Working for a Canadian Company outside Canada - PR Status & Income tax
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Posted on: 13-11-05 15:49:10
I completed medicals and expecting to land there sometime in May 2006. At present, I am working in Middle East (M.E) and got opportunity to work for a Canadian company in M.E. begining from first quarter of 2006.
Below are my querries regarding working for Canadian company in M.E. for suggestions and clariifications from CD members.
1). I understand I and my family members, living with me in middle east will fullfil the 2 out of 5 yrs residency requirement as per CIC rules. Do we qualify to apply for citizenship also at the end of three years service in Canadian company in M.E.?
2). If I claim residency as above, I most probably have to file Income tax returns in Canada. Can I opt for not filing Income tax returns in Canada by not claiming residency for the period I work for Canadian compmany outside Canada? I mean whether I must file Income tax just because I will be working for Canadian company with PR status.
3). What is the best time to land there - before I sign the employment contract with Canadian company or after? or it does not matter anytime?
Thanks in advance.
- Erra
Quote:
Orginally posted by erra
I completed medicals and expecting to land there sometime in May 2006. At present, I am working in Middle East (M.E) and got opportunity to work for a Canadian company in M.E. begining from first quarter of 2006.
Below are my querries regarding working for Canadian company in M.E. for suggestions and clariifications from CD members.
1). I understand I and my family members, living with me in middle east will fullfil the 2 out of 5 yrs residency requirement as per CIC rules. Do we qualify to apply for citizenship also at the end of three years service in Canadian company in M.E.?
2). If I claim residency as above, I most probably have to file Income tax returns in Canada. Can I opt for not filing Income tax returns in Canada by not claiming residency for the period I work for Canadian compmany outside Canada? I mