Job Discussion Forums

[tradinup]

Does anyone here pay taxes to Canada while working in China?

[yamahuh]

I could be seriously mis-informed here, and I've no doubt that somebody will set me straight if I am.
My understanding of this is that, if you are out of the country (Canada) for more than 183 days then you are not expected to pay taxes on income made overseas.
Anyone else have some info on this topic?

[Sinobear]

Indeed. You must declare yourself "Non-Resident" of Canada in order to be freed of your obligation to declare taxes back in Canada so long as you are out of Canada for 2 years plus a day.
Go to RevCan's website (I already did my homework, now you do yours!) and you can download the pdf form with all the related nastiness (you cannot have any substantial holdings or interest bearing accounts, no property, no motorcars, not a single luxury, like Robinson Carusoe you're as...s**t! There's a song in my head.)


Cheers!
Well, I guess Christmas is near enough...
http://www.cra-arc.gc.ca/tax/nonresidents/individuals/nonres-e.html

[tradinup]

Here's the brunt of the qualifications they require:

Factual Residence -- Leaving Canada
Residential Ties In Canada
� 4. The most important factor to be considered in determining whether or not an individual leaving Canada remains resident in Canada for tax purposes is whether or not the individual maintains residential ties with Canada while he or she is abroad. While the residence status of an individual can only be determined on a case by case basis after taking into consideration all of the relevant facts, generally, unless an individual severs all significant residential ties with Canada upon leaving Canada, the individual will continue to be a factual resident of Canada and subject to Canadian tax on his or her worldwide income.

� 5. The residential ties of an individual that will almost always be significant residential ties for the purpose of determining residence status are the individual's

(a) dwelling place (or places),

(b) spouse or common-law partner, and

(c) dependants.

� 6. Where an individual who leaves Canada keeps a dwelling place in Canada (whether owned or leased), available for his or her occupation, that dwelling place will be considered to be a significant residential tie with Canada during the individual's stay abroad. However, if an individual leases a dwelling place located in Canada to a third party on arm's length terms and conditions, the CCRA will take into account all of the circumstances of the situation (including the relationship between the individual and the third party, the real estate market at the time of the individual's departure from Canada, and the purpose of the stay abroad), and may not consider the dwelling place to be a significant residential tie with Canada except when taken together with other residential ties (see � 17 for an example of this situation and see � 9 for a discussion of the significance of secondary residential ties).

� 7. If an individual who is married or cohabiting with a common-law partner leaves Canada, but his or her spouse or common-law partner remains in Canada, then that spouse or common-law partner will usually be a significant residential tie with Canada during the individual's absence from Canada. Similarly, if an individual with dependants leaves Canada, but his or her dependants remain behind, then those dependants will usually be considered to be a significant residential tie with Canada while the individual is abroad. Where an individual was living separate and apart from his or her spouse or common-law partner prior to leaving Canada, by reason of a breakdown of their marriage or common-law partnership, that spouse or common-law partner will not be considered to be a significant tie with Canada.

� 8. Generally, secondary residential ties must be looked at collectively in order to evaluate the significance of any one such tie, therefore, it would be unusual for a single secondary residential tie with Canada to be sufficient in and by itself to lead to a determination that an individual is factually resident in Canada while abroad. Secondary residential ties that will be taken into account in determining the residence status of an individual while outside Canada are

(a) personal property in Canada (such as furniture, clothing, automobiles and recreational vehicles),

(b) social ties with Canada (such as memberships in Canadian recreational and religious organizations),

(c) economic ties with Canada (such as employment with a Canadian employer and active involvement in a Canadian business, and Canadian bank accounts, retirement savings plans, credit cards, and securities accounts),

(d) landed immigrant status or appropriate work permits in Canada,

(e) hospitalization and medical insurance coverage from a province or territory of Canada,

(f) a driver's license from a province or territory of Canada,

(g) a vehicle registered in a province or territory of Canada,

(h) a seasonal dwelling place in Canada or a leased dwelling place referred to in � 6,

(i) a Canadian passport, and

(j) memberships in Canadian unions or professional organizations.

� 9. Other residential ties that the Courts have considered in determining the residence status of an individual while outside Canada, and which may be taken into account by the CCRA, include the retention of a Canadian mailing address, post office box, or safety deposit box, personal stationery (including business cards) showing a Canadian address, telephone listings in Canada, and local (Canadian) newspaper and magazine subscriptions. These residential ties are generally of limited importance except when taken together with other residential ties, or with other factors such as those described in � 10.

[yamahuh]

As usual, you are a wealth of information Sinobear

[tradinup]

No, I read the cr*p for about half an hour and concluded this;

The two year thing is no longer... (unless I missed something)

If you have worked for more than 183 days in China during a tax year (Jan 1 - Dec 31) then you can apply for non-resident status, which exempts you from paying taxes on monies not earned in Canada or from Canadian employers. Of course, if in the other 183 days you did do some work in Canada you have to claim that, but not the China income.

