The Accounting and Tax

Awareness Key to Canadian Non-resident Tax Payment

Awareness Key to Canadian Non-resident Tax Payment

The golden rule of paying taxes all over the world applies to Canada as well: it is your prerogative to know the rules and follow them. When you are caught unaware or in the wrong, you cannot plead innocence on the assumption that you were not well-versed in the law. This is especially true for non-residents in a foreign country. After all, you need to abide by the law of the land or face severe consequences. In this blog post, we will wake you up to the tax payment scenario for non-residents of Canada.

Do You Qualify?

This is the first question that you should answer for yourself. There are some checkboxes that you need to tick to be considered as a non-resident in Canada. For starters, you should not have any substantial residential link to the country, in the form of property holdings. Or, you should have lived outside the country through the period of a year, unless you are working for the Canadian government and has been posted to a foreign country. In such cases, you are considered as a deemed resident.

Secondly, if you have lived for less than 183 days in a year in Canada, you are a non-resident. Even a part of a day on Canadian soil is considered a day of stay. However, if you are a resident of USA and commute to Canada, you can leave out the commuting days while counting your quota of 183 days in a year.

Thirdly, Canada has income tax treaties with several other foreign countries which exempt your income earned in Canada as liable to income tax laws. So, if you get that exemption because of a treaty between your country of origin and Canada, you can be considered as a non-resident tax payer of Canada.

What Next?

As is evident, you need to be well aware of your own situation before you think about how much tax you need to pay as a non-resident. Professionals working in a company usually have their income tax deducted from their earnings while businesspersons can submit their taxes through installments. It all depends on finding out where you stand and file taxes accordingly.

It’s better to have an experienced tax firm like The Accounting and Tax to handle your work as a non-resident in Canada. That way, you can avoid mistakes and pitfalls that can land you in trouble.