Perhaps a fellow Canadian teacher might offer some insight into his question.
I have a Canadian teacher friend who left Canada about 5 years ago. He is not aware of this website, so I'm writing on his behalf. He only has a Canadian bank account and a Canadian drivers license. Therefore, he has almost no financial ties to Canada. His Canadian drivers license now is even expired. His question is as follows: When he wires his money back to Canada (Vancouver) from both his Singapore bank account and his retirement account here, is that taxed by Canada? His concern is that because of the large taxes in Canada, the tax department will treat that money as income and tax it.
Any insight on this would be appreciated. Thank you.
Rob
Off Topic- Taxes in Canada
More info is needed to make an accurate judgment, but if he is a teacher, who has spent less than six months in Canada in each of the last five years, then I would suggest that he is not due to pay any tax, as he would be considered non-resident. But again, he needs to research this. Plenty of info out there.
How do people work overseas, send money home, and not know this stuff?
How do people work overseas, send money home, and not know this stuff?
Comment
I agree with IAMBORG, hes not resident for tax purposes assuming hes maintained his distance throughout those 5 years.
@IAMBOG
Most people internalize that they pay taxes based on where their physical body is. We have this quid pro quo mentality that we shouldnt have to pay (taxes) for services and benefits we arent getting or potentially taking a advantage of. Out of sight is out of mind. Many Americans dont realize they are liable for taxes based on their world wide income regardless of where they are, of course the Foreign Tax Credit makes that amount zero for most ITs.
Lastly, Canada has one of the most convoluted tax systems, and for many Canadians working out of the country there is no clear check list or rule, or worksheet that allows them to determine if they owe and how much. You have to ask Revenue Canada for a determination.
@IAMBOG
Most people internalize that they pay taxes based on where their physical body is. We have this quid pro quo mentality that we shouldnt have to pay (taxes) for services and benefits we arent getting or potentially taking a advantage of. Out of sight is out of mind. Many Americans dont realize they are liable for taxes based on their world wide income regardless of where they are, of course the Foreign Tax Credit makes that amount zero for most ITs.
Lastly, Canada has one of the most convoluted tax systems, and for many Canadians working out of the country there is no clear check list or rule, or worksheet that allows them to determine if they owe and how much. You have to ask Revenue Canada for a determination.
I maintain my drivers license and have a bank account in Canada just for making my credit card payments. For tax purposes I have declared myself as a non resident.
To better answer your friends questions, I think he should call the CRA anonymously and ask them. With my past dealing with them, they are helpful and informative.
To better answer your friends questions, I think he should call the CRA anonymously and ask them. With my past dealing with them, they are helpful and informative.
You can internalize all you want, but burying your head in the sand can get you in a lot of trouble.
While the non-residency rules for Canadians are a little gray, it's not gray enough that a person has no idea at all whether they are resident or not. It's not a lottery system.
We maintain bank accounts, credit cards and driver's licenses. What we don't have is a property (you can have a property, as long as it is rented out), immediate family connections in Canada and we spend less than two months there every year. These are the three major thing the CRA look at look to establish residency. Driver's licenses / credit cards are secondary connections, that get looked at after the three primary connections have been looked at.
We've had150 Canadian teachers through our school in the last six years. According to our outgoing principal, nobody has had a problem declaring non-residency (to her knowledge).
While the non-residency rules for Canadians are a little gray, it's not gray enough that a person has no idea at all whether they are resident or not. It's not a lottery system.
We maintain bank accounts, credit cards and driver's licenses. What we don't have is a property (you can have a property, as long as it is rented out), immediate family connections in Canada and we spend less than two months there every year. These are the three major thing the CRA look at look to establish residency. Driver's licenses / credit cards are secondary connections, that get looked at after the three primary connections have been looked at.
We've had150 Canadian teachers through our school in the last six years. According to our outgoing principal, nobody has had a problem declaring non-residency (to her knowledge).
Thank you for the replies.
My friend called the CRA twice and explained to the representatives on the phone the situation. It seems he needs to complete 2 forms to establish his non-residency overseas, and those forms simply need to be completed before he files next year (2014) for this tax year (2013).
They did clearly indicate that since he is returning to Canada next month, when he files next year for this year, he must include all of the money he has made internationally this year (2013) even if he paid taxes on that money already in Singapore. That does not sound very reasonable, as you are paying taxes twice, but that was what they said. In other words, as long as he is a resident of Canada the last 4 months of this year, he would need to pay taxes on what he earned in Singapore also this year. The four years before that he does not, because during all of those years he was a non-resident.
Thought I'd pass on his experience to fellow Canadians. Thank you again.
Rob
My friend called the CRA twice and explained to the representatives on the phone the situation. It seems he needs to complete 2 forms to establish his non-residency overseas, and those forms simply need to be completed before he files next year (2014) for this tax year (2013).
They did clearly indicate that since he is returning to Canada next month, when he files next year for this year, he must include all of the money he has made internationally this year (2013) even if he paid taxes on that money already in Singapore. That does not sound very reasonable, as you are paying taxes twice, but that was what they said. In other words, as long as he is a resident of Canada the last 4 months of this year, he would need to pay taxes on what he earned in Singapore also this year. The four years before that he does not, because during all of those years he was a non-resident.
Thought I'd pass on his experience to fellow Canadians. Thank you again.
Rob
Rob, I'm pretty sure your friend was given the wrong info. If he has been out of the country for eight months this year he is effectively non-resident for the year. He should talk to someone else.
The best thing to do is just go back, don't say anything to CRA and then just fill out the tax forms next year.
The best thing to do is just go back, don't say anything to CRA and then just fill out the tax forms next year.
Comment
@IAMBOG
You were saying something about CRA being clear and easily understood?
I agree with you though, sticking your head in the sand and making assumptions isnt smart when it comes to finances.
@Rob
I would just pretend that any trip back to Canada didnt happen. They dont scan Canadian passports at port of entry into Canada. Just act as if you were never there.
CRA is all about collecting money, not advising citizens how to avoid paying.
You were saying something about CRA being clear and easily understood?
I agree with you though, sticking your head in the sand and making assumptions isnt smart when it comes to finances.
@Rob
I would just pretend that any trip back to Canada didnt happen. They dont scan Canadian passports at port of entry into Canada. Just act as if you were never there.
CRA is all about collecting money, not advising citizens how to avoid paying.
Your friend needs to get an accountant. If you can give me an email address I can pass on a name. She's from BC and is also non-resident. She's very reasonably priced.
As for keeping track of comings and goings, the Canadian government is way ahead of the UK in this respect. Departments are very well connected. Lying is not a good idea. Lieing low is.
As for keeping track of comings and goings, the Canadian government is way ahead of the UK in this respect. Departments are very well connected. Lying is not a good idea. Lieing low is.
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jbiersteker
- Posts: 121
- Joined: Sat Sep 29, 2012 10:38 am
A follow-up question (I hope I"m not hijacking the thread), but I met with my financial advisor today and he is having a bit of difficulty with the mutual fund companies and their resistance to allow us to invest once we're out of the country. I will take it that most people will send half their paycheque home (a wrong assumption?), that they probably don't let it just sit in the bank (therefore investing it) and that most Canadians desire to be non-residents. I'm curious to know what people are doing with their money sent home to Canada because last time I was overseas I just gave my mother power of attorney, sent the money home, and she invested it no problem. Is it more complicated or did I just get lucky last time?
Thanks!!
Thanks!!
Actually, I think that would make a great thread all on its own. I had the same question about whether Canadians should actually invest in Canada, if it is a point against them when considering non-residency. If not, then where?
Have you read Andrew Hallam's book, "poor Teacher"? Is doesn't mention this in there, but as he was an international teacher it might be worth posting a question on his blog.
Have you read Andrew Hallam's book, "poor Teacher"? Is doesn't mention this in there, but as he was an international teacher it might be worth posting a question on his blog.
Discussion
@Overhere
Have they changed things in the last couple of years? When I've been through Toronto Canadians just turned in their declaration card and walked by a border control officer? Do the capture/Scan Canadian passports now?
@IAMBOG
The UK and London has the most surveillance in city and country in the world.
@jbiersteker
Hong Kong finacial firms offer several investment options for retirement.
Have they changed things in the last couple of years? When I've been through Toronto Canadians just turned in their declaration card and walked by a border control officer? Do the capture/Scan Canadian passports now?
@IAMBOG
The UK and London has the most surveillance in city and country in the world.
@jbiersteker
Hong Kong finacial firms offer several investment options for retirement.