Canadian Taxes - Pay or not to Pay?

Hi all,

I realize this is a very old thread; however, I am in a similar situation regarding residency, and Canadian taxes. First, to clear up a misnomer (without getting into a heady political/moral debate):

Canadian citizenship is NOT tied to residency, or paying taxes for that matter. They are two distinctly different statuses (i.e. you can have Canadian citizenship and not be required to pay taxes).

Unlike the US, you do not have to "give up you nationality" in order to not pay taxes.

I have spoke to Revenue Canada, and several Canadian Expat tax specialists and they all concur:. Simply having a Canadian passport, and being a citizen, does not mean you're obligated to pay taxes. It is the responsibility of the Canadian, though, to determine whether or not they are residential required to file a return and report world income.

To address the issue of consular support, and applying/receiving a passport whilst living and working abroad, you pay outright for these services. Your tax paying dollars do not support this.

Look it up - Qatar does not have a tax treaty with Canada - however, some schools here require you have a non-resident for tax purposes from CRA in order to apply this. Until and unless you produce the document, they will deduct the taxes - these are the Canadian Schools here - doubt if any of the others care.

Greetings,

I am thinking of applying for teaching jobs in Qatar but would first like to know if Qatar actually has an income tax exemption agreement with Canada.

I am a Canadian citizen but who has lived and worked in France for the last 8 years. I have a FR residency permit.

Thanks in advance for your comments/help.

Canada (and I suspect many other G8 countries) does everything it can to tax those who leave to work overseas, whether you are a citizen or a landed immigrant. The Canada Revenue Agency (CRA) website has information about determining residency status, though it helps to have some tax knowledge to navigate to the documents you need. The website is:

www.cra-arc.gc.ca

Along the left you will see a link for 'A to Z Index.' Click there and look up residency for individuals. You should then find your way to documents called IT221 and NR73.

Residency is a question of fact, meaning that it depends upon your specific circumstances. This means that there is no objective test to determine residency; in fact, determining residency can be very subjective. Making it more problematic is the fact that Canada does not have a tax treaty with Qatar.

This means that when you determine your residency you should consult professional advice. In Canada, any of the National Chartered Accounting firms (such as Ernst and Young or Price Waterhouse Coopers) should be able to help you. A professional advisor can tell you how CRA might rule on your residency and, more importantly, how to change your circumstances (while complying with the law) to support a claim of non-residency.

Don't rely on advice you receive in a forum like this one - its worth spending a little $$ to consult professional advice and protect that $50k per year you might otherwise pay in tax.

You might also consider consulting a tax lawyer (as opposed to a Chartered Accountant) as conversations with lawyers are protected by privilege. (I.e.: CRA can force a accountant to reveal the name of a client, but cannot do the same to a lawyer).

In determining residency, CRA will look first to your primary residential ties, specifically:

- do you own a house in Canada?

- is you spouse (married or common law) still in Canada?

- do you have children still in Canada?

If you have a house and family in Canada it is likely that CRA would deem you to be a resident. But there are always mitigating factors. For example, it may not be wise (or even possible) to sell a house in Canada now. (For example, if your house is worth less than the mortgage value, there is little point in selling.) So CRA will not 'automatically' deem you a resident just because you own a house in Canada.

There are also secondary, less important considerations in determining residency. For example, CRA regards the following as indicators of residency:

- provincial medical insurance overage

- social ties in Canada (e.g.: church membership)

- personal property in Canada (e.g.: stored furniture)

- Canadian drivers licence

- a 'seasonal dwelling' (e.g.: cottage)

- a vehicle owned in Canada

- Canadian bank accounts, RRSP's, credit cards

As you can see, the list is quite comprehensive and, I believe, is designed to deem someone to be resident when in fact they are not. I hope your professional advisor can recommend the things you need to do to convince CRA that you are indeed a non-resident.

So seek advice before determining your residency status so you can ensure that you are not breaking any laws. Good luck.

