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Korean Job Discussion Forums
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Cherbear
Joined: 17 Mar 2008
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 Posted: Sat May 09, 2009 6:52 am Post subject: Canadian Tax Help |
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I know that I'm late with my taxes, but I'm confused over how to handle it. I've read many of the posting about filing taxes, but they mostly deal with is issue of residency.
My concern is what kind of documentation do you need? I have nothing to show proof of my income in Korea. So how are they going to know that it came from a foreign country? I know that Korea has a tax treaty with Canada so you only would have to pay the differece, but how are they even going to know that it was incomed earned in Korea if I have nothing to show evidence of that?
If anyone who is in a similar situation could tell me what they did, what documents that had to get and what kind of tax form they filed (resident or non-resident) that would be great because I'm clueless. |
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crossmr
Joined: 22 Nov 2008
Location: Hwayangdong, Seoul
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| Posted: Sat May 09, 2009 5:35 pm Post subject: |
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You don't have any pay stubs from your job that show taxes paid, income, etc?
If you didn't save any from your job you might have to ask your school to give you some kind of official looking report of your wages that clearly shows the deductions.
As for where the money comes from, it doesn't matter. If you are a deemed resident of Canada you're automatically charged a 48% increase on your taxes (if your tax rate was 15%, you pay 22.5% now) this applies to all income, not just the income from outside Canada.
Because you're overseas you need to file paper, you can't do it electronically which means you also need to provide receipts for any deductions you claim and you'll need to photocopy and provide your pay stubs/report of your wages from the school. |
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egrog1717
Joined: 12 Mar 2008
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| Posted: Sat May 09, 2009 6:49 pm Post subject: |
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Or file "zero" under your income for the year like most people do  |
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friendoken
Joined: 19 Jan 2008
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| Posted: Sat May 09, 2009 7:11 pm Post subject: |
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I live in Laos and just completed my income tax papers. I am sure it will be looked at because I have no idea what I did. I put a number I think is correct in the place I think is the right one. I signed and dated it. Then, where it asks if you want to donate some or all of your return to help reduce Ontario's debt I wrote "You're kidding right?" Tomorrow I will mail it. I didn't put anything for the income I have made in Laos. It isn't traceable and there is nothing between Canada and Laos anyway.
Next year I'll just sign the damn thing and put my papers in, they can figure it out themselves! I'll never live in that country again anyway. It's too nice here. |
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hamlet712
Joined: 16 Mar 2007
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| Posted: Sat May 09, 2009 7:33 pm Post subject: |
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It depends on if you have any actual ties to Canada.
if you have NO wife, NO children, and NO house back in canada then GENERALLY you are not considerd a resident of Canada if you live abroad, and you are NOT expected to pay taxes, Especially if you can prove that you pay taxes in Korea, and that there is an existing tax treaty with the Country you are in.
The only thing I have back in Canada is a car I'm paying off ( for my return) and a bank account to pay for th vehicle. Canada does not consider me a resident and so I do not have to pay Canadain Taxes |
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okokok
Joined: 27 Aug 2006
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| Posted: Sat May 09, 2009 7:47 pm Post subject: |
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| hamlet712 wrote: |
It depends on if you have any actual ties to Canada.
if you have NO wife, NO children, and NO house back in canada then GENERALLY you are not considerd a resident of Canada if you live abroad, and you are NOT expected to pay taxes, Especially if you can prove that you pay taxes in Korea, and that there is an existing tax treaty with the Country you are in.
The only thing I have back in Canada is a car I'm paying off ( for my return) and a bank account to pay for th vehicle. Canada does not consider me a resident and so I do not have to pay Canadain Taxes |
Who says your not a resident? Canada? or just some little nerd sitting behind a desk? It's the latter dude and it's not binding.
Especially in your case. If you never get audited, sure you'll be fine.
