Job Discussion Forums

[famous]

Hi,
I worked for AEON teaching English in Osaka, Japan a few years ago and I'm having issues with taxes. At the AEON interview they explained that people fill out the Canadian Revenue Agency form NR73 to determine your residential status. I realize that they're not tax experts, but they said that because almost all their people hired were recent graduates with very little ties to Canada that they will pay tax only in Japan. I fall into this category - no wife or kids, businesses or investments, etc only student debt - and I filled outthe NR73 a few months before leaving the country and I paid taxes in Japan. After I had been back in Canada a short while CRA sent me a notice saying that I now own them $11000 for the 18 months that I was out of the country working in Japan. I was under the impression that people paid taxes in Canada or Japan - not both. An accountant was provided more documentation thanks to the help of AEON and filed something with CRA to tell them something was wrong. So after almost a year CRA has come back with a reduced tax bill for me to pay (just over $4000) but it's still a lot to pay!

Has anyone had any similar experiences? Has anyone paid tax in both Canada and Japan while having minscule ties to Canada? The accountant said that he doesn't think that there are any other ways to reduce or eliminate the bill. Any ideas for ways that I can get CRA to drop the $4000 tax bill? Thanks for any help.

[Brooks]

you need less than 3 or 4 ties to Canada to get out of paying Canadian tax.

Ties include:
a credit card
a bank account
a driver's license
registered with the health system

So I guess Canada thinks you are not a non-resident.

[maccaliam]

While I certainly wouldn't claim to be a tax expert, I believe that almost any ties (student loans being one as far as i know) with Canada means you have to file canadian tax forms.
I don't know the deal between Japan and Canada, but I am working in Korea and I most certainly am required to pay taxes in both countries if I earn enough. My only ties are a bank account and a driver's license but I still have to file every year with Revenue Canada. Luckily, in Korea I don't actually have to pay any taxes in Canada because my total earnings are so low when converted back to Canadian dollars.

[JL]

Doesn't Canada have something similar to the U.S.'s Foreign Earned Income Exclusion? U.S. citizens and resident aliens, who meet requirements to declare residency in another country, must file a U.S. tax return, but may exclude the first $87,500 (plus housing expenses), which pretty much wipes out any tax burden for the majority of us. This exclusion use to be more narrowly defined (thank God for the statute of limitations ). But anyway, might Canada have something like this on the books for its citizens residing abroad?

[Brooks]

no, Canada doesn't. Their tax system is different.

[JL]

Hi Brooks.
Yes, I realize that its a completely separate tax regime. But America is notoriously known as "the only Western nation that taxes its citizens/residents on worldwide income". Not that misery enjoys company, but is it true that Canadians actually share this fate? I haven't slogged through it all, but the Convention between the Government of Canada and the Government of Japan has the sub-heading, "For the Avoidance of Double Taxation." Is not there some provision in there that will serve our desired purpose?

[Glenski]

[JL]

Glenski,
The "above post" you refer to me to read, is my own. But after an exclusion for the first $87,500, plus a housing allowance, American's must pay U.S. taxes on income, regardless of where their domicile is. Now what are YOU talking about?

[Hoser]

Well I haven't paid any taxes in Canada (including for interest on my mutual funds, etc) for about 4 years now! I hope they don't charge me with a big bill! Especially since I've been paying taxes over here.

[JL]

[Brooks]

http://forums.eslcafe.com/Korea/viewtopic.php?t=1698

that link doesn't work.
Anyway, look at the FAQ on the Korean Board and look at the sticky that starts with Money, Tax, etc.
Lots of Canadians live in Korea, and Canadian taxes comes up quite a bit as a topic. They do have something to gripe about.

[JL]

Well, I'm bowing out of this discussion since I don't have a dog in this fight. But one last parting question: would not Canadians in Korea and Canadians in Japan have separate circumstances, in that, there are separate reciprocal tax treaties for each case? Nevermind. Good luck, my friends from the Great White North, in sorting it all out.
http://www.youtube.com/watch?v=X-ZvAVcBIrQ&feature=related

[Hoser]

Take off, hoser!

[Glenski]

[Never Ceased To Be Amazed]

[quote="Glenski"]