Canada is place where everyone has an opporunity to live better and get educate and improve his life and MOST IMPORTANT help OTHERS by paying taxes to govt. if you are very stingy and want to have your own kingdom like Saudi and Qatar, then stay in those places and give up canadian nationality and try to get the nationality in those countries

Canada govt is trying to help poor people including refugees and everyone whatever they can do. I have seen people who came to Canada or born in Canada with no skills or education, stauing in jail, or as refugees, after sometime they got respectifull in society and getting job or business offer from all over the world. Some of them forgot their early days and starting blaming Canada. this is normal Human nature and no question about it

The loving part of Canada is more or less (almost) everyone enjoying life, living with family and have dinner with them everyday, outing together with family and friends

Its may not look on those who are paying more taxes however when you look in bigger picture, We all human and have right to live peacfully,together and share wealth as good human.

Welfare Poem

I cross ocean, poor and broke,

Take bus, see employment folk.

Nice man treat me good in there,

Say I need to see welfare.

Welfare say, 'You come no more,

We send cash right to your door.'

Welfare checks, they make you wealthy,

Medic aid it keep you healthy!

By and by, I got plenty money,

Thanks to you, Canadian dummy.

Write to friends in motherland,

Tell them 'come fast as you can.'

They come in turbans and Ford trucks,

I buy big house with welfare bucks

They come here, we live together,

More welfare checks -- it gets better!

Fourteen families, they moving in,

But neighbour's patience wearing thin.

Finally, white guy moves away,

Now I buy his house, and then I say,

'Find more aliens for house to rent.'

And in the yard I put a tent.

Send for family they just trash,

But they, too, draw the welfare cash!

Everything is very good,

And soon we own the neighbourhood.

We have hobby, it's called breeding,

Welfare pay for baby feeding.

Kids need dentist? Wife need pills?

We get free! We got no bills!

Canadian crazy! He pay all year,

To keep welfare running here.

We think Canada darn good place!

Too darn good for the white man race.

If they no like us, they can scram,

Got lots of room in Pakistan !

*******************************************

It is interesting that the federal government provides a single refugee with a monthly allowance of $1,890.00 and each can also get an additional $580.00 in social assistance for a total of $2,470.00.

This compares very well to a single pensioner who after contributing to the growth and development of Canada for 40 to 50 years only receives a monthly maximum of $1,012.00 in old age pension and Guaranteed Income Supplement. Maybe our pensioners should apply as refugees!

Its easy man, dont pay taxes mean just give up your canadian Nationality, its very easy if you dont happy with Canada.

If you are canadian citizen, you must have to pay TAXes.

When you come to Canada by Aeroplane, the airport was already build, someone paid this

when you come and drive to home, the highways and road was already build and someone paid already

same as, school, colleges, university and so many other things ...................

I do beleived that after living in Doha, the canadian system is much better.

After living in Canada and study, you were able to make fat income, Just see the labour in doha and thing, Canadian labour and system, the labour only make in doha 200 dollar as compare to when you were studying, how much you were making ..................

this is law and your have to follow the law if not, then give up your nationality and settle some other countries in this planet.

to monymoe.

1. It is not right to stereotype people like that. If Canadians are only known by loving hockey and drinking Tim Horton, you know what are the Arabs and Muslims are known for now adays... I bet you won't list that in their "qualities" :)

2. If you think it is alright to exploit every "loophole" in the system. Why you criticize refugees with 13 kids that live on child care benefits. They are just like you... exploiting the system. I see no difference between you and them.

3. The statement "salaries are not determined by passport solely because the nationality 'deserves' more" is not true in GCC. You get paid based on your nationality. Also there are special benefits for western nationalities, regardless of how much their education costs.

4. Would you enlighten us from when you get the $10,000 education cost figure for Indian and African that justify their low salary compared to your $40,000 education? This statement sounds racist.

So just be honest, if you do something wrong at least have the decency to admit it is wrong... not start bullshitting people.

1. Get the application for non-residency and read it thoroughly

2. You can own a house if (a) it is rented to a non-related third party and (b) the lease is yearly with at least a 3 month notice to vacate period before the expiry date of the lease

3. You can have a bank account so long as it is there for a purpose i.e. to deposit the rent cheques in and to move money for maintenance on the house.

4. Perhaps CRA can't check your earnings overseas directly, however, it is on YOU the tax payer to PROVE that the amount of money you declare IS the amount of money you earned. It is not CRA's problem to prove that you earned more or less.

5. If you are getting housing, tickets, medical, children's education allowance etc. etc. etc. These are considered taxable benefits by CRA and MUST be reported as income on your tax return.

6. Even if you don't file a return voluntarily, CRA can request and require you to do so - failure to do is an offence and you can be charged accordingly with fines and other penalties including jail (if they determine you are evading tax payments).

