Do you have to pay taxes in Canada if you work overseas?
In today’s world, always working from your motherland isn’t the most ideal situation. But as an adult with a family, what happens to taxes when you work from overseas?
Canadians who work abroad may still have to pay Canadian income taxes. It is very crucial to ascertain the residency status prior to leaving the country for work purposes. The residency status is ascertained by the duration of time for which one is leaving the country, what relations will the person be making with the other country, for how long and how frequent are the person’s returns to the country and most importantly his/her residential ties to Canada.
The aforementioned criteria will determine whether the said person will be considered as a factual resident, or deemed resident, or a non-resident, or a deemed non-resident. And on the basis of this, the amount of income taxes to be paid to the Canadian Government will be determined.
But does a Canadian working overseas need to pay taxes in Canada?
If someone is working outside Canada on a temporary basis, they will be considered to be Factual Residents and they will have to pay taxes to the Canadian Government. But if they happen to work outside for an extended period of time, severing residential ties with Canada they will be rendered Deemed Residents and their taxation amount shall be set according to the nature of their emigration. If the person stays outside of Canada for one whole taxation year or stays inside Canada for less than 183 days a year, he shall be considered as a Non-Resident and he will be required to pay taxes on Canadian sources of Income. If the person is a factual resident or a deemed resident working and staying in a country which has a tax treaty with Canada, then he has to declare his Canadian sources of income and follow rules of any other non-resident Canadian.
A Canadian can stay outside of Canada but he will have to pay taxes in varying amounts which shall be decided by the time for which he shall be away from the country, nature of absence or emigration, relations with the person and the country, relations of Canada with the said country, etc. At The Accounting and Tax, we have some of the most experienced and best Tax Consultants in Canada who will be able to guide you on how you can pay your taxes smoothly while living overseas.
