Non-Resident Taxation Policies for Canadian Non-Residents

October 16th, 2020 by admin Leave a reply »

Canada’s tax system is similar to that of many countries. Employers and other payers usually deduct taxes from the income they pay you, and people with business income usually pay their taxes by installments. Under Canada’s tax system, you have the right and the responsibility to determine your income tax status and make sure you pay your required amount of taxes for each year according to the law.

As per the regulations that are cited in the non-resident taxation policy of the Canadian Revenue Agency (CRA), any nonresident that offers service in Canada and earns an income out of it is liable to pay nonresident tax. So, you should be aware of the entitlements, the rights and the obligations that you face when receiving such income if you are a non-resident who is offering services or plan to offer your services in Canada.

The Canadian non-resident taxation policies can be a bit confusing for people as there are a lot of different rules in the taxation laws and if you are not aware of the terms that are used typically in taxation, then you may find it even more difficult to understand. Some of the nonresidents are exempted from tax as per the tax treaties that are signed between the respective countries and some of the income have to be taxed like it is done for Canadian residents.

You were a non-resident of Canada for tax purposes if one of the following situations applies to you:

• You did not have significant residential ties in Canada and you lived outside Canada throughout the year, except if you were a deemed resident of Canada. For example, you could be a deemed resident of Canada if you were an employee of the Government of Canada posted abroad.

• You did not have significant residential ties in Canada and you stayed in Canada for less than 183 days in the year. Any day or part of a day spent in Canada counts as a day. If you lived in the United States and commuted to work in Canada, do not include commuting days in the calculation; Or

• You were deemed not to be resident in Canada under the Income Tax Act because of the provisions of a tax treaty Canada has with another country.

If you are facing any problems with the Canadian taxation of nonresidents, then it is a good option to seek the services of a tax expert who has specialized in dealing with non-resident taxation issues. Such tax experts will have very good knowledge of the various problems that arise due to Canadian nonresident tax and also the options available to you to get over the issue you are facing currently. But it is very important to select a tax expert who has the expertise and also the experience in handling such issues as problems related to nonresidents can get ugly if not properly handled.


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