Job Discussion Forums

[gadfly]

Merhaba Everyone: I was wondering what the tax deductions are like in Turkey on teaching income what the rate is. I am from Canada and I will be teaching in Turkey. Also I was wondering if you have to pay taxes on income from Turkey to the Canadian gov. If you are not living there does anyone know about the rules and regulations. Just thought I would ask.
Teskkurler Gadfly

[yaramaz]

I'm Canadian, and for the first time in my life I had to hire an accountant to do my taxes. Canadians seem to be pretty much the only people in the universe who have to pay taxes to their home country on foreign incomes when working overseas for a long time. Even if you are a non resident, you still have to file and you may have to pay.

The Turkey situation seems to be this: schools take off the taxes before you even realise they exist. If a school says you are getting $1200/month then, by gum, that's what you see (please correct me if I am wrong-- my experience is not universal). The school pays your taxes for you. This is a problem for Canadians who need to file a tax return (and you do-- I lived in the UK for several years, filed there, paid taxes there, and then returned to Canada to find myself owing a fortune because I didnt file there too for those years away). Revenue Canada will only give you the foreign tax credit if you file a return in the country where you were employed to show that you paid the correct amount of taxes and are not entitled to a refund there or obligated to pay further taxes. Once that is sorted, then they will figure out if you now owe Canada money. Sigh.

This is the tricky part. I have yet to figure out how to file a tax return in Turkey. My school was happy to print out an official signed and stamped school form stating income and taxes paid etc, but was adamant that since the school paid its taxes as a mass entity rather than for individual employees, then the government simply could not do this-- they would only be able to state the school's annual income and taxes paid, not individuals' details. Perhaps it is to hide shady accounting, perhaps it is true. In either situation, the lack of a turkish income tax return meant I couldnt claim tax credit which meant that even though I'd been paying taxes all year and had not been living or working in Canada at all, I still somehow owed Rev Canada almost $1000 on a $15 000 annual salary.

Soooo, in summary, I'd recommend talking to an accountant who knows something about international tax agreements. Mine is currently trying to convince them to give me my money back and not charge another $1000 for this year.

[scot47]

Check up if there is a "Dual Taxation Agreement". If there is you should only pay tax in one jurisdiction.

[dmb]

You are correct Yaramaz. Your school deducts tax for you. However, there are some dodgy places around. They might be economical with the truth. say your salary is 1500 dollars a month, they might say on the tax form(which you never see) that you only get paid 500 dollars hence they pay less tax!

[ghost]

If you are away from Canada for more than two years, you can claim `Canadian Non Residency Status.` To be eligible, you must not have ties to Canada. You should not have property there, or a bank account, for example. You should basically prove that you have severed all ties with Canada. Temporary employment overseas does not absolve someone from paying income tax in Canada. But if you think you will be overseas permanently for a good length of time it might be worth considering the non-residency route.

If you make less than a certain figure ($8000 Canadian?) you do not owe the Government anything. This was the case for Ghost after his 6 month stint in Turkey where he earned less than said amount.

For someone away for a long time, it would be better to become a non resident.

You can always become a resident again when you come back, even though it might take up to 3 months to get your medical benefits back, as is the case in Quebec.

[yaramaz]

Ghost, I'm currently looking into the non-resident option, though it too looks a bit complicated. I'll post the info after I've quizzed my accountant next week.

As for choosing non residency, several factors come in to play: I have a credit card tied to a Canadian bank account because Turkish banks have told me hey dont want to issue a foreigner with a card. I have a good chunk of savings tied to RRSPs. I have a drivrs license. I have plans to go back to school in the relatively-near future. I'd have to see how that impacts these issues before becoming a non resident. When I was away for several years in the late '90s and returned to find income tax chaos, I discovered that I also couldn't get medical in BC for a year. I had to pay full premiums as a no-resident, brutal on my non existant student income.

I don't know if Canada and Turkey have any sort of dual tax agreements. In fact, no one here seems to know what to do with my tax forms.

[ghost]

[yaramaz]

Ghost, a bank card is not a credit card. I have a bank card. That is not what I'm talking about. I was talking about credit cards. The banks I asked (including the one that gave me a bank card, Yapi Kredi) all said they won't issue foreigners with credit cards because in the past we have had the tendancy (they said) to rack up big debts and then bail. I like having a credit card on hand if I need one (visa, mastercard, etc) in case of emergency. That's why I keep my Canadian one.

Did you honestly think I spent 2 years with my salary hidden under my pillow?

[gelin]

I actually had several Turkish credit cards -- Isbankasi, Vakifbank, Citibank and Kocband -- so they do issue them to foreigners. I think if you had your school give their bank a call they'd probably accomodate you. Let me warn you, however, that closing bank accounts/credit cards is a nightmare in Turkey. I was assured the accounts were closed -- and then they weren't. Was a hassle.

[ghost]

[yaramaz]

Gelin, are you married to a Turk? And were you able to get the credit cards before the marriage if this was the case? They might think you are stable and more reliable if you are. The banks I asked were quite adamant that they wouldn't issue them to foreigners. Perhaps it was because I asked the Kayseri branches-- not many foreigners live there and few of them stay there more than a year or two. Perhaps I'll have more luck in Istanbul since I have to change banks anyway (Yapi Kredi told me that my Kayseri account is not automatically transferred to an Istanbul branch of the bank with my change of address. It must be closed down entirely and I must reaply in the new location. Strange bureaucracy).

Anyone know any good banks? Ones that are less likely to collapse in case of financial meltdown? Ones that can do foreign currencies, savings, and credit cards?

[FGT]

Yaramaz - you could try IsBank.

I have Sterling and TL accounts with Isbank in Izmir and last year they practically forced a credit card on me that I hadn't asked for and didn't want. A colleague was woken up one Sunday morning to sign for receipt of a credit card that she hadn't ordered! No reluctance to provide foreigners with cards there!

[dmb]

If you get your school or a turkish friend to take responsiblity(kefil) then you can get a credit card.

[yaramaz]

Weird! It must be Kayseri and its bizarre, insular ways then. The director of the bank was a member of my school's foundation-- and even with the school vouching for us they refused to grant us one. I tried at a few others as well, with the school's help, and was told that in Turkey crdit cards are off limit to yabancilar.

Nice to know I'm not the leper I thought I was.

[gelin]

No, yaramaz, I am single. I have lived in Turkey for 10 years, however. The school I worked for in Ankara vouched for me for Isbankasi and Vakif Bankasi, however. I got a Citibank one by myself -- no co-signers. I think the Garanti one that lets you earn miles for free tickets in THY is pretty good. I've had friends fly free a lot. Good luck.