Get yourself the forms and information from online then contact a good tax accountant - not a lawyer - who has experience in these matters. It's not difficult to get non-residency status, just follow the rules.

Signature line > "You can't fix stupid"

When i lived in canada, i played by the rules; went there young and attended schooling and worked there, paid all my taxes, had zero involvement with anything shady and was even considered several times to work in the 'security' aspect of the govt, but guess what? The system is soooo flawed; there are sooo many blatant mistakes in the system that it makes no sense to continue to be a part of it, which is why i left.

Taxes are part of the social and legal contract you have to abide by when you live in a 'democratic' society. I studied political science and i accept that everyone pays taxes to fund services that not necessarily everyone needs. While in Canada, i did what was expected and more. but now that i am out because i no longer accept the social and legal contract imposed on me, i feel that there is no need to pay the ridiculous tax rates that the govt imposed in exchange for, well, nothing at all. IF you ever dealt with a canadian embassy you will see that their staff is so cold, so rude, and so self-absorbed yet it is YOU who is paying their 60k+ salaries a year *yes, a junior foreign service officer FS1 class makes that much plus other amounts to cover other expenses*; is that fair?

I am not bitter; but i hate for idiots to judge me so quickly when they know nothing about the situation i am speaking off. IF you want to pay taxes, go ahead; but if you have the option to go through a loophole, then why not use it? and yes, it is a loophole: creating a law that you cannot fully and completely impose means that there are loopholes; thats how lawyers win, would you say that all lawyers are dishonest cheating liars?

I believe you have a wholly wrong take on what a tax system is. Taxes are not payment for services received. I agree, I also have not received as many benefits as I have paid. For example, at my home in the US I do not get municipal or state or federal services such as water, sewer, garbage collection, public transportation, a public library, or police protection to name a few. But I choose to live here and I pay every penny of taxes owed and possibly more because I do not seek potentially shady loopholes. What interests me is why you are so angry with your native country. It seems unusual in one so young to be that bitter. Don't you find Canada a more fair, democratic and just place to live than many? And why do you think you have the right to determine what taxes you will pay? Does that also pertain to all? Seems the system would collapse under that idea!

Mandi

As i said, i paid enough for my taxes to earn the passport. The canadian passport - believe it or not - offers no protection abroad as most people claim. Canadians were amongst the last to be rescued from Lebanon; we've had a child soldier - born and raised in Canada - in Guantanamo on false charges for over 7 years; we've had a citizen since 1995 in Sudanese jails for more than 5 years who was cleared from any wrongdoing by both CSIS and the RCMP yet the Canadian govt refused to issue him a passport so he can travel back home to canada which is his constitutional right; and we've had a kid languishing in Saudi jails for almost 2 years on charges yet the govt is only NOW beginning to talk about his case and his unfair trail; so dont talk to me about protections that my passport offers because it offers absolutly none. A canadian is a canadian whether he got the citizenship through birth or through immigration, yet our government picks and chooses who to help and who to not help and so far only white canadians have been getting the support, so why should i pay for it? If i will forever be labelled and treated as an immigrant then i might as well use the passport just as the government has used me.

As for my fat salary; salaries are not determined by passport solely because the nationality 'deserves' more; my education cost me $40,000 compared to as little as $10,000 that an african or an indian or another arab would have to pay in their home countries (if they have to pay at all). There has to be a reason to work in the middle east so i get the additional 20-30%; if an employer chooses not to pay me they dont have to, but they do :) So no need to call me dishonest or assume things about me; i paid my taxes like a good citizen and when the time came for me to recieve the help i expected from my govt, i got denied while people who were not even citizens and paid no taxes were getting all the support they needed and more. so i asked the question once already: give me one good reason to pay taxes for services i did not, cannot and will not receive.

So yea, as i said; when the Canadian government pays me back every dime i paid in taxes for services i did not use and reverses time for every minute i spent in Canada, i will gladly give up the citizenship. Until then, i have the lovely little blue book and i expect no help from the canadian govt or their representatives: especially considering that the embassy staff out here in the GCC are some of the most obnoxious overpaid undeserving waste of human flesh ive ever met in life.

and by the way, i am sure NO SINGLE ONE out of thousands who have been rescued by the canadian ships from lebanon in 2005, was paying any taxes.. but when tough time came, they all of a sudden remembered they are canadians, and were waving their canadian passports and were screaming and yelling why their canadian government doesn't care about them,

*********************

"What lies behind us and what lies before us are small compared to what lies within us."

