Working abroad for 1-2 years - tax question

[Saniokca]

Hi all,

I might have an opportunity to work abroad for about 1-2 years through my firm. My question is who will I pay taxes to? My logic says just that country but will I owe anything to Canada? What about ei and cpp?

Thank you in advance!

[Spudd]

No clue, but since it's through your company, just ask HR and I'm sure they can tell you.

[stardancer]

http://www.cra-arc.gc.ca/ebci/cjcm/s...&Submit=Search

Since you will not be giving up your Canadian residency, you might have to pay taxes to both countries. Depending on the country, Canada might have a foreign tax treaty in which you would get credit on your Canadian return for at least part of the foreign taxes you paid. Some companies pay the taxes on your behalf; the company would then give you a T4 in Canadian $$ and a letter stating how much foreign tax you paid (to use on your Canadian return). Check out how this will come down with your HR department. Also check out whether the employment would be eligible for the Overseas Employment Credit.

CPP will be withheld from your paycheque if this is a Canadian company located in Canada. Not that sure of EI but I doubt foreign employment is eligible for EI.

[MoneyGal]

What SD said. To be crystal clear: Canada taxes citizens on worldwide income, no matter where it is earned.

[Four Pillars]

What SD said. To be crystal clear: Canada taxes citizens on worldwide income, no matter where it is earned.

Did you mean 'residents' rather than 'citizens'

[MoneyGal]

Residents has an ambiguous meaning for tax purposes. I was typing quickly. Here's a better statement: Canada taxes actual and deemed residents (so, those who are actually resident and those who are deemed resident for tax purposes) on worldwide income. "Citizens" captures most of those people (but you can be a citizen, living abroad, with no residential ties to Canada and thus no Canadian tax due...however this pool of people is smaller than residents who are not resident here but taxed as though they are).

I need a Venn diagram, and probably more coffee.

[Nemo2]

And...unless things have changed since I worked in the Magic Kingdom......non-resident status is granted (or not), rather than 'demanded'.

[Dopplegangerr]

If you are not earning income in Canada that what would you be paying taxes on?
I lived over seas on and off for ten years and have only made claims for the years I earned income in Canada. I checked with my accountant and with Revenue Canada and they both said this was fine.

[MoneyGal]

Detailed explanation: http://www.taxtips.ca/personaltax/whopaystax.htm

[indexxx]

If you stay out of Canada for two years to the day or more, you can claim non-residency status and pay no Canadian takes. to qualify you must show that you have cut most ties to residency, like no residential address (property ownership is fine as long as you don't claim to live there) nor provincial healthcare among a few other criteria. Basically you can't get the perks of residency (E.I. and CPP included) and expect to not pay Canadian taxes. I lived in the Caymans for five years, claimed non-residency, and paid zero tax on everything earned during that entire period. If you return before the two-year date, you owe on everything you've made up to that point. So I lost five years of CPP payments, but earned tax-free income.