The reason for the rules about ties to Canada is that they are used to prove that you either intended or didn't intend to EVER return to Canada. You admitted yourself that you intend to return. I think if anyone looks into it, it will be pretty difficult for you to prove you didn't intend to return when you are paying off a car loan for a vehicle you plan to use on your return. |
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crossmr
Joined: 22 Nov 2008
Location: Hwayangdong, Seoul
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| Posted: Sat May 09, 2009 8:01 pm Post subject: |
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Non-residency doesn't have anything to do with whether or not you intend to return to Canada. In fact a Non-resident can even stay in canada for less than 183 days each year.
http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html
In Hamlet712's case, he does have residential ties:
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What are residential ties?
Residential ties include:
* a home in Canada;
* a spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants in Canada;
* personal property in Canada, such as a car or furniture;
* social ties in Canada.
Other ties that may be relevant include:
* a Canadian driver's licence;
* Canadian bank accounts or credit cards;
* health insurance with a Canadian province or territory.
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However, Canada and Korea have a tax treaty, as such he would be considered a "deemed non-resident" as long as he has appropriate residential ties here (property, job, spouse, etc). Deemed non-residents are treated the same as non-residents.
Your resident status is based solely on what has happened within the tax year. you could be a resident one year, non-resident the next, and a deemed non-resident the year after that and finally a resident again.
In fact factual or deemed residents automatically become deemed non-residents in Korea so long as they've set up appropriate residential ties.
| Quote: |
Deemed non-residents
Effective after February 24, 1998, if you are a factual or deemed resident of Canada for tax purposes and a resident of another country according to a tax treaty Canada has signed with the other country, you may be considered a deemed non-resident of Canada. You become a deemed non-resident of Canada when your ties with the other country are such that, under the tax treaty, you are considered a resident there. |
As long as you have a job here, and preferably property in your name, and you were in canada for less than 183 last year, regardless of your status you're a deemed non-resident of Canada. |
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mayorgc
Joined: 19 Oct 2008
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| Posted: Sat May 09, 2009 8:06 pm Post subject: |
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I live in BC. So do I just fill out the BC tax form and just fill in the boxes as best as I can? I've only been here for 6 months, and I didn't really work bfore that, I was in school. So I doubt I owe anything.
So do i just fill out the BC form? |
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hamlet712
Joined: 16 Mar 2007
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| Posted: Sat May 09, 2009 8:07 pm Post subject: |
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| okokok wrote: |
| hamlet712 wrote: |
It depends on if you have any actual ties to Canada.
if you have NO wife, NO children, and NO house back in canada then GENERALLY you are not considerd a resident of Canada if you live abroad, and you are NOT expected to pay taxes, Especially if you can prove that you pay taxes in Korea, and that there is an existing tax treaty with the Country you are in.
The only thing I have back in Canada is a car I'm paying off ( for my return) and a bank account to pay for th vehicle. Canada does not consider me a resident and so I do not have to pay Canadain Taxes |
Who says your not a resident? Canada? or just some little nerd sitting behind a desk? It's the latter dude and it's not binding.
Especially in your case. If you never get audited, sure you'll be fine.
The reason for the rules about ties to Canada is that they are used to prove that you either intended or didn't intend to EVER return to Canada. You admitted yourself that you intend to return. I think if anyone looks into it, it will be pretty difficult for you to prove you didn't intend to return when you are paying off a car loan for a vehicle you plan to use on your return. |
Um no dude, you fill out the OFFICIAL revenue form, and you get an OFFICIAL revenue document.
If i even get audited I AM FINE because I have an official letter from the GOVERNMENT'S revenue agency that says I meet the requirements of non residency and therefore DO NOT have to .
YOu DO NOT HAVE To pay taxes if they are satisifed that you have no ties when you are gone (IT DOES NOT MATTER - if you intend to return or not)
if anyone actually wants to look into it you can find out the same thing as me. If you decde to leave for an undetermined amount of time, and you have no ties to canada AND can show that you were a tax paying RESIDENT of another country while you were gone. then the Canadian government does not expect you to pay tax on that income.
you just have to let them know by filling out the appropriate form.
