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Expatax Services Ltd.
Laurie Yoon, C.P.A., C.A. |
Taking care of your taxes wherever your travels may take you.....
Specialist in Personal Income Taxes |
Canadians working abroad...
When Canadians start working abroad questions of residency arise. An hour or two of advice up front can save you a lot of grief by allowing you to organize your affairs properly to take maximum advantage of the tax rules and avoid any pitfalls that may not be obvious even to experienced international workers.
If you are moving to another country for at least a year along with your family you may be able to cease Canadian tax residency and as a result may not have to file Canadian tax returns any more. This is great in most cases as Canada's tax rates are generally higher than other countries in the world. There are a few exceptions however and if you are going to one of those places then it may not be in your best interests to cease Canadian tax residency.
I can help you determine whether you qualify to cease Canadian tax residency and whether that is a good idea in your particular situation. One of the factors involved in this decision is the extent to which you are subject to departure tax on your assets. Anyone ceasing Canadian tax residency is subject to capital gains tax on any accrued gains in things like non-registered brokerage accounts. Registered accounts such as Tax Free Savings Accounts, Registered Education Savings Plans and Registered Retirement Savings Plans are not subject to this. Canadian real estate is also not subject to this but foreign real estate is which catches things like U.S. vacation properties. One that can be quite expensive in terms of tax and difficult to figure out is if you have a private corporation with significant assets that you will not be winding up before leaving. There is a deferral mechanism available so all is not lost if you have significant assets that will attract this tax. Departure counseling before you leave will help ensure that you are aware of all the rules that will affect you and that you are not caught by surprise when it comes time to file your taxes.
In addition to counseling services, I offer full Canadian tax return preparation services while you are on your international assignment. This includes a departure return if you will be ceasing tax residency or annual regular Canadian returns if you are not. If you will be a non-resident of Canada and will be renting out your home while gone I can ensure that all required paperwork is completed such as NR6's, N4's and the non-resident tax return reporting any income or losses. If you are going to the U.S. I can also provide full U.S. tax return preparation services as required.
If you are moving to another country for at least a year along with your family you may be able to cease Canadian tax residency and as a result may not have to file Canadian tax returns any more. This is great in most cases as Canada's tax rates are generally higher than other countries in the world. There are a few exceptions however and if you are going to one of those places then it may not be in your best interests to cease Canadian tax residency.
I can help you determine whether you qualify to cease Canadian tax residency and whether that is a good idea in your particular situation. One of the factors involved in this decision is the extent to which you are subject to departure tax on your assets. Anyone ceasing Canadian tax residency is subject to capital gains tax on any accrued gains in things like non-registered brokerage accounts. Registered accounts such as Tax Free Savings Accounts, Registered Education Savings Plans and Registered Retirement Savings Plans are not subject to this. Canadian real estate is also not subject to this but foreign real estate is which catches things like U.S. vacation properties. One that can be quite expensive in terms of tax and difficult to figure out is if you have a private corporation with significant assets that you will not be winding up before leaving. There is a deferral mechanism available so all is not lost if you have significant assets that will attract this tax. Departure counseling before you leave will help ensure that you are aware of all the rules that will affect you and that you are not caught by surprise when it comes time to file your taxes.
In addition to counseling services, I offer full Canadian tax return preparation services while you are on your international assignment. This includes a departure return if you will be ceasing tax residency or annual regular Canadian returns if you are not. If you will be a non-resident of Canada and will be renting out your home while gone I can ensure that all required paperwork is completed such as NR6's, N4's and the non-resident tax return reporting any income or losses. If you are going to the U.S. I can also provide full U.S. tax return preparation services as required.
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Equalization Programs
I can also assist with tax equalization programs offered by employers. These are programs typically offered when an employee goes abroad to a higher tax jurisdiction and the company offers to pay any taxes dues at home or abroad that are more than what the employee would have paid had they stayed home earning their regular income. There are many flavours of equalization programs as this is something that is customized by each employer to their own situation and what they are willing to pay in compensation to their employees. Equalization programs can apply to a rotational, short or long term assignment depending on what the employer is offering. |