| View previous topic :: View next topic |
| Author |
Message |
nalj
Joined: 13 Apr 2012
|
 Posted: Wed Nov 21, 2012 4:08 am Post subject: Need help - Canadian taxes/residency |
 |
|
Hello all,
Seeking assistance and advice from other Canadians out there. I've been in Korea for three months and I sent off the application for non-residency status a month ago. Hopefully CRA has received it. My question is this; I am still receiving direct deposits into my bank account from CRA for multiple things (HST cheque, etc) which I had set up months before leaving Canada. Since I don't know if my application for non-residency has been approved, should I call in and say anything to CRA? Also, how do I know if I've been approved for non-residency? I'm just trying to avoid being hit with back taxes or having to pay back all these direct deposit cheques I've been receiving. On my application for non-residency, I made it seem like I had left the country for good with no intention ever to return with zero assets left in Canada aside from some bank accounts (to pay OSAP back with).
Advice anyone?
Much appreciated! Thanks! |
|
| Back to top |
|
 |
schwa
Joined: 18 Jan 2003
Location: Yap
|
| Posted: Wed Nov 21, 2012 4:22 am Post subject: |
|
|
You cant have it both ways. If you accept the checks from the govt, you're denying your non-residency, which will leave you on the hook for the difference between Korean & Canadian income tax (substantial).
Also, applying for non-residency is not required. Especially after just 2 months. Hindsight is cheap but it might have served you better to have stayed off their radar for substantially longer.
Maybe others can suggest what steps you should take now, but the best I can offer is good luck. |
|
| Back to top |
|
|
BobbyOrr
Joined: 01 Jun 2009
|
| Posted: Wed Nov 21, 2012 5:09 am Post subject: |
|
|
I got those cheques. The gov't realized I shouldn't have gotten them and billed me. It wasn't really a big deal. I don't think applying for non-residency is necessary.
You should have cancelled your health insurance though. |
|
| Back to top |
|
|
loose_ends
Joined: 23 Jul 2007
|
| Posted: Wed Nov 21, 2012 6:27 am Post subject: |
|
|
Here is my story about Canadian taxes after living in Korea for 5 years.
-in 2003 I left Canada, I did not contact Revenue Canada or cancel my msp
-I returned in 2008 to a $3000 msp bill, which was instantly waived when I called revenue canada and told them I had not been in the country, they started up again from scratch
-In 2011 I filed for 2009, 2010, and 2011 ignoring the years I was in Korea
-I got my tax return no questions asked about any income I made between 2004-2008
So long story short, I freaked out for the 5 years I was in Korea about not declaring non-residency and then having to pay taxes in Canada when I returned. This was not the case. I don't think they gave two sh*** about what I has done during those years. |
|
| Back to top |
|
|
ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
|
| Posted: Wed Nov 21, 2012 3:10 pm Post subject: |
|
|
OP...
File for the partial year you were last in Canada.
On page 1 is a place where you say you left Canada and give a date.
After that it is a non issue.
When/if you return to Canada you simply begin filing for the year of your return.
NR-73 is NOT a requirement. It is simply a non-binding determination of your status.
IF you collect government checks, refunds, rebates, benefits for the time you are out of the country you will be found to be a "deemed resident" and taxable on your worldly income. Cancel your refunds and healthcare.
. |
|
| Back to top |
|
|
nalj
Joined: 13 Apr 2012
|
| Posted: Wed Nov 21, 2012 3:26 pm Post subject: |
|
|
Thanks all!
So does this mean I should call in to CRA and tell them to stop giving me money? I'm not sure what to do since it's direct deposit.
How do I 'cancel' my OHIP?
Also, how do I know if I'm a resident or not if I haven't heard back after filing for non-residency?
Thanks! |
|
| Back to top |
|
|
giraffe
Joined: 07 Apr 2009
|
| Posted: Wed Nov 21, 2012 3:44 pm Post subject: |
|
|
| nalj wrote: |
Thanks all!
So does this mean I should call in to CRA and tell them to stop giving me money? I'm not sure what to do since it's direct deposit.
How do I 'cancel' my OHIP?
Also, how do I know if I'm a resident or not if I haven't heard back after filing for non-residency?
Thanks! |
Yes you should call them to tell them not to send you cheques/direct anymore. THey will send you a letter in the mail or tell you on the phone if you need to pay any of it back.. If you plan on being a non resident of canada for tax purposes you're not entitled to receiving any of those benefits...
OHIP you need to cancel in person at the gov ohip office. If you didnt cancel when you do your next taxes in Canada the canadian gov will most likely ask you to pay taxes for the ohip even if you were in korea. But if you say you were out of he country they might remove the ohip charges when you do your taxes but if that happens youll have to start ohip from scratch... Technically you should cancel your ohip before leaving canada if you know you will be out of canada for over 6 months. BUT alot of people do not cancel it because they dont want start from scratch and wait 3 months when they come back to be covered again. So if you dont want to wait 3 months youll have to continually pay ohip which means even if you lived in Korea you will have to pay taxes in Canada to keep your coverage... If you dont want to pay taxes in Canada then just cut off all ties with canada.