Oliver Wendell Holmes

monymoe, that;s what i was going to say, but mandi has said it:

ok you don;t use this, you don't use that.. but you still use canadian passport, and i pretty sure it gives you an extra fat piece of bread....

give a citizenship up, be honest... ops what am i talking about? you cannot be honest, you have just taught Nadine how to cheat the Revenue canada.. it looks like you even don't find anything wrong with cheating...is it in your blood?

*********************

"What lies behind us and what lies before us are small compared to what lies within us."

Oliver Wendell Holmes

Obviously ...

Mandi

hahahha

the day Canada pays me back every cent of my money and every second of my time i spent in getting the canadian passport is the day i GLADLY give it up. A country whose political leadership judges people based on skin and ethnic background is not a country i signed up to be a part of.

I absolutely agree with you - it's time to give up your Canadian citizenship.

Mandi

you dont live in canada

you dont use the services your taxes would pay for

why would you continue to pay taxes?

explain that if you can, and cut the crap out please; we are not talking about morals and ethics; we are talking about money -- hard earned money that is better off going to you and not to fund something you will definitely surely positively not use.

Monymoe's suggestions as to reasonable behaviour remind me of a project manager here who could not see that denying payments due to people who had completed their work on bogus technicalities was basically theft. His reasoning was that as no money went into his own pocket no theft was involved despite the serious costs in banking terms these delays cost the unfortunates! Suggest that Monymoe returns to Canada and spends some time absorbing the culture of his adopted country where fair play, adapted from centuries of English common law, has evolved a system of people identifying where the right course of action should be. This has been eroded from the Reagan/Thatcher era but is coming back. People have an innate judgemental ability about what is fair, unfortunately people who cannot understand that society is not functional without the acceptance of common standards will not learn unless they live in one of the many many states failing their own citizens by adopting tax policies favoring the super-rich. Do I really have to give examples of such failing states?

Because you are declaring an income you know not to be true and because you suggested that the employer submit a false wages statement. That's my first clue. Did your momma teach you that it wasn't really a lie if she didn't catch you with that cookie? I just never knew that one could pay only as much in taxes as one wishes!

Mandi

mandi:

how is it lying if no one can prove that it is a lie? Rev Can has no jurisdiction in Qatar nor on the company I would be working for. My employer has no reason to submit any information to Rev Can. The Qatari government has no right to force a company in its territory to submit information to Rev Can; so the way i am seeing it, this is a loophole! what matters in the end is that Rev Can gets its money if its entitled to it; everything else is entirely dependant on how generous u r feeling towards the govt.

Moneymoe, I think you are confusing the terms "logical," "legal" and "loophole." It may not be logical to pay more taxes than you think fair, but it is obviously legal. And lying about how much you make isn't a loophole. I'm afraid you really don't get to choose your tax bracket, especially by subterfuge!

Mandi

PEACE!!!Guys chill out a little!! We are all trying to sort out an issue for "Nadine" and I guess she does not even visit this all the site and she is not even in any real hurry to sort this out. Why we are wasting our energy on this matter anymore? If anybody reads the thread, I think so many of us already told "Nadine" that she can keep her 4000 SQFT house and applies for a non-residency, just need to rent the house to somebody, but guess nobody is listening. :)

Come on guys, this is Thursday, we should all enjoy rest of the week.

BTW,lusitano are you a Canadian? Just asking because it shows that you're from Prtugal.

Have a nice weekend everybody!!!

of course; i am an arab and i am a muslim.

i can list you traits and qualities of what defines an arab person; from heritage and culture to physical appearance. I can define what a muslim is too.

can you define what a 'Canadian' is? Other than someone who drinks tim hortons, enjoys hockey, likes chicken wings and is overly polite and nice to others?

one thing you sure proved was your own words:

"what i am and what my papers say are two very, very different things."

My loyalty to the nation has absolutly nothing to do with paying a ridiculous amount of tax; you have your morals and legal understanding of whats going on in a completely jumbled up way lol.

the law requires me to pay taxes on my income if i want to continue to be a resident of canada. the law has no way of finding out how much you make :) its a nice little loophole which you believe that exploiting it would constitute treason and disloyalty to canada hahahahahahahahahahahah holy lord that was hilarious

Nadine,

You CAN keep your house. Many Canadians here do just that. they rent their houses and that income is taxable. It must be 'arms length'.

