What You Need to Know About Taxes As a Canadian Living Abroad
Living abroad is a dream for many Canadians–whether it is to pursue a new career, immerse in a different culture, or simply explore new opportunities in life. But as exciting as international adventures may be, they come with a lot of questions about your tax obligations.
If you are a Canadian living abroad you may have a lot of questions about paying your taxes and how to do it when living abroad. We are here to answer your questions so you can stay compliant and avoid issues with the tax court of Canada!
Canadian Taxes and Residency Status
One of the biggest factors in determining your tax obligations while living abroad is your residency status in Canada. Are you considered a non-resident? Or are you a deemed resident?
Non-Resident for Tax Purposes
If you are living abroad and have cut ties with Canada, like selling your home, not having dependents or a spouse living in Canada, and staying less than 183 days in a year, you may be considered a non-resident. As a non-resident, you are generally only required to pay Canadian taxes on income earned in Canada.
Deemed Resident
Some Canadians living abroad, like those working for the federal or provincial government or the Canadian Armed Forces, can be considered “deemed residents.” Even if you don’t have strong residential ties to Canada, the CRA may classify you as a deemed resident for tax purposes if you spend more than 183 days abroad. This means you will still be required to file taxes in Canada on your worldwide income.
The Role of Tax Treaties in Taxation
Canada has signed tax treaties with many countries to avoid double taxation. These agreements ensure you aren’t taxed twice on the same income—once in Canada and again in the country you’re living in. If you’re living in a country that has a tax treaty with Canada, these treaties can significantly affect the taxes you owe. To see if this applies to you, consult an experienced tax lawyer.
Filing Your Taxes as a Canadian Abroad
Even if you’re living outside of Canada, your tax filing responsibilities do not end. Whether you are a non-resident or a deemed resident, you need to report your income to the CRA if you have Canadian-source income. The filing process can be a bit complex, especially when factoring in international tax treaties or foreign income, but the CRA provides guidelines for both non-residents and deemed residents. Here are some things to keep in mind for filing:
Deadlines
The general tax filing deadline for Canadians is April 30. If you are self-employed or have a spouse who is, the deadline extends to June 15. However, if you owe taxes, payments are due by April 30 to avoid interest.
Required Documentation
Keep track of global income, Canadian-source income, tax paid abroad, and any relevant financial documents. This will be vital when filing your return.
Why You Need a Tax Lawyer
Tax laws can be intricate, especially when you are dealing with cross-border taxation. You don’t want to miss out on potential savings, or worse, end up on the wrong side of the law. A tax lawyer can guide you through the complexities of Canadian taxes, help you navigate tax treaties, and ensure you comply with all necessary filing requirements.
At Taxpayer Law, our tax lawyers are here to help expats navigate the complexities of Canadian taxes and ensure compliance with both Canadian and international tax laws.
We understand that every individual’s situation is unique, and we are dedicated to helping you minimize your tax burden while avoiding costly mistakes.
Reach out today to get the expert support you need to manage your Canadian taxes confidently and effectively.
