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itiswhatitis
Joined: 08 Aug 2011
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 Posted: Wed May 23, 2012 6:06 am Post subject: My Situation with Revenue Canada |
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I first came to Korea in November 2007. I have taken 2 short breaks back to Canada in between but never for more than 2 months. I did not work when I was in Canada and I was VERY careful not to use any public services (such as seing a doctor).
Life in Korea was a roller coaster for me for some time and it was a one day at a time thing for me for a good long time. I admit this is somewhat pathetic but nobody is perfect.
Anyway.... I have started studying Korean VERY seriously and I have promised myself to have working knowledge of Korean. I also want to learn Mandarin and I am going to teach in China in 3 years (after I learn Korean).
I will be working outside of Canada for several more years (the plan is 3 more in Korea and then 3 in China after that) and I don`t want to wait on submitting the non resident form to them any longer. I am very nervous about the fact that I have not done this before.
There is no doubt in my mind that they will grant me non resident status for now and going forward....BUT what about the past 4 years??? Will they nail me on taxes???
All I can do at this point is submit the non resident form, look the other way and hope that they will too, but any feedback is most appreciated.
Thanks!!! |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Wed May 23, 2012 6:09 am Post subject: |
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File your tax return for your last partial year in Canada.
On the front page is a place to enter your exit from Canada date.
Ignore CCRA after that date. You are non-resident. If/when you decide to you can file an NR73 form. Just indicate on that form that you have no intention to return.
If you change your mind later then no worry.
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Stan Rogers
Joined: 20 Aug 2010
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| Posted: Wed May 23, 2012 6:14 am Post subject: |
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I wouldn't worry about it. They are not the American IRS.
If you don't owe them money, don't worry about it. You haven't made any income there so they just assume you are not a resident. |
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PatrickGHBusan
Joined: 24 Jun 2008
Location: Busan (1997-2008) Canada 2008 -
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| Posted: Wed May 23, 2012 7:04 am Post subject: |
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Bascially unless you earned income IN Canada (investment interest for example), contributed to a RSSP and resquested a tax break on Canadian earned income or have significant ties to Canada such as property, a car, investments you should not worry too much.
As was advised, file your taxes for the last partial year and if you earned no income in Canada after that AND had no significant ties to Canada, then you have absolutely nothing to worry about.
If in doubt however you can always contact an actual expert in these matters like an accountant who does taxes or a tax attorney....
Good luck with the plan by the way. |
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caribmon
Joined: 26 Oct 2009
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| Posted: Wed May 23, 2012 9:34 am Post subject: |
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Last edited by caribmon on Thu May 24, 2012 5:21 pm; edited 1 time in total |
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Who's Your Daddy?
Joined: 30 May 2010
Location: Victoria, Canada.
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| Posted: Wed May 23, 2012 4:10 pm Post subject: |
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| ttompatz wrote: |
File your tax return for your last partial year in Canada.
On the front page is a place to enter your exit from Canada date.
Ignore CCRA after that date. You are non-resident. If/when you decide to you can file an NR73 form. Just indicate on that form that you have no intention to return.
If you change your mind later then no worry.
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I'd worry if you change your mind within 3 years. |
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12ax7
Joined: 07 Nov 2009
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| Posted: Thu May 24, 2012 12:49 am Post subject: |
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| PatrickGHBusan wrote: |
Bascially unless you earned income IN Canada (investment interest for example), contributed to a RSSP and resquested a tax break on Canadian earned income or have significant ties to Canada such as property, a car, investments you should not worry too much.
As was advised, file your taxes for the last partial year and if you earned no income in Canada after that AND had no significant ties to Canada, then you have absolutely nothing to worry about.
If in doubt however you can always contact an actual expert in these matters like an accountant who does taxes or a tax attorney....
Good luck with the plan by the way. |
Inform your financial institution of your non-resident status. They'll take care of it for you.
http://www.cra-arc.gc.ca/E/pub/tg/t4061/t4061-11e.pdf |
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12ax7
Joined: 07 Nov 2009
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| Posted: Thu May 24, 2012 12:54 am Post subject: |
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| caribmon wrote: |
You can submit the form
They will send a letter back proclaiming your residency status according to their opinion.
But whether you're a resident depends on a judge's ruling in court. The CRA has created a system where they publish info on their website saying their employees have the authority to determine your 'residency status opinion' which is not law binding. But if you don't follow the procedures they will take a lot of money from you.
If you send money home w/o reporting and the government audits you and finds it (they don't always find it though even if you tell them, trust me I've been there) then they can send you a bill for tax owed. Then you must quickly within 3 months file an objection. Within 12 months they contact you and you explain to a nice fellow or lady who actually know the law (some sort of super auditor) and they quickly make a decision.
IF the decision is not in your favor you then spend $250 to go to tax court and you read the appropriate laws and explain your situation to the judge.
Even if you're caught they will try to charge you CPP 9.9% but under the law 'teachers in foreign countries on exchange' are exempt from CPP. Only the objection or tax court will listen to this argument, not the mere mortals working the phones at cra hq.
The tax is Canadian tax - tax paid in Korea due to tax treaty.