The other guy who posted says the exact same thng and even posts the relevant material from the website |
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crossmr
Joined: 22 Nov 2008
Location: Hwayangdong, Seoul
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| Posted: Sat May 09, 2009 8:12 pm Post subject: |
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| mayorgc wrote: |
I live in BC. So do I just fill out the BC tax form and just fill in the boxes as best as I can? I've only been here for 6 months, and I didn't really work bfore that, I was in school. So I doubt I owe anything.
So do i just fill out the BC form? |
No, do it all to be safe.
If you want you can buy the quicktax software from their website ($40 for standard) and download it. You'll still have to file it on paper. I'm not sure if you can file it at the embassy or not.
You have to report your Korean income, but you get to deduct it straight away as long as your pay stubs show you paid taxes here. Its the equivalent of reporting zero.
if you were in school save your education receipts. You can save them for a few years and claim them later if you have any income in Canada in the next couple years or so.
| Quote: |
| The other guy who posted says the exact same thng and even posts the relevant material from the website |
With you're car you're not technically a non-resident, you are a deemed non-resident. Pretty much the same thing for tax purposes, however if you went to a country with no tax treaty with Canada, you would be considered a deemed resident with your car. |
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brento1138
Joined: 17 Nov 2004
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| Posted: Sat May 09, 2009 9:11 pm Post subject: |
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Hey, send a PM my way if you want help on Canadian taxes. I've sorted everything out with the CRC and have become an official 'non-resident' for tax purposes. You simply have to fill out a form and send it in. It's important that you check the correct boxes...
But generally, nobody in Korea (except people who have property and dependents) should be paying taxes to the Canadian gov. PM me, or check a previous post I've made.
http://forums.eslcafe.com/korea/viewtopic.php?t=143997 |
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okokok
Joined: 27 Aug 2006
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| Posted: Sun May 10, 2009 4:07 am Post subject: |
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Everyone can believe what they want to believe. This issue has been discussed again and again on Dave's and there is so much misinformation put out there.
Intent has everything to do with it. That is the reason that the whole 'ties' system was created. They needed a way to measure the person's intent. I can intend to live abroad forever, it doesn't mean I will. Things can change, and the government allows for that. I can return and then leave again with the intent of not coming back. Things might not work out.... and repeat.
Hamlet, you can believe what you want about your official document. Believe it or not, but that car may come back to haunt you (bank account too! Not necessarily one or the other, but both of them combined) BTW, there's no need to yell at me, but I guess it helps you believe what you're saying, DUDE.
Anyways, I'm not gonna waste a lot of time on this, so here's a few quotes. But really, I have sat down with a number of accountants and tax lawyers who specialize in this, and I have family in the business so take everything for what it's worth. If you wanna believe I know nothing... so be it.
| David Ingram wrote: |
There is really no such thing as "declaring" oneself a non-resident of Canada. You 'can' fill in a NR73 and ask for a ruling but these only give the CRA a list of who to look at after.
You can call a toad a frog all day long and it is still a toad.
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Read the following tax cases and pay attention to the Dennis Lee, Wolf Bergelt and David MacLean Cases. David MacLean even had a letter from the CRA stating that he was a non-resident so you can see that they are not worth the paper they are written on. Judge Teskey's list is 'right on'!
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It is possible to be physically "in Canada" and be treated as a Non-Resident and it is possible to be out of the country for seven years, or never have even lived in Canada, but wanted to, and be taxed as a Canadian resident as the following three cases show. In case you missed it, the reason for the different rulings is the "INTENT" of the parties involved.
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James Ferguson lost his claim for non-residency status but from the information, it didn't stand a chance anyway. He had been in Saudi Arabia on a series of one year contracts for four years. His wife remained employed in Canada, and he kept his house, car, driver's licence, union membership, and master plumber's licence. Judge Sarchuk ruled that he had always intended to return to Canada and was a resident.
