Canadian Money Forum banner

1 - 9 of 9 Posts

·
Registered
Joined
·
3 Posts
Discussion Starter #1
Hi,
I lived and worked in Canada for 3 years and had to leave the country last year because my work permit expired.
I went back to my home country and applied for a new work permit, and the processing time is taking longer because of covid.
In the meantime, I received a small online job from a Canadian employer and I am wondering if I can transfer my paycheck to my Canadian bank account and if I have to pay taxes on the amount I will receive.
Thank you.
 

·
Registered
Joined
·
3,160 Posts
I believe that Canada taxes all Canadian-sourced income, so yes, you would be taxed on this. But any taxes you pay might be offset by foreign tax credits in your home country, depending on the tax treaty between the countries.
 

·
Registered
Joined
·
1,076 Posts
Just to add to above, Canadian taxes are all based on residency. You will have taxes payable only if you reside here basically.

You are a non resident last year as of year so you will have to pay tax in your new country. The CRA may deduct withholding taxes from your pay cheques but as mentioned these should be offset by tax credits so you are only taxed 1x
 

·
Registered
Joined
·
250 Posts
Best way to approach this is to be a freelancer, not an employee receiving a paycheque. (I'm not even sure that the employer could "hire" you if you don't have residency or permission to work.) Bill the company as a client for the full amount you've earned - no withholding, no need to charge GST if you are outside the country. Do what you need to do in your country of residence to report and pay tax on the income. No further action needed as far as Canada's concerned.
 

·
Registered
Joined
·
3 Posts
Discussion Starter #5
Best way to approach this is to be a freelancer, not an employee receiving a paycheque. (I'm not even sure that the employer could "hire" you if you don't have residency or permission to work.) Bill the company as a client for the full amount you've earned - no withholding, no need to charge GST if you are outside the country. Do what you need to do in your country of residence to report and pay tax on the income. No further action needed as far as Canada's concerned.
I am a freelancer, and I have to pay taxes in my home country for income I receive. So I don't have to pay taxes to Canada if I get payed?
 

·
Registered
Joined
·
250 Posts
I am a freelancer, and I have to pay taxes in my home country for income I receive. So I don't have to pay taxes to Canada if I get payed?
Yes, that is correct.

If a Canadian company hires a non-resident contractor to do work outside Canada, no Canadian taxes are owed by either party. No income tax, no GST.
 

·
Registered
Joined
·
3,160 Posts
Yes, that is correct.

If a Canadian company hires a non-resident contractor to do work outside Canada, no Canadian taxes are owed by either party. No income tax, no GST.
I agree with this. My initial post was assuming you were hired as an employee of the Canadian company.
 

·
Registered
Joined
·
3 Posts
Discussion Starter #8
What if I move to Canada and start working. When I declare my taxes for 2020 should I mention the income I received outside Canada?
 

·
Registered
Joined
·
10,621 Posts
If you move to Canada in say Nov 14th, 2020 then income received outside Canada up the date you moved to Canada would be ignored, except for a few exceptions like employment/business in Canada or selling taxable Canadian property for capital gains. Income after the move date would be included on the 2020 income tax return filed around April 2021 (unless covid gives another extension to the personal tax return filing deadline :)).



Cheers
 
1 - 9 of 9 Posts
Top