But why are you posting if you haven't even received a job offer in Qatar? As for your living standards? Who in the world would supply you a home theatre? I think you are trolling here...

it does when one cherry picks compliance to laws of a nation. if its so bad, why did you swear your loyalty to such a nation?

Does that make any difference?

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html

why did you become a canadian?!

Absolutely not! Where do you see anything in my posts advising anyone here to abuse the canadian system? She will not use any of the services paid by her taxes, so why should she continue to pay so highly for them? Justify that to me if you can! Telling me "those are the rules" isnt a justification btw.

go to canada and see for yourself how many 'canadians' there are; dont assume things, it makes an a$$ out of u and me.

but mostly u.

those who take advantage of the Canadian system - isn't it what you are advising Nadine to do?

I dont care to know someone who passes judgements faster than... ah never mind, itd be rude.

how did i criticize those who behave and think like me? do you even read the posts before you reply?

monymoe,

if you knew me, you wouldn't waste your time sending me there.

the only reason I commented on your post was because you are criticizing those who behave and think like yourself!

i have figured that, that is why i wrote "canadian".

Mandi: It is in no way illegal; you are still paying your taxes, although at a rate you deem much fairer to you. Is it logical to pay 45%+ tax rate for services you cannot use? I think not!! U choose how much the govt should know,p and pay according to that, there is nothing illegal about this.

Lusitano: I am an Arab and a Muslim first and foremost. Living in canada and interacting with people from all over the world and from different backgrounds helped shape me and make me a better person for sure, but what i am and what my papers say are two very, very different things. I do not feel the need to 'act' canadian; my papers may say whatever they want to say, the fact remains that you cannot buy a culture and a religion, but you definitely can buy a citizenship.

I think i would have a better view of Canada if i was not treated like shit by them; working since the age of 17 and paying taxes since 18, i tried to get unemployment insurance at the age of 24 after being laid off, and i was denied. All of my taxes go to pay some refugee who will have kids who will rob me when im older, or go to a white canadian that chose to do jack all while i studied and worked my ass off. Yea, thank you canada :) be fair to me and i will be fair back.

monymoe, I agree with the last part of your post regarding "refugees who have 13 kids and collect child support cheques from the govt".. they do not have my sympathy either... Moreover, many of these refugees are from the countries which hate western values, western lifestyle as well as westerners themselves... these refugees only love western fat cheques, and free houses from the government...

*********************

"What lies behind us and what lies before us are small compared to what lies within us."

Oliver Wendell Holmes

monymoe,

wow, what a "canadian" you are!

Why? Uhh, because it's illegal not to? Dunno about you but I'd be pretty embarrassed to ask my employer (in a financial institution, no less, where I was monitoring the money) to lie about my income for the purpose of not paying my taxes. Just my opinion ...

Mandi

Nadine:

The canadian govt has absolutely no way of finding out how much u r really making out in Qatar (unless you are working for a canadian company of course). Canada and Qatar do not share any tax or financial agreements, and - as far as i know - Qatari companies only submit your salary info to the Qatari govt as part of a labour contract and not for any other purpose. Canada cannot have access to Qatar's ministry of labour records and does not have any legal right to even ask for it, so the only source for Revenue Canada to know how much you make is by taking your word for it; this is where your generosity and sincereness comes into play :) The solution to your problem is very, very easy: get a letter from your employer in qatar saying that ur salary is only 20k a month (or less if u want!), with everything else being provided for you (car, house, airtickets, medical insurance). You will only be expected to pay tax on the 20,000QR; which amounts to about $5,500CAD a month; so just a little bit over $65,000CAD a year, putting you in the 30-35% tax bracket instead of the 45%+ bracket ud be in if you were to declare your full potential salary of 60-70,000QR a month. oh, and the company in Qatar is free from any liability because the Canadian government does not have the legal jurisdiction to demand a foreign company to provide 'accurate' financial info about you. So my advice to you is to be very nice with your HR manager :) And to make you even more certain about the lack of any legal ramifications: companies in Qatar often operate as seperate legal entities than their parent companies, and so are not under any circumstance obliged to play along canadian rules.

