# Only 4 months in Canada -tax implications??



## steambug (Jul 25, 2011)

Hello, I am trying to figure out the best way to deal with our tricky situation..

Currently living in Europe (British citizens), moving to US for 3 years with husbands company, just been told we need to make a 4 month stopover in Canada on way to US. My husband has a work visa for both US and Canada. If we move straight to Canada we will have no permanent address. We have a choice: we could stay on a European contract or switch to US contract while we live in Canada. I am confused as to our tax situation, I presume we will have to pay Canada tax for the 4 months, we will not be paid in CAD but either EUR or USD. Can we work in Canada on a US contract and not pay US Tax? Can we just pay US tax and not Canadian tax?

Any help appreciated.


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## financialnoob (Feb 26, 2011)

I think it all depends on where your tax residence is. The CRA's page on this is here:

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

There are tax treaties between countries (like Canada and the US for example) to avoid paying double taxes for most people. I think higher-income (over $90K) might have to pay some additional taxes. Not sure what the situation is with the UK.

I just want to add that I'd strongly lean towards being paid in Euros instead of USD right now if given the choice. Maybe I'll feel differently about that in a week or so. Do you have a timeline on deciding?


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## OhGreatGuru (May 24, 2009)

You could explain the situation to CRA and try getting an opinion from them, although they are not noted for promptness. If you have more then one option, they would not necessarily give you advice on the best strategy, You may have to consult a professional. I suspect your status as a 4-month temporary resident/worker may be key.


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## balexis (Apr 4, 2009)

I investigated a similar issue, though it was more immigration-related than tax-related

My Canadian employer wanted to hire for a few months a European Union citizen that is currently visiting Canada on a tourism visa. The job is in IT so it can be done from anywhere.

I met with Immigration Canada to see what such a move would involve. Turns out the following:
Since my Employer also has a European Union office, that office could hire the EU citizen like it was a local hiring. Since the new employee would not be paid by a Canadian company, he is NOT considered entering the Canadian job market by Immigration Canada, so he does not have to get a work permit for Canada. As far as taxes go, we were told that taxes are payable to his country of residence inside the EU, Canada would have no involvement at all.

From what I understood, it really depends on WHO is paying you, and WHERE their office is located. 

This link may be a starting point:
http://www.cic.gc.ca/english/visit/business.asp


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## Simon_oa (Jul 26, 2011)

You will have to pay taxes on ur canadian income to canada

" An income tax shall be paid, as required
by this Act, on the taxable income for
each taxation year of every person resident in
Canada at any time in the year " says the law

In your country, you will also have to say you earned a salary.

But, in your country they will give you a deduction so you don't pay 2 taxes for one income.


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## Charlie (May 20, 2011)

it can get complicated. I suspect the company has looked at this -- they're on the hook for getting it wrong too. So talk to HR. As noted by balexis -- a short term stay on an out of country contract may not even count as canadian sourced income. 

In the 'grand scheme' you won't be double taxed -- as the US/CDA/UK are all treaty countries, and have foreign tax credit mechanisms. But the actual filing positions will depend on a number of factors. So talk to the HR people and see what they recommend.


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