Take Home Pay for 85k /year
Jump to Page:
< Previous [ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ] [ 6 ] [ 7 ] Next >
Posts: 2873
Location: Western Hemisphere
Posted on: 07-01-11 17:50:33
Location: Western Hemisphere
Posted on: 07-01-11 17:50:33
Quote:
Originally posted by web2000
Option A is ambiguous and can't understand it. If a person wants to satisfy option A, I don't know how he/she will do it.
I would say - by not having any tax residential ties to Canada. I believe, any way you look at it, the moment you maintain tax residential ties to Canada, it doesn't matter where you normally live - you become a tax resident of Canada.
-----------------------------------------------------------------
Dimple2001
Quote:
Originally posted by dimple2001
Quote:
Originally posted by web2000
Option A is ambiguous and can't understand it. If a person wants to satisfy option A, I don't know how he/she will do it.
I would say - by not having any tax residential ties to Canada. I believe, any way you look at it, the moment you maintain tax residential ties to Canada, it doesn't matter where you normally live - you become a tax resident of Canada.
Rules are there but practically meaningless. Even if all ties are broken then closing RRSP accounts and taking out savings meant for retirement is not practically feasible. Canadian citizens working abroad will find it more difficult. Theoretically, everything is feasible but not practically easy.
Quote:You are right...but the reason rules are structured this way is to prevent Canadian citizens from evading taxes by simply setting up a residential address in a tax haven country like the Caymans.
Originally posted by web2000
Rules are there but practically meaningless. Even if all ties are broken then closing RRSP accounts and taking out savings meant for retirement is not practically feasible. Canadian citizens working abroad will find it more difficult. Theoretically, everything is feasible but not practically easy.
There are only 2 ways to legally avoid paying taxes in Canada:
1. Completely sever all ties to Canada - no bank accounts, RRSP, RESP, home, driving license, etc.
2. Move to a country that has a tax treaty with Canada such that taxes can be coordinated and if the tax rate is higher in that country, you won't pay Canadian taxes on your worldwide income.
-----------------------------------------------------------------
"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by pratickm
Quote:You are right...but the reason rules are structured this way is to prevent Canadian citizens from evading taxes by simply setting up a residential address in a tax haven country like the Caymans.
Originally posted by web2000
Rules are there but practically meaningless. Even if all ties are broken then closing RRSP accounts and taking out savings meant for retirement is not practically feasible. Canadian citizens working abroad will find it more difficult. Theoretically, everything is feasible but not practically easy.
You are also right but to be honest here is my concern
"If a person stays out of country, earns in other country, pays taxes there and uses other country's services and infra structure etc. etc. then just keeping a bank account in Canada does not justify to pay taxes." On top of that if one keeps residential address then he/she already pays property tax then why income tax?
This is just my logical opinion and is nothing in favor/against any rule.
Posts: 2873
Location: Western Hemisphere
Posted on: 10-01-11 18:33:00
Location: Western Hemisphere
Posted on: 10-01-11 18:33:00
Quote:
Originally posted by web2000
You are also right but to be honest here is my concern
"If a person stays out of country, earns in other country, pays taxes there and uses other country's services and infra structure etc. etc. then just keeping a bank account in Canada does not justify to pay taxes." On top of that if one keeps residential address then he/she already pays property tax then why income tax?
This is just my logical opinion and is nothing in favor/against any rule.
In that case, if the bank account generates interest income, then the holder is obligated to declare that income as a Canada source income as a non-resident and also declare that income in his/her home country as part of worldwide income. Following that, based on any treaty, they can offset that declaration through foreign tax credits and/or treaty terms.
Residential address will be challenged by CRA as it constitutes your residence. Isn't that what residential address mean? On the other hand, one can own a rental property and that will fall under what I said in previous paragraph, namely, obligation to declare Canada source income, declare as world income in home country and offset liability through treaty terms.
Also, declaring does not automatically mean paying money. It all depends on the treaty terms. For example, Capital Gains from US non-retirement investments for a Cdn resident (US non-resident) is taxed at 0% by the US, but the investment company will declare it to IRS. Dividends are taxed at a flat "favorable" rate of 15% for Canadian residents and they are withheld at source before distribution. On the other hand, these incomes must be declared in Canada as part of world income and is taxed as regular income at your tax bracket.
In simple terms, one can't have stuff in one country for the sake of convenience and expect relief from tax obligations.
-----------------------------------------------------------------
Dimple2001
Quote:
Originally posted by dimple2001
Quote:
Originally posted by web2000
You are also right but to be honest here is my concern
"If a person stays out of country, earns in other country, pays taxes there and uses other country's services and infra structure etc. etc. then just keeping a bank account in Canada does not justify to pay taxes." On top of that if one keeps residential address then he/she already pays property tax then why income tax?
This is just my logical opinion and is nothing in favor/against any rule.
In that case, if the bank account generates interest income, then the holder is obligated to declare that income as a Canada source income as a non-resident and also declare that income in his/her home country as part of worldwide income. Following that, based on any treaty, they can offset that declaration through foreign tax credits and/or treaty terms.
Residential address will be challenged by CRA as it constitutes your residence. Isn't that what residential address mean? On the other hand, one can own a rental property and that will fall under what I said in previous paragraph, namely, obligation to declare Canada source income, declare as world income in home country and offset liability through treaty terms.
Also, declaring does not automatically mean paying money. It all depends on the treaty terms. For example, Capital Gains from US non-retirement investments for a Cdn resident (US non-resident) is taxed at 0% by the US, but the investment company will declare it to IRS. Dividends are taxed at a flat "favorable" rate of 15% for Canadian residents and they are withheld at source before distribution. On the other hand, these incomes must be declared in Canada as part of world income and is taxed as regular income at your tax bracket.
In simple terms, one can't have stuff in one country for the sake of convenience and expect relief from tax obligations.
Here is a case due to which I asked the question
A person is holding agricultural property in India which generates approx $50000 (Approx Rs 22,00,000) from agri. production. This income is not taxable in India. Since a person has Canada PR but living in India find himself in a trouble to pay heavy tax in Canada just because he has a RRSP account in Canadian bank. He is still in the process of figuring out if he has to pay tax in Canada or not. He cannot close his RRSP account in Canada as it will be a loss to take all his money from RRSP. There is no Canada source income in this case.
I hope this will make sense.
Posts: 2873
Location: Western Hemisphere
Posted on: 11-01-11 11:18:29
Location: Western Hemisphere
Posted on: 11-01-11 11:18:29
Quote:
Originally posted by web2000
Here is a case due to which I asked the question
A person is holding agricultural property in India which generates approx $50000 (Approx Rs 22,00,000) from agri. production. This income is not taxable in India. Since a person has Canada PR but living in India find himself in a trouble to pay heavy tax in Canada just because he has a RRSP account in Canadian bank. He is still in the process of figuring out if he has to pay tax in Canada or not. He cannot close his RRSP account in Canada as it will be a loss to take all his money from RRSP. There is no Canada source income in this case.
I hope this will make sense.
Does he have a RSP account or is he retired and withdrawing off his RSP money? If it is the former, there is no tax to pay on the RSP account as RSPs are tax deferred. If it is the latter, yes, he owes tax on this withdrawal and it is a Canada source income as a non-resident of Canada.
Having a dormant RSP account does not make him a tax resident of Canada. However, he is obligated to declare this Canada source income if and when there are withdrawals off the RSP account.
On the other hand, if he is continuing to contribute to RSP, then CRA will treat him as a tax resident since only residents can contribute to RSP. In that case, he will be subject to tax on worldwide income in Canada.
-----------------------------------------------------------------
Dimple2001