Have fun |
Declare money deposited in a Canadian account? I don't get it. Can you explain? |
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PatrickGHBusan
Joined: 24 Jun 2008
Location: Busan (1997-2008) Canada 2008 -
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| Posted: Thu May 24, 2012 3:33 am Post subject: |
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| 12ax7 wrote: |
| caribmon wrote: |
You can submit the form
They will send a letter back proclaiming your residency status according to their opinion.
But whether you're a resident depends on a judge's ruling in court. The CRA has created a system where they publish info on their website saying their employees have the authority to determine your 'residency status opinion' which is not law binding. But if you don't follow the procedures they will take a lot of money from you.
If you send money home w/o reporting and the government audits you and finds it (they don't always find it though even if you tell them, trust me I've been there) then they can send you a bill for tax owed. Then you must quickly within 3 months file an objection. Within 12 months they contact you and you explain to a nice fellow or lady who actually know the law (some sort of super auditor) and they quickly make a decision.
IF the decision is not in your favor you then spend $250 to go to tax court and you read the appropriate laws and explain your situation to the judge.
Even if you're caught they will try to charge you CPP 9.9% but under the law 'teachers in foreign countries on exchange' are exempt from CPP. Only the objection or tax court will listen to this argument, not the mere mortals working the phones at cra hq.
The tax is Canadian tax - tax paid in Korea due to tax treaty.
Have fun |
Declare money deposited in a Canadian account? I don't get it. Can you explain? |
Indeed...explain.
The only way this can be taxed is if you earn income from interest from that deposited money. That HAS to be declared. |
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caribmon
Joined: 26 Oct 2009
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| Posted: Thu May 24, 2012 12:50 pm Post subject: |
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If the CRA has declared you non-resident then you can send money back and probably have no problem
I'm saying that if the CRA declared you a resident, or you didn't file the form, and they see you sending money back, the auditor can cause you trouble which would require the extensive and painful process I described above. |
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12ax7
Joined: 07 Nov 2009
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| Posted: Thu May 24, 2012 7:45 pm Post subject: |
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| Is income tax owed if we earn less than a certain amount? I've been punching numbers into income tax calculators online and it appears that the interest I earn on my recent deposits is too small of an income to be taxable. |
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Wildbore
Joined: 17 Jun 2009
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| Posted: Fri May 25, 2012 3:59 am Post subject: |
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| caribmon wrote: |
If the CRA has declared you non-resident then you can send money back and probably have no problem
I'm saying that if the CRA declared you a resident, or you didn't file the form, and they see you sending money back, the auditor can cause you trouble which would require the extensive and painful process I described above. |
Whats wrong with sending money back? Most people over here have debts to pay back in their former country of residence, sending money back should not cause alarm to any competent auditer.
Actually, if you report to your bank that you are a non-resident, they take a withholding tax from any interest you earned and send that to the Canadian government. You can keep your regular accounts open, but you cannot use RRSP or tax free savings accounts. You have NO TAX LIABILITY if the bank is applying the withholding tax from your dividents/interest made in your accounts while you are a non-resident.
There should be no issue here, read the revenue canada website. |
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12ax7
Joined: 07 Nov 2009
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| Posted: Fri May 25, 2012 4:09 am Post subject: |
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| Wildbore wrote: |
| caribmon wrote: |
If the CRA has declared you non-resident then you can send money back and probably have no problem
I'm saying that if the CRA declared you a resident, or you didn't file the form, and they see you sending money back, the auditor can cause you trouble which would require the extensive and painful process I described above. |
Whats wrong with sending money back? Most people over here have debts to pay back in their former country of residence, sending money back should not cause alarm to any competent auditer.
Actually, if you report to your bank that you are a non-resident, they take a withholding tax from any interest you earned and send that to the Canadian government. You can keep your regular accounts open, but you cannot use RRSP or tax free savings accounts. You have NO TAX LIABILITY if the bank is applying the withholding tax from your dividents/interest made in your accounts while you are a non-resident.
There should be no issue here, read the revenue canada website. |
It's such a pain to find info on Revenue Canada's website. According to some documents, withholding tax isn't due if one is a non-resident (something about the law changing in 2008), while it is still due according to some other documents. Moreover, there's the question of whether the percentage due is affected by the South Korea-Canada tax agreement.
I'm simply going to call my bank. |
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Wildbore
Joined: 17 Jun 2009
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| Posted: Fri May 25, 2012 4:20 am Post subject: |
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| The rate should be 15%. |
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OBwannabe
Joined: 16 Feb 2008
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| Posted: Fri May 25, 2012 4:27 am Post subject: |
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After I went home on a break between contracts back in 2007 I opened an investment account with reinvested dividends. I paid into in monthly. I also filed Canadian income tax each year, for four years, but didn't bother my last year as I was told on this board that I didn't need to as I was deemed a non-resident. It was stated on the tax form each year that I was living/working out of the country. I never owed anything.
During my first 4 years in Korea, while filing my income tax return, I was recieving gst rebate cheques. Not sure why I was getting them, but I was.
Strangely enough, it was after my last year( the year I didn't file) that they wanted me to pay back the gst for that same year. Unless I could prove that I was indeed working outside the country.
I don't know why they pay you gst if you are living and working outside the country. Weird. Otherwise, they didn't come after me for any taxes. |
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