Korean Job Discussion Forums

marlow · Joined: 06 Feb 2005

I've been in Korea awhile. I'm going to go back to Canada for two years or maybe forever, but probably just for two years. I won't be working. I'll be "vacationing" for a year and studying for a year.

The problem is that I won't actually be earning anything in Canada, but I'll be taking advantage of social programs. I have a family as well.

How do I go back on the tax radar?

1) Although I won't be going home until September 2009 should I file a 2008 tax return on my international income? I know I won't pay tax on it, but will my fall 2009 benefits such as GST and CCTB be based on 2008?

2) What about 2009? I'll file a return in 2010 for this year, and pay tax on my Korean income for January to August of 2009, although it won't be that much after exemptions. Will my 2010 social benefits be adjusted according to 2009's income or will the 2009 benefits be affected by the 2009 income? Which year do social program amounts get based on I guess?

3) It gets more complicated if I come back. If I study at university in Canada until August of a tax year (2010) will I get social benefits until August and then have them canceled when I leave and become a non-resident again? Or, when I actually do taxes in 2011 will my social benefits be adjusted retroactively based on international income from September to December of that year? I think they just stop paying the benefit but don't adjust anything retroactively. It's just that if I make a lot in the fall, but was receiving maximum benefits during the winter and spring and summer it seems a bit sneaky.

I am going to work this out with the tax office and government offices, but I'm really hoping someone has made a temporary exodus to Canada before and has first hand experience with things and is willing to help me. Of course helping me means you have to read all of the above. I really hope it makes sense.

howie2424 · Joined: 09 Jan 2003

I can't give you any advice on your situation, having never done what you're proposing to do. I can tell you that as someone who has had to deal with CRA over the past 7 years (I have lived here but own an income property in Canada) this board is probably the last place to seek this kind of advice. Fork over the money to get a good accountant's advice on the matter. It will no doubt save you endless headaches and probably a few bucks to boot. Best of luck.

marlow · Joined: 06 Feb 2005

howie2424 · Joined: 09 Jan 2003

An accountant can be pricey, no doubt about that. I'm not sure I would be having those discussions directly with CRA as they tend to tell you whatever it takes to maximize your liability. As you noted, asking them to give you advice on how to minimize your liability is probably not going to be very fruitful. It's just not their job to do that. It is however an accountant's job to do this and in my experience, CRA deals with tax accountants much differently than ordinary citizens who know nothing about the tax rules.

I would suggest finding a good tax accountant back home, explaining your situation and what you need them to do and asking for an estimate of the cost. The guy I used gave me an estimate and his account actually came in under his quote. His work saved me more than the tax I would have paid had I gone it alone. Again, good luck to you.

marlow · Joined: 06 Feb 2005

howie2424 · Joined: 09 Jan 2003

I paid a little more than that but my situation was complicated by the fact that I own a rental property and I was late filing. You may get it all done for $1500, I don't know. As I said, get an estimate and decide whether you want to go it alone or use a professional.

The real problem with non resident tax issues in Canada is the nebulous test they use for determining your residency. It's so vaguely defined that you always face the possibility of CRA simply saying that notwithstanding your absence from the country you are a de facto resident for tax purposes. Then you're stuck paying Canadian taxes on all your Korean income for however many years you've been here. That's bound to be a little more than $1500. A tax accountant can help with that. My feeling from my own experience is that CRA is a lot less likely to mess with you and more likely to give you the benefit of the doubt if you're represented by a pro than if you try doing it yourself.

Mr. Pink · Joined: 21 Oct 2003 Location: China

Since I have returned to Canada I'll answer your questions:

- Don't file ANY tax returns for past years. YOU DO NOT NEED TO.
- The year that you come back, say it is in 2009, in 2010 file a return for 2009, but do not put your Korean income on that return. You were non-resident and do not have to.
- To get your social services, such as health care: you just have to reside in the province for 3 months. After 3 months you can use the health care, no problems. What I did was went and applied for just as soon as I got back to Canada. They sent me the health card in the mail about 2.5 months later, it was good 3 months from the date I arrived back in Canada.
- What other social benefits do you want? If you are bringing back a wife and a kid, you can apply for child benefits RIGHT AWAY. However, don't make the mistake I did and claim your Korean income, or you get shit all. Claim what you made in Canada $0. Then you should get the maximum.
- GST you cannot claim until the next year's return, so forget about that. The amount returned is so small, it isn't really going to do much for you.

What exactly do you think you have to work out with the tax office? As a student you won't get welfare, if that is the route you were thinking of going.

If you have questions, feel free to PM me.

I came back to go back to school and I brought my wife and child with me, so I know what social services you can and cannot get.