If I were you i wouldnt have signed that Non residency form. The form itself isnt there to tell the government that you no longer want to be a resident. There is no form that magically makes you a non resident. By signing the form it puts you on their radar... which isnt a good thing!
Residency for tax purposes is based on primary and seconday ties in canada... No one will tell you if your a resident or not.. you will just have to file your taxes. Obviously, no ties to canada during the tax year = 0$ paid in Taxes... If your ohip is active, you have a house/spouse , creditcards , bank accounts , a car etc.. in Canada then they willmost likely consider you a resident and youll have to pay taxes... If you'll be in korea for a long while just cut off all your ties in canada and keep it to the minimum ( which means cancel ALLLLL your membership cards ie: gym , library , book club if you want to be on the safe side etc =p ).... For example, All i have in Canada at the moment is a basic bank account and credit card and thats it ( those are considered secondary ties) so as far as government is aware I'm a "non resident of canada for tax purposes" . THey never told me that I'm a non resident or not. I just know I am. The government decides when you do your taxes if you were a resident for a specific tax year. It's pretty simple really.
http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html
all the info is on the CRA website and if you call CRA they will answer your questions. Except if you ask them "am I a resident or not?" THey will not answer that. They can give their personal opinion but thats not an official answer.... |
|
| Back to top |
|
|
nalj
Joined: 13 Apr 2012
|
| Posted: Thu Nov 22, 2012 3:22 am Post subject: |
|
|
| Thanks so much for all the help so far, everyone! It has been super helpful. Any idea how to cancel OHIP when I am in Korea? Not heading back and not planning on heading back anytime soon. As for something that just popped up in my head... what do I do with my driver's license? |
|
| Back to top |
|
|
ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
|
| Posted: Thu Nov 22, 2012 5:46 am Post subject: |
|
|
| nalj wrote: |
| Thanks so much for all the help so far, everyone! It has been super helpful. Any idea how to cancel OHIP when I am in Korea? Not heading back and not planning on heading back anytime soon. As for something that just popped up in my head... what do I do with my driver's license? |
Driver's license is a non-issue.
OHIP can be canceled by writing to them, telling them you want to withdraw from the plan, you are out of the country and will not return in the foreseeable future.
It does not have to be done in person and
cannot be done via e-mail or phone call/SMS.
You need to do it in writing, have your card number and other proof of ID to go with it.
. |
|
| Back to top |
|
|
giraffe
Joined: 07 Apr 2009
|
| Posted: Thu Nov 22, 2012 6:19 am Post subject: |
|
|
| nalj wrote: |
| what do I do with my driver's license? |
You trade it in for a Korean License. |
|
| Back to top |
|
|
Wildbore
Joined: 17 Jun 2009
|
| Posted: Thu Nov 22, 2012 12:31 pm Post subject: |
|
|
| giraffe wrote: |
| If you'll be in korea for a long while just cut off all your ties in canada and keep it to the minimum ( which means cancel ALLLLL your membership cards ie: gym , library , book club if you want to be on the safe side etc =p ).... For example, All i have in Canada at the moment is a basic bank account and credit card and thats it ( those are considered secondary ties) so as far as government is aware I'm a "non resident of canada for tax purposes" . THey never told me that I'm a non resident or not. I just know I am. The government decides when you do your taxes if you were a resident for a specific tax year. It's pretty simple really. |
Health insurance is considered a secondary tie too, not a big deal. I think the primary ones are property, dependents, and pension plans.
Even if you did need to pay taxes, most ESL teachers would fall in the lowest bracket. You also get a credit for Korean income taxes paid, plus I think a credit for the NHIC health insurance tax (keep records). That would be about a 5% credit. Also, you would suddenly get tons of RRSP room, tax free savings room, and low-income credits, and other stuff that you could get. You could probably deduct moving expenses (flight tickets) as well. At the end of the day, you would probably only owe a few thousand more (at best).
Don't worry about it. |
|
| Back to top |
|
|
giraffe
Joined: 07 Apr 2009
|
| Posted: Thu Nov 22, 2012 7:19 pm Post subject: |
|
|
| Wildbore wrote: |
Health insurance is considered a secondary tie too, not a big deal. I think the primary ones are property, dependents, and pension plans.
Even if you did need to pay taxes, most ESL teachers would fall in the lowest bracket. You also get a credit for Korean income taxes paid, plus I think a credit for the NHIC health insurance tax (keep records). That would be about a 5% credit. Also, you would suddenly get tons of RRSP room, tax free savings room, and low-income credits, and other stuff that you could get. You could probably deduct moving expenses (flight tickets) as well. At the end of the day, you would probably only owe a few thousand more (at best).
Don't worry about it. |
Yes, Health provincial health insurance and driver licenses are considered "secondary ties". Tooo many secondary ties and I would start worrying about my residency status if you didn't want to pay taxes in canada. Anyways, all you say is true. If i were only staying in korea on a typical hagwon salary for 1 or even 2 years I would say not to worry about it...