as for the ridiculous talk in the first post about paying my taxes to help the others: quit living a philosophical dream, k? Canada offers you ABSOLUTLY nothing for free. School? Health Care? highways? safety? security? you pay for it with your taxes, and you pay VERY much for it. I got no aid from the canadian government, i paid for every single service i got, from garbage collection to getting my passport renewed: every single action was for a fee, so dont tell me that i should be expected to 'help' others get the same services i got: i paid for them, so should they. And frankly, i dont feel very much inclined to pay for those who are too poor to afford things: canadians who chose to get high or drunk during their highschool and so didnt get an education, or refugees who have 13 kids and collect child support cheques from the govt do not have my sympathy.

oh and by the way, as a former employee of the federal government of canada i should mention that the amount of money wasted on their employees is absolutly mind numbing; give me just ONE good reason why i should continue to pay taxes while i am abroad to fatten up some incompetant person's already fat pockets?

oh dear!!!!!!!!!!!!!

for the oficial reply, you may consult:

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html

Thanks Qatarisun...

The house is magnifico! That is why I can let it go, I have designed it, and it sits on the ridge of a hill in Calgary, beside the Olympic Park, great views of city and Rocky Mountains... To let it go is really sad.

I have just rented it for the first time, it was easy to find a top dollar client and I am paying my taxes. But now the questions is, is it worth paying all these taxes when I am not there anymore??? I am trying to debate this by evaluating my option before letting it go, in the end, I think I will need to... Then again, it will also depend on the job offer.

My other worry is negotiating with Qatar employer, Can you offer me accommodation with such high standards that I am accustomed to. 4000 sqft, all latest gadgets, stainless steel wolf appliances, wireless lighting, home theatre, great views... Is it acceptable to ask for such luxury in job offer! I have never is such position.

Sincerly,

Sincerely,

This is what I have found out at cramagazine.com and it says you can apply for a non-residency if you rent your house to a third party:

Canadian Real Property and Canadian Residency for Tax Purposes

It is a common misconception that the mere ownership of real property in Canada causes one to be viewed as a Canadian resident for tax purposes by the Canada Revenue Agency (CRA). Although the ownership of Canadian real property could be seen as a significant residential tie to Canada, there are steps that can be taken to mitigate this. For example, the real property could be rented to an arm’s length party at fair market value, preferably under a long term lease. By doing so, CRA should not view this as a significant residential tie to Canada when making a residency determination. On the other hand, leaving a vacant home in Canada available for regular and continuous use could send the message to CRA that an individual may be a resident of Canada for tax purposes. As well, renting the home to family members, or simply allowing family members to use the home rent-free is likely to send a similar message to CRA. If an individual is found to be a resident of Canada for tax purposes, he/she is taxed on worldwide income which could significantly increase world-wide tax liability.

Nadine,

If you keep a property in Canada (not to mention if you rent it), you do not qualify as a non-resident and therefore you are eligible to pay in-come taxes in Canada.

Before leaving Canada, I have asked my financial advisor about this. He told me the best person to speak about this would be Deloitte Touche (will be expensive) or just book an appointment with H&R Block. I was considering to talk to H&R Block , but never got that time. :)

But,I still think you can keep the house and filed for a non-resedency if you rent the house to a third party. I think you will need to serve 18 months waiting period before applying for a non-residency. To me there is no way I will sell my house, we have lots of memories in there.

Good luck. Let us know what did you find out.

Merci Beaucoup mmyke!

Yes, this is a priority for me to retain a good Tax Lawyer, I will seek into it upon confirmation of employment.

Sincerely et a plus tard!

Thank you for your comments..

In proceeding with this 3rd party renting, will CRA consider renting my primary residence as a "Deemed Disposition"? Will I be subject to capital gain liability? Is there an election to differ payment of this tax liability from this deemed disposition?

I will look into the CRA link shortly,

Got to go.

NadineS, if you always work out of Canada, why do you need a house there? Is that house locked for years, since no one lives there? Or it is rented? If it is rented, I guess it is quiet fair to pay taxes.

My point is since you don’t live in Canada for years, you obviously shouldn't have ties with this country (except of may be family ties and emotional ties)...So just declare a non-residence.

*********************

"What lies behind us and what lies before us are small compared to what lies within us."

