If you are a non-resident of Canada and are looking to know about your tax filing requirements as a non-resident, then this article is for you.
Despite what you may have heard, if you are a non-resident and your income originates in Canada you are still subject to annual tax reporting and will need to calculate your Canadian income tax.
If you are a Canadian living abroad here are a few things you may want to know about your income-tax filing requirements.
You are considered a Canadian tax resident if:
Your taxable income will also be calculated on the grounds of you having sold your property or encountered any capital loss or gain in Canada or if you ever owned a business in Canada.
Even if you live outside Canada you are still obliged to file your taxes for all income made within the country. Depending on your income and how it was generated will determine your requirements and tax obligations. Canada's Revenue Agency determines the status of the person on a case-by-case basis to determine the person's responsibilities. The status of a persons income tax reporting is usually determined by their:
Your residency plays a crucial role in determining your income tax requirements. For example, you are required to file:
Other determining factors that may determine your residence depending upon your circumstances are:
However, in general, if income is earned by a non-resident of Canada then the income is subject to tax under Part XIII or Part I.
Part I involves the income tax that you are required to pay based on the income you received during the tax year. Non-residents earn income that falls under one of two categories.
To find out your total gross income, you would need to file tax returns in order to fully understand your obligations.
You may need to include any earnings within your return and file on:
Part XIII of Canada's tax code defines what may be possible deductions depending upon:
The types of income that this category deals with include:
Your tax return has to be filed on or before June 1. However, if you or your spouse conduct any business in Canada then the date is extended to June 15.
If you have more tax-related questions related to your offshore business go here.
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