But if your plan is not to go back to canada anytime soon, You should make sure to cut off most ties or it might come back and bite you later... It's not unheard of that expats go back to canada after years of living abroad and end up paying a crap load of taxes because the gov decided you had enough ties with canada to consider you a resident for tax purposes.. better safe than sorry.
| Quote: |
| At the end of the day, you would probably only owe a few thousand more (at best). |
Well a few thousands more in taxes is alot of money to some people.. That could pay for a nice vacation... but yes, 1 or 2 years wont be a big deal. Chances are your ohip will cancel itself out without you even knowing. There are residency requirements for ohip.
http://www.health.gov.on.ca/en/public/publications/ohip/longer_absences.aspx
http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html
Anywyas no biggie. Things usually sort themselves out really lots of canadians live abroad so you're not in any special circumstance.. theyll know what to do with you. |
|
| Back to top |
|
|
nalj
Joined: 13 Apr 2012
|
| Posted: Fri Nov 23, 2012 10:11 pm Post subject: |
|
|
Thanks all for the extremely helpful feedback. I'm planning to be gone at least 2 years if not more. Just to summarize and make sure I haven't missed some small thing that will kick me in the ass later...
1) Call CRA and tell them to stop direct depositing me the HST and Trillium benefits cheques
2) Let driver's license and OHIP naturally expire
3) Ignore the fact I am an idiot for sending in the NR-73 form and hope I slip by peacefully under someone's radar
I'm not too worried abou taxes since I know Canada and Korea has a tax agreement and my employer is paying it on my behalf. Right? OR SHOULD I WORRY?
I wish CRA would be more definite about procedures and things like that instead of making it a guessing game left to the fates :S |
|
| Back to top |
|
|
giraffe
Joined: 07 Apr 2009
|
| Posted: Sat Nov 24, 2012 3:56 pm Post subject: |
|
|
| nalj wrote: |
Thanks all for the extremely helpful feedback. I'm planning to be gone at least 2 years if not more. Just to summarize and make sure I haven't missed some small thing that will kick me in the ass later...
1) Call CRA and tell them to stop direct depositing me the HST and Trillium benefits cheques
2) Let driver's license and OHIP naturally expire
3) Ignore the fact I am an idiot for sending in the NR-73 form and hope I slip by peacefully under someone's radar
I'm not too worried abou taxes since I know Canada and Korea has a tax agreement and my employer is paying it on my behalf. Right? OR SHOULD I WORRY?
I wish CRA would be more definite about procedures and things like that instead of making it a guessing game left to the fates :S |
1) Yes call CRA. They might tell you need to pay back from of the previous deposits. It all depends when you moved to korea. I had to pay bac about 150$ in HST deposits last year. You might want to call the international department. THey will be able to answer any questions you have.
2)a)Personally i would have cancelled ohip in person before leaving if knew i would be gone for a while. Since you didnt tell them you might be responsible paying for it even though you're not using it... Perhaps try to call OHIP and see what they say...
b) Why les your drivers license "expire". If you have a full canadian license you're already in korea, trade it in for a Korean license!!!! If your canadian one expires while living here you should be able to trade your korean license for a canadian one when you move back to canada. I wouldnt let the canadian one expire and not get a korean one. You'll have to do it from scratch all over again when you get back.. know what i mean?
3)Well, not much you can do about the NR-73.... I'm not sure what will happen. Most likely nothing... but you basically gave them they right to check up on you. "Hey look at me I'm living abroad but I'd like you to check if I'm a resident or not" =)
Well canada and korea has a tax agreenment. But you know, In korea you'll most likely be paying around 4% of taxes in canada the number is much higher depending on your salary. You'll have to pay the difference... so say you piad 4% in korea and the taxes are 20% in canada you'll have to pay 16% more. At least, thats how i understand it. If you're paying taxes in Canada you're more than aloud to have access to OHIP and HST tax credits...
Honestly, if i were you.. I wouldn't worry about it too much. As long as you dont have too many ties , there wont be any problems. So as long as you dont own property/home/ have an apt in canada , if you dont have a spouse/kids left in canada, Don't own a car/registration in canada ... It's pretty clear in that way... It gets alot more complicated once you're an older expat with family, kids going to college ( in canada) , owning property, investments etc.... Someone like above would be in a whole different situation than say a college student just out of school =)... That being said, It's not unheard of some english teachers end up paying some taxes when they go back home but I've no clue what their situation was...
Thats why, if I had no plan to go back to canada anytime soon I would sever as many ties as i possibly can just so that its absolutely clear that I had no intentions of coming back ( which is what i did)... YOu can easily find websites online with expat tax information if you just take the time to google. |
|
| Back to top |
|
|
BobbyOrr
Joined: 01 Jun 2009
|
| Posted: Sun Nov 25, 2012 5:29 am Post subject: |
|
|
I didn't cancel my healthcare my first year away. I went into the office to get a new card when I got back home and the guy told me I should have cancelled it and normally I would have to wait 3 months before my insurance came back online.
But he waived all that and gave me a new card. This time around I went into the office and cancelled it.
Everyone civil servant I dealt with at the office in Kitchener were absolute sweethearts (i mean that sincerely). |
|
| Back to top |
|
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