Oliver Wendell Holmes

Nadine,

For you not to pay Canadian income taxes, you have to qualify for the status of "non-resident".

If you don't qualify (because you choose to maintain your home there or any other reason), you are eligible to pay taxes on your income, regardless where you work.

I know it's unfair and non-sense - it only stimulates Canadians to get rid of their assets and anot to invest back in Canada, when working abroad - but that's the law!

,,,it is whether you are "a resident of Canada for tax purposes" that is the test.

If you are offshore, it depends on your ties to Canada which determines tax residency. These ties include whether your still own property, personal or real estate, bank accounts, memberships to professional organizations etc. The more ties the greater the chances that the revenue department will determine if they consider your a resident for tax purposes.

That being said, the ultimate decision for the determination lies with the courts.If it were up to the CRA no-one would lose their tax residency status. The list of the "ties" that bind is acodification of what exists in the court's caselaw, and your best bet is to contact a tax lawyer who can make an assessment for you. There are accountants who are up to speed on this, but 95% of them call their tax-lawyer buddy to see what the state of the law is at any given moment.

Further, it is not necessarily best to ask for a determination from the CRA as regards your status. If there is any way they can keep you hooked, they will. If they make a determination that your are still liable to pay taxes, then you have to fight that too if you are trying to be otherwise....retain good legal counsel to give you an opinion,,,,if anything goes wrong afterwards the lawyer will have an insurance program to protect you most likely....

Bonne chance!

MJM

Hello,

According to IT-221R3, I think you can still keep your house in Canada, but you need to rent it to a third party and the house should not be avaialble for your immediate usage. (http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html )-->

Where an individual who leaves Canada keeps a dwelling place in Canada (whether owned or leased), available for his or her occupation, that dwelling place will be considered to be a significant residential tie with Canada during the individual's stay abroad. However, if an individual leases a dwelling place located in Canada to a third party on arm's length terms and conditions, the CCRA will take into account all of the circumstances of the situation (including the relationship between the individual and the third party, the real estate market at the time of the individual's departure from Canada, and the purpose of the stay abroad), and may not consider the dwelling place to be a significant residential tie with Canada except when taken together with other residential ties (see ¶ 17 for an example of this situation and see ¶ 9 for a discussion of the significance of secondary residential ties).

Cheers

Time for me to go sleep, it is very late. Thanks a million, you have be such a great help. Good night.

Ooooooh, ahhhhhh ...

Mandi

That sounds lovely and I Love acreages. I have a large plot, suburb kind of home in an Estate, with views of the Rocky Mountains as well as the City. Because my home on the ridge of one of the highest hills in the city (Beside Calgary Olympic(1988) Park), and being already at 1500m above see level, when low clouds come around, my home is above the clouds, it is so unique. It's like looking out in the backyard, you have clouds below the house covering the city lights and you look up and it is all clear for stars to shine. This is the memory I cling on every time I think of home. I am missing it now...

Yeah, we chose to keep our home. Built it about 10 years ago on 50-plus acres then went to the Gulf a year later! But right now I'm upstairs looking out over our green, rolling hills with wild turkey and deer and very glad we did it. Back to Doha in July, which I also love. Gives me a chance to be a city girl with a social life there.

Mandi

Tax man, grrr! I feel the same, I build my house, designed it, and believe me, it is a ultra modern beauty... I hate to think I need to sell it so I can save taxes which is nearly 50k a yr of taxes...

That is a big chunk of change, and I am sad to think that I may loose my home, because in the end, let say after a few years, the equity you build to keep a home, is now costly... I will be homeless, that is how I feel.

Oh well, that life.

Unfortunately you only find out when the IRS makes an issue of it and then you owe the back taxes (and penalties.) Yes, very frustrating. They will NOT make a determination in advance.

Mandi

I see, and that can be argued or become a frustrating point... Imagine working in the middle east, traveling back and forth for your employer in LA (39 days), but your home town is let say, NY, which you did not visit. Will you be subject to taxes if you came on the basis of business only, with proven receipts let say, that 39days were not personal?

One of the problems with the $87,500 federal tax exemption for foreign income is that you must meet certain criteria to be eligible. One of the requirements is that one not be in the US for more than 35 days a year. Sometimes that's not possible to meet.

Thanks for sharing this info. Do you know that is the approx tax free income bracket where you are not taxed?

