Job Discussion Forums

NorthofAmerica · Joined: 17 Jul 2006 Posts: 187 Location: Recovering Expat

Okay, I SERIOUSLY did search this but as usual the Dave's ESL presto-chango search engine found nothing of any value.... really, anyone else have much luck searching on here?

Anyway, basically I was laid off in March, lived off EI for awhile, then moved to Japan in August. Taxes are due at the end of April and I am wondering if I need to do anything.I have not done my taxes or declared my non-residency from Canada. Am I really screwed? I DL'd a form a while ago but don't have a pdf reader on my pc.

Any help would be appreciated as this is the first tax season I have had here and I am not really so great with these things.

canuck · Joined: 11 May 2003 Posts: 1921 Location: Japan

JimDunlop2 · Joined: 31 Jan 2003 Posts: 2286 Location: Japan

1. Thanks to canuck for the links -- there's been a lot of discussion about Canadian non-residency over the years here. I also don't know what was meant by "presto-chango search engine"... I've never had problems with phpBB-based forums other than the fact that they can't handle exact phrase searches. Most of the times when I've seen people complain about it has been because they haven't been able to figure out the difference between "Search all terms" versus "Search any terms" functions. If you want a really AWFUL search engine, go to a forum that's powered by vBulletin. Rolling Eyes

2. You will definitely need to file taxes this year AND next. The taxes that are due in April are taxes for the last year -- from January till December 2006. You will also need to file next year (in 2008) to account for the time you spent in Canada until March 2007.

3. After next year's filing, providing you are still in Japan, you can cease filing if you are deemed a non-resident.

4. You NEED to do nothing to become a non-resident of Canada, however many people CHOOSE to fill out a non-residency form for the government, which allows them to officially determine whether or not they are, in fact, non-residents. However this form is not obligatory -- it is only to find out where you stand with the government.

Gordon · Joined: 28 Jan 2003 Posts: 5309 Location: Japan

Jim is correct. But I don't think he'd need to file for the year he is not in the country. I asked CCRA and they said if I wasn't in Canada at all that year, I don't have to file.

I applied for non-residency and recommend it as it is a bit of piece of mind and you see what some of the criterion are to becoming a non-resident.

JimDunlop2 · Joined: 31 Jan 2003 Posts: 2286 Location: Japan

canuck · Joined: 11 May 2003 Posts: 1921 Location: Japan

The basic rule is that if you owe money, you must file. If you don't owe money, you don't have to file. If you're wrong, and you do owe money, and don't file, you will suffer a penalty and other consequences.

Americans must file a tax return each year.

Basically, if you owe the government money, they want it. If they owe you, they won't go out of their way to pay it.

johanne · Joined: 18 Apr 2003 Posts: 189

I've been in your situation twice. As I understand it you worked in Canada in January and February 2006 and then moved to Japan in August 2006. If this is the case then it's worth it to file as you will likely get all the tax you paid in January and February back.

In my case, I filled out my form honestly for peace of mind and indicated that I had left Canada in August. My tax deductions were then pro-rated for the 7 months I was a Canadian resident. If you only worked 2 months in Canada though, then you probably don't need much more than 7 months of tax credits to qualify for a full refund of all the income tax you paid.

You can download the forms from the internet and then you need to send them to the Ottawa tax office as this is the international one.

Just a warning that if you get your refund cheque sent to you in Japan you usually have to pay around 3,000 yen to get it cashed here. I had mine sent to my parents in Ontario and cashed it in when I went to visit them. My passport was ID enough to get cash for the cheque at any bank.

As for declaring myself a non-resident, I've didn't do it in either case. I just filled in the tax forms honestly and never had a problem. That included telling them how much money I had made that year in Japan. It didn't affect the amount of my refund. I would recommend using Ufile.ca as you can punch in the numbers and see what you will get. It also saves you having to find the right forms.

After the first year in Japan I didn't file at all and just started again when I returned to Canada. It's really not a big deal and they get thousands of returns from people like you and me every year.

Good luck

seanmcginty · Joined: 27 Sep 2005 Posts: 203

The above summaries explain things pretty well.

I'll just add that if you want help in determining your status as a resident, take a look at the Canada Revenue Agency interpretation bulletin (see link) which explains the factors they look at in terms of residency. Note that even if you are physically out of the country for a period of time you may still be deemed resident if you maintain a lot of residential ties to Canada (ie own a house, have a spouse or dependents living in canada etc etc.)

I spent 5 years in Japan and never bothered declaring myself a non-resident. When I returned I sent the CRA a letter and a form explaining that I had been in Japan for five years and was now back in Canada. They sent me a letter back saying "OK, you are now a resident of Canada again and have to start paying taxes on income."

http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/README.html

craven · Joined: 17 Dec 2004 Posts: 130

Does anyone have any advice on Canadian taxes and international earnings? I will be doing some freelance photography work for clients abroad, while living here in Japan. They'd be paying into a paypal account, which I'd then likely transfer to a Canadian account for the purposes of paying off loans (not a high interest savings account, so no worries on earnings on interest). Would this kind of income fall under the tax treaty between Japan and Canada, or would I need to file separately for this income? I've been living abroad for about 4.5 years now, and followed the same procedure that many posters here have...I did a self-check to see if I'd be considered a non-resident, let them know when I left, and will let them know again when I return.
Edit: Would I be better off transferring the paypal money to an account here in Japan, then using my salary to pay off loans (which would definitely fall under the terms of the treaty)?

seanmcginty · Joined: 27 Sep 2005 Posts: 203

Precise · Joined: 23 Mar 2007 Posts: 140

Here is where you will find you PDF reader: http://www.adobe.com/products/acrobat/readstep2.html

craven · Joined: 17 Dec 2004 Posts: 130

Thanks for the summary and the links...seems like I should be ok!!
Now if only they'd fix the FREAKIN EXCHANGE RATE!!!!!
Embarassed

ls650 · Joined: 10 May 2003 Posts: 3484 Location: British Columbia

seanmcginty · Joined: 27 Sep 2005 Posts: 203