Korean Job Discussion Forums

[brento1138]

Just wondering if anyone here filled out form NR-73e (to avoid getting taxed to death when you get back)... and if you succeeded...

[Typhoon]

I'm not sure about the e part, but I did fill out NR-73 two different times and both times I had no problems. Easy as 1-2-3.

[brento1138]

[Typhoon]

Nope. The first time I said I was leaving for 4 years that I knew of and then I would see what happened. I think there was a place for a note or I attached one at the end. I can't remember exactly. The 2nd time I said I would be out of the country for 10 years with no further explanation. Both times I was granted non-residency. I understand the guidelines for getting non-residency have changes several times over the last 15 years, but I believe that it is based on a points system of how many ties you have to Canada and your new country along with being out of the country for a certain period of time (it could be 2 years or that could be the old standard). There have been so many changes it is tough to remember exactly what the standards are.

[ttompatz]

That is correct.

They consider your imminent return and ties to Canada against your possible non-return and ties to outside of Canada.

When I filed my nr73e (e for English) I had:

House and bank account in Canada - rented at arms length for full market value.
Investments, RRSP and mutual funds in Canada.

Here I have a wife (non-Canadian) and daughter (dual citizen), job, apartment, car, bank account, credit cards, pension and medical insurance, and several years residency.

I was determined to be non-resident and have filed taxes on my Canadian income as a non-resident and paid NO Canadian taxes on my foreign investments and income.

.

[fishy]

As the others said, it is easy. My S.O. and I are non-residents. Before we sent in the form, however, we read the Canada/Korea tax treaty carefully. As long as you are outside of Canada for the minimum number of days, if your income earned in Korea is taxed in Korea, then it won't be taxed in Canada. The treaty is very clear on this point. It doesn't matter how many ties you have to Canada. It seems that the purpose of these international tax treaties is to allow folks to work abroad (especially for corporations) and not get double-taxed. Not so much of an issue for Korea/Canada, but think about a Canada/Sweden situation. Those Volvo execs. wouldn't be able to earn a dime. So regarding the form, the two important points seem to be: 1) are you living in a country that has a tax treaty with Canada? and 2) are you taxed by that country? But you don't have to take our word for it. The treaty is online and anyone can access it for him or herself. There are other handy pamphlets and documents as well to help you out with this.

BTW, the only tax we have to pay is 15% on our investment interest. It's good to tell your bank that as it's the bank's responsibility for withholding the tax. Normally, the bank will withhold 25% on your investment interest. That's the rate for many other countries. For Korea/Canada relations, however, it's only 15%. I believe that information is somewhere on the Canadian government's website as well.

[ursus_rex]

I've lived in Korea for 8 years. I've never submitted such a form (I'm not certain they existed when I moved here).

Can they be made retroactive to time non-residency is declared?

Where do I get these forms?

I'm hoping there are not too many problems.

[ttompatz]

[Hope]

Thanks for the link. I've been here 7 years...good to know it can be back dated. I'll get on top of that immediately.

[Kwai_Chang_Kain]

I've been in Korea for the past 3 years and haven't filed any taxes in Canada during that time. Will I be penalized if/when I ever decide to move back home?

[ttompatz]

[Kwai_Chang_Kain]

[bombenhagen]

I would if I were you. Just throw it all in a box incase you need it. I also photocopy internet, telephone, and utility bills just so I can prove that I had some sort of ties here. You probably won't need it but better safe than sorry.

[DrunkenMaster]

[The Lemon]

Not quite "insane" but misinformed/loopy are some of the posts in this thread.

To clarify:

1. The NR-73 form is *not* a prerequisite to have non-residency. Being a non-resident (as defined by the CCRA) is the prerequisite. The form just solicits the CCRA's non-binding opinion.

There are different schools of thought about the advisability of sending it in - some like the comfort of being told the answer they wanted to hear, though it's no help if your circumstances change. Others don't like putting themselves on the CCRA radar if they happen to be a borderline case.

2. The "tax treaty" between Korea and Canada is only tangentially relevant to the issue of "do you pay Canadian tax". Here's how it works: if you're unsuccessful in arguing you're a non-resident and end up owing the CCRA income tax on your Korean earnings (see #1) but you already paid Korean tax, you subtract what you paid in Korea to your Canadian tax bill.
***Update - - - - I now believe I was wrong about this... visit the link to my Galbijim article, below, which I updated last year after I wrote the above- basically, the tax treaty may well protect you from the CCRA if you meet certain conditions. See the link for details. - Lemon, Jan 09****
For more information, see here:

http://wiki.galbijim.com/Tax_issues_for_Canadian_expats

And the Mother of All CCRA Tax Documents is this one. Read it carefully and slowly - it's the ultimate authority on how they're interpreting the tax laws these days:

http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.pdf