Nadine

Well, yes, from the GCC's perpective, it IS tax-free. They don't have income taxes. And it's only the US and Canada that tax overseas-earned income. For the other 99% of ex-pats, it is truly tax-free. (And we pay about 35% also.)

Mandi

Thank you for your point of views

I do not mind paying taxes, which I do anyway, but it does sucks too... Tax avoidance is a natural behavior, I believe that most people do not like paying taxes, one way or another, we all like to avoid the tax man. Unless paying taxes makes you feel good, that is great too, very honorable.

The main reason I wanted to raise these questions are as follows: why is it that GCC countries advertise tax free salaries to expats in attracting foreigners to work for them, when in the end, we are paying taxes either way? (I am gearing this question specific to Canada/US)

If GCC countries had a tax system, negotiate tax treaties with western countries, these revenues would benefit the GCC Countries and used to enhance public programs, etc. Not saying that GCC countries do not have the money to do so already. So, in the end, western countries are getting these tax perks (foreign taxes) from the GCC deep pockets... In a way, it like a free handout from rich Gulf Arabians...

This topic is raised on the matter of tax treatment, US taxes are so different than Canadian. US tax treatment is reasonable for the average "Joe the plumber", like most of us are... US citizens get a some kinda of free income tax bracket (85k or so) where your income is not taxable. Please correct me if I am wrong, it has been a while I have come across this matter.

In Canada, we are taxed nearly 35% to 45% on all income, depending on your tax bracket, the more you make, the more they take... unless I break ties with my home country... That is the sad part. I wish to retain my house as well, but I also wish to have a free income tax bracket... These Canadian policies are not as reasonable, particularly when you want to gain international experience, and on the other hand, your salary is negotiated on a tax free basis??? That is the questionable motive of raising this issue... What do you think? Maybe it is a perspective worth discussing!

Nevertheless, it is interesting topic. Thanks for sharing and reacting to my posting.

P.s. Western countries are founded by people from all over the world, they are truly multi-cultural countries. My mother is a 14th generation french Canadian which came in the 1690's, and sweated and fought wars on this land since, as for My father, an Egyptian University professor, who came to Canada in the 1960's, becoming part of the cultural fabric of the nation.

It is sad to see that some people think that immigrants who goes to western countries, is just for passports and money... Who can blame them, we do not live in a world where we are all equal... and, on the other hand, we all dream of a better future, no matter where we are from. It not all about passports and greed, but about opportunities, families building homes and countries, and cultural diversity that is now globalized.

On the other hand, I can understand why some people return to the middle east after getting a passport, experience or studies, because life is rough out there, lots of drugs, guns and gangs, costly education and medical care, particularly in the US.

As for myself, I came to the middle east not for better salary, and to assume that is the main reason why most people go to the middle east is simplistic at best. The main reason for me is when I will have children, they will learn Islamic traditions, Arabic language and a unique cultural experience away from deprivation of the west where teenagers think of sex at 10, whereas here, teenagers has a chance to live in freedom from peer pressure of the flesh.

Sincerely,

Nadine, ;)

Well, I'm an American taxpayer and believe me we pay on every penny! I guess I look at it this way - the US gave us a free ride through high school and a state-subsidized university education. We have lived well in America with a good road and air transportation system, good communications and utilities, libraries, snow removal (just to name those close to my heart) and a passport that gives us a lot of freeom in this world. Now is the time we are paying back for the privileges of citizenship.

Mandi

I find this question objectionable!

I know many people here who sweated to get US/Canadian/UK citizenship by staying the minimum time there, availing of all benefits available in such countries including social benefits, education, healthcare etc. until the time came when they could return to the middle east with the magic passport which grants them protection and an income many times more than their contemporaries who did not adopt this course of action. You must understand that your taxes are used for the people who need the same aid you got then, when you contributed nothing, and for you when in the future you claim the benefits that such a stable country provides.

STOP THINKING OF HOW THE WORLD AFFECTS YOU, EXAMINE YOUR OWN MOTIVES HERE, GREED AND SELF INTEREST, OR ACCEPTANCE OF A PHILOSOPHY THAT HELPS IMMIGRANTS TO ACHIEVE SUCCESS ENOUGH TO BE ABLE TO REAP THE BENEFITS OF MOVING TO A TAX FREE AREA WITHOUT REPAYING SOME OF THE DEBT YOU OWE TO THE COUNTRY.