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The Tax departments in Canada and the U.S. issue Interpretation Bulletins and Information Circulars and Guidance Pamphlets. These documents sometimes get people in trouble because the individual reads the good part and doesn't pay any attention to the exceptions. The following case ran contrary to a Guidance Pamphlet issued by the IRS. |
http://tax.centa.com/article.php/20070430135154126
| Quote: |
| Tax residency does not affect your citizenship or legal residency status. It is specific to tax. Determining if you are a resident of Canada for tax purposes depends on your intention at the time you leave Canada. You must ask yourself if you plan to return to Canada in the �foreseeable� future. |
| Quote: |
"Ordinarily Resident"
Even where an individual is physically absent from Canada for long periods of time, if they have not severed all their residential ties, the courts have "overwhelmingly" found that they are still "ordinarily resident" in Canada.
When a person living abroad maintains residential ties with Canada, the decision about whether they are "ordinarily resident" in Canada has to be made. The significance of the individual's particular ties is considered, looking at:
* whether there is evidence of an intention to permanently sever residential ties with Canada
* the regularity and length of visits to Canada and
* residential ties outside of Canada.
There Is No Formula for Determining Whether Someone Is a Canadian Resident for Tax Purposes |
^You can listen to tax professionals who say that intent does have something to do with it, or you can listen to some guy with a toque pulled over his face. |
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crossmr
Joined: 22 Nov 2008
Location: Hwayangdong, Seoul
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| Posted: Sun May 10, 2009 4:31 am Post subject: |
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| ^You can listen to tax professionals who say that intent does have something to do with it, or you can listen to some guy with a toque pulled over his face. |
Yeah its much better to listen to a guy who spends his free time stalking elderly men and taking photos of them to try and mock them on the internet.
We could listen to that guy and his random internet page he posted, or say the government of Canada's official page where there is no mention of the word intent.
You're trying to cite a court case involving someone who is in a non-treaty country vs people in a treaty country. The difference is clearly spelled out in the official page I listed above.
Let's quote it again, since he apparently needs to read it again:
| Quote: |
Effective after February 24, 1998, if you are a factual or deemed resident of Canada for tax purposes and a resident of another country according to a tax treaty Canada has signed with the other country, you may be considered a deemed non-resident of Canada. You become a deemed non-resident of Canada when your ties with the other country are such that, under the tax treaty, you are considered a resident there.
Note
If on February 24, 1998, you were already a resident of a country with which Canada has a tax treaty, you will not be considered a deemed non-resident of Canada. You will only be considered a deemed non-resident of Canada if after February 24, 1998:
* you ceased to be a resident of the tax treaty country, then become a resident of that country again; or
* you move from the tax treaty country and become a resident of another country with which Canada has a tax treaty.
The ordinary rules on ceasing to be a resident of Canada apply to deemed non-residents. For more information on the implication of ceasing to be a resident of Canada, see Guide T4056, Emigrants and Income Tax.
As a deemed non-resident, the same rules apply to you as a non-resident of Canada. |
This special status applies directly to people who are in a treaty country. Saudia arabia is not a treaty country. Which means to avoid taxes in saudi arabia you have to be a genuine non-resident. Not a "deemed non-resident". In Korea it doesn't matter. For a list of treaty countries you can see this link:
http://www.fin.gc.ca/treaties-conventions/treatystatus_-eng.asp
You'll notice Korea on the list and Saudi Arabia not.
If you clearly read the text of "demeed non-resident" you will see that anyone who is a factual resident or a deemed resident automatically becomes a deemed non-resident if they are considered to be a resident of the country with which there is a tax treaty.
This means that regardless of your intent as to whether or not you're going back to Canada, you're still considered a deemed non-resident of Canada so long as you can prove residency in Korea. And any deemed non-resident has the same tax obligation as a non-resident. |
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okokok
Joined: 27 Aug 2006
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| Posted: Sun May 10, 2009 4:55 am Post subject: |
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| Well, if you don't know who David Ingram is, then I can't help you. |
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hamlet712
Joined: 16 Mar 2007
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| Posted: Sun May 10, 2009 4:59 am Post subject: |
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okokok
For a guy who seems to be so knowledgable on the issue you don't seem to get the most basic thing (pointed out by the last guy)
INTENT is irrlevant. What is relevant is do you live an another country, are considered a resident there, pay taxes there, and live in a country in a tax treaty with Canada.
Also I am not yelling, I use caps for emphasis. |
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