Canadian Tax

The information in this website is for general information only. Individuals and businesses should obtain independent professional tax advice.

Circular 230 (U.S. Treasury Department) disclosure: The information included in this website is not intended or written to be used, and it cannot be used by any taxpayer, for the purposes of avoiding federal tax penalties that may be imposed on the taxpayer.


CANADIAN TAXATION TOPICS

INBOUND
(e.g. New immigrant; Returning Canadian person; Individual coming to work in Canada; etc.)

- Canadian "resident" is subject to tax on worldwide income
- Are you a Canadian resident? Primary and other residential ties to Canada
- Consider pre-Canadian residency tax planning
- Consider any tax consequences that can arise from leaving the previous country (e.g. does country have "departure tax" consequences? will there be "disposition" taxes arising from emigration?)
- May simultaneously be a resident of another country depending on circumstance; consult Tax treaty for "tie-breaker"
- Assets held upon Canadian residency (e.g. determine and document "cost" for Canadian tax purposes)
- Canadian tax return filing obligation (resident reports worldwide income)
- Avoidance of double-taxation using income tax treaty (if any)
- Foreign source income? Use of foreign tax credit against Canadian tax


OUTBOUND
(e.g. Emigrant; Leaving Canada to work or live overseas; etc.)

- Are you still considered a Canadian "resident"? Primary and other residential ties to Canada
- Do you want to continue being a Canadian resident? Plan accordingly.
- Do you want to cease Canadian residency? Plan accordingly.
- Consider pre-departure tax planning (tax consequences of ceasing residency; departure tax; consider election to adjust basis where available under treaty; etc.)
- Canadian tax return filing obligation (even if non-resident, individual has obligation to file and report Canadian source income)
- Canadian tax withholding on certain Canadian source income earned by non-resident (e.g. services rendered in Canada; interest, dividend, or rent from Canadian payers; etc.)


NON-RESIDENT OF CANADA
- owning Canadian real estate (Canadian tax compliance, file tax returns, file withholding waiver requests)
- rendering services in Canada (payor required to withhold tax in respect of services in Canada; tax compliance)
- selling Canadian real estate (buyer required to withhold tax; consider applying with CRA in order to reduce withholding)
- earning Canadian source investment income such as interest, dividend, royalty, etc. (payor required to withhold tax)