Canadian Tax Advice For Non-Resident Investors
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The work of collecting taxes in all jurisdictions around the world rests with revenue authorities. It is rare that such authorities collect taxes or returns from persons living outside their countries unless they have investment interests. In Canada, non-residents have obligations based on their status. Here is Canadian tax advice for non-resident investors according to a taxation expert.
It is safer to have a clear residency status. It is not mandatory that you stay in Canada to have taxation obligations. Ties of financial, investment, professional, etc nature mean that you have to pay taxes. The amount you are supposed to pay depends on the nature of these attachments. The regulations are very favorable to non-residents and are negotiated by countries to avoid double taxation.
If you routinely live in another country where your status is resident, you most likely will be regarded as a non-resident. This puts you in a bracket of persons with obligations because they have strong or weak ties with Canadians. In case you own a home in Canada, have dependents or people under common law in Canada, you are required to pay taxes. If your spouse lives in Canada, you may be eligible to pay taxes especially if you visit the country regularly.
Your status may also be affected by weak ties that are seemingly not binding. The authority considers the ties on individual bases since they are regarded as weak and can only be used where the strong ones do not apply. The ties include membership to social amenities like sport clubs and churches, owning a property like a car and possession of documents like health insurance card, passport or driving license.
Income that is generated by Canadian sources is taxed. In most cases, the taxes are deducted at the source. This leaves you with the obligation of declaring the income. This means that you must have declared your status to the entity making the deduction. The most common rate is 25 percent. There are treaties that would allow for lower rates. Consult a specialist to fully know your obligations.
CRA has made a provision for elective filing. This is an arrangement with countries that have taxation treaties with Canada. The details of these provisions can be obtained under Part XII. This section stipulates the circumstances and amounts to be deducted in each case. The money that is deducted under this provision is non-refundable. Though treaties exist, timber royalties, pensions and rental income are never exempt from taxes.
Employees of the government working within or outside Canada must pay requisite taxes. Their status is either factual or deemed residency, each with specific obligations. For example two solders employed by the government and living abroad have different obligations if one has a house in Canada while the other sold his before departing on mission.
For an American citizen working in Canada, your obligations are on income coming from work or investment in Canada. This is because of a treaty signed with the American government. There is a provision for waiver of withheld taxes under certain circumstances. Canadians employed by American companies are also affected by the treaty especially if they live in America.
It is safer to have a clear residency status. It is not mandatory that you stay in Canada to have taxation obligations. Ties of financial, investment, professional, etc nature mean that you have to pay taxes. The amount you are supposed to pay depends on the nature of these attachments. The regulations are very favorable to non-residents and are negotiated by countries to avoid double taxation.
If you routinely live in another country where your status is resident, you most likely will be regarded as a non-resident. This puts you in a bracket of persons with obligations because they have strong or weak ties with Canadians. In case you own a home in Canada, have dependents or people under common law in Canada, you are required to pay taxes. If your spouse lives in Canada, you may be eligible to pay taxes especially if you visit the country regularly.
Your status may also be affected by weak ties that are seemingly not binding. The authority considers the ties on individual bases since they are regarded as weak and can only be used where the strong ones do not apply. The ties include membership to social amenities like sport clubs and churches, owning a property like a car and possession of documents like health insurance card, passport or driving license.
Income that is generated by Canadian sources is taxed. In most cases, the taxes are deducted at the source. This leaves you with the obligation of declaring the income. This means that you must have declared your status to the entity making the deduction. The most common rate is 25 percent. There are treaties that would allow for lower rates. Consult a specialist to fully know your obligations.
CRA has made a provision for elective filing. This is an arrangement with countries that have taxation treaties with Canada. The details of these provisions can be obtained under Part XII. This section stipulates the circumstances and amounts to be deducted in each case. The money that is deducted under this provision is non-refundable. Though treaties exist, timber royalties, pensions and rental income are never exempt from taxes.
Employees of the government working within or outside Canada must pay requisite taxes. Their status is either factual or deemed residency, each with specific obligations. For example two solders employed by the government and living abroad have different obligations if one has a house in Canada while the other sold his before departing on mission.
For an American citizen working in Canada, your obligations are on income coming from work or investment in Canada. This is because of a treaty signed with the American government. There is a provision for waiver of withheld taxes under certain circumstances. Canadians employed by American companies are also affected by the treaty especially if they live in America.
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For constructive Canadian tax advice for non-resident investors, we invite you to use our website as a good source of info. Spend a few minutes exploring our web pages at http://www.taxca.com.
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