you live.

[JimDunlop2]

[Celeste]

If you are a non-resident of Canada, you cannot have Canadian health insurance (you are not paying taxes to Canada, so you don't get any benefits like health care or free school for your kids for that time). If you are a resident of Canada who is working abroad, you are still required to pay Canadian txes on your worldwide income. The amount you paid in taxes to the Japanese governement will be taken into account, but you will still end up owing to revenue Canada. The best thing to do is to declare yourself a non-resident and set yourself up with Japanese health insurance or private health insurance when you are here. (There are many threads on which is better, shakai-hoken or private insurance, but that is a whole other debate!)

For more information about non-residency check here:
http://www.cra-arc.gc.ca/tax/nonresidents/individuals/nonres-e.html#a

[rbell]

Thats great! I intend to apply for Japanese residency status once I get to Japan. When I come back to Canada will it be easy to become a resident again or are there any penalties?
Appreciate your help!

[Mike L.]

Why not call Revenue Canada and figure this one out?

Or do a search there have been numerous posts on this one in the past.

IMO you'd have to be a fool to live in Japan and pay Canadian taxes.

[miratingbird]

I had Canadian friends who got hit with massive tax bills in Japan. Other Canadian friends I had simply didn't tell that they were employed in Japan (they were just "travelling") and paid zero. I'm not advocating either, just letting you know what others have done...

[JimDunlop2]

To the OP: there is no such thing as "applying for Japanese residency status" when you get to Japan. What you mean to get is a working visa which is a permit to stay and work in the country for the duration of the visa.

Japanese residency requires that you live in the country for a minimum of 10 years before they will even consider you (5 if you have a Japanese spouse).

You can lose/get rid of your Canadian residency (has nothing to do with your citizenship) but that doesn't mean you will be acquiring Japanese residency, as such. Immigration works a lot different in this country.

If you are planning on coming to Japan for 1 year only, you may not likely be able to declare non-residency so easily. The Canadian government doesn't take non-residency lightly (they lose out on tons of money if they let just anyone do it)... You will still be required to file even when you are here (due to the retroactive nature of taxation). Only in your second year would you not be required to file if you have been deemed a non-resident.

As for getting non-residency, Gordon and I have an active disagreement on this. My opinion is that if you try to pull the same "non-residency" act on any future trips, it may well be denied you. I know one person to whom this has happened... Yes, they ended up with a rather large tax bill.... He says that he has successfully been able to secure non-residency more than once. But I don't know what the specfic circumstances were to do that.

[Mike L.]

[Gordon]

Mike,
You may tell Revenue Canada you will be overseas for good, get non-residency and then return after 1 year and Canada Revenue will change your status. They can change your status at will.
Yes, Jim and I disagree regarding the number of times one can be a non-resident, primarily because this the second time I've been a non-rez.

There are so many threads on non residency in many of the forums. Perhaps Jim will do a search for you.

[Mike L.]

[Gordon]

[Mike L.]

I wouldn't bother aplying either for one year but leaving the possiblity open is a good idea.

I'd still like to know who says they are only going to be in Japan for one year?

I had a 2 year plan and well almost 6 years later...

Regardless, if you've paid your taxes in Japaan then you'll owe nothing to the Canadian government.

You don't have to file either.

[annanaeko]

How much is the Japan Tax rate?

[Gordon]