So if you haven't got approved yet for the non-residency but have only lived in China and made money there during 2004 I would probably just not submit a tax return. They even say you can do this. Of course you don't have all the paperwork in yet, but who cares, they have nothing on you really... Get all the paperwork done in due time though.

[Sinobear]

At the time I declared myself non-resident of the Country of Quebec (1998), you could only be considered "non-resident for tax purposes" if you were out of the homeland for a period of two years plus a day (with all the other stipulations thrown in to boot). If you repatriate only after, let's say 2 years and 23 hours, the wonderful people at RevCan (I noticed they've changed their name) could go after you for taxes owed.

Like the new 2004 Simplified Personal Income Tax Form (phuch*em0000)

1. Fill in the amount earned in 2004 here _______________.
2. Send us whatever we forgot to take already.


Cheers!

[tarzaninchina]

Canada has a tax treaty with China, so that clears up a lot. To be declared a non-resident, you need to fill out a form showing you'll be out of Canada for a year with very little tying you to the country. Again, they ask for an expected date of return, so whatever. Opting for an absence in your provincial health plan is more involved and should definitely be done a month or two before leaving (as well as before submitting the non-resdiency paperwork).

Generally, you mail the form a day or two before you jet and they mail you the good news here in China.

If you return, but plan on leaving Canda again (e.g. at the end of the summer), you need not worry. If you stay in Canada for 6 months or more, then you need to be declared as a resident for those six months, otherwise stay off the radar and don't make millions during a short visit home. You can be a residnet of Canada for part of a tax year (i.e. from your re-entry date).

If you neglect this process, it probably wouldn't matter too much because you could show RevCan tax slips from China and woth the tax treaty, they'd probably forgive it. I took the official route to not have to worry about this.

Good link to include SinoBear, everything can be found there.

[Long ai gu]

Declare nothing, don't ask questions, keep your mouth shut. When you enter Canada and they ask you what you were doing say:" I was a volunteer Teacher in China", they have to prove that you weren't. The Canadian goverment takes over 50% of a wage earners money in Canada with income tax 27-50%, sales tax 7-8%, GST-15%--it's no different from the King's tax collectors in ancient times. Canada keeps it's people poor.

[Sinobear]

Hehehehehe, Long ai gu, not anymore! The good tax collectors of Canada no longer accept that kind of talk! Saying you didn't paid anything means you're liable to the "minimum" due catch-all that they've introduced. By declaring zero income, the great gov't can then say, "hokay, monsieur, we'll jus' hassume you made 17.5K las' year widdout paying da taxes, hostie!" Then you'll have to pay your 35% of that (without being able to deduct, or get your GST rebate.

'Tis better to be declared non-citizen and stay away for a year.

[tradinup]

Nice quebecor impression, lol

[Long ai gu]

It worked for me a year and a half ago Monsieur Sinobear. Je comprend pas "saying you didn't paid anything". Is that franclish or chinglish. As far as I know non-resident status is 2 years away from Canada and you must have no property(residence) etc. in Canada. By golly where does the H go in comprend....I'm all gummed up.

[oprah]

If you declare yourself to be non resident of Canada , can you still have coverage for OHIP?? I hesitate to do the paperwork for non residence status because I want to be able to have my check up when I return to Canada or if I require it it is still valid. I give OHIP a letter from my employer here stating I will be working outside Canada from this date to that date, otherwise when you are a non resident, you have to wait three months until you have health coverage when you return. I have been back and forth on this subject so many times, I still do not know what is the best thing to do. I would gladly sign non residency status so I do not pay tax on my worldwide income, but for the ohip coverage that I hesitate to cancel. My property manager says if I live outside the country , the property manager must have me sign non residency status. And then there is the statement that I have heard, ... China has a tax treaty with Canada and so keep the stubs that you get from your employer to show you have paid taxes. ... you are are not taxed twice. How does the tax treaty with China affect me if I am a resident of Canada?? I just keep going in a circle over this subject. and does OHIP (provincial), talk to non residency (federal) government??

[Sinobear]

Keeping your OHIP (or other provincial healthcare, driver's licence, etc) is not normally too big of a deal. You have to discuss with the good people (cough, cough, cough) at RevCan whether they think (that day, that time) if that constitutes "significant ties" to label you a "resident for tax purposes". I indicated that I'd keep my driver's licence, Quebec health card, and credit card active. The powers that be said that was okay.
Oprah, you should declare non-residency, but stipulate that you want to keep your OHIP coverage.
OHIP won't help you here in any way, shape, or form, but it is a nice feeling to know you can go back to Ontario and die in provincially-funded peace
Otherwise, like any immigrant, you'd have to wait three months in province to obtain your health privilidges again.


Cheers! (and don't get sick in China!)

[oprah]

Thanks for the advice... but you know I just hate the idea of talking to revenue canada.. do they know what they are doing?? every employee has a different story??? Some of you say it depends on your circumstances, I would think the rules would be the same for all, not what this guy has to say, or that guy has to say.. different depending on the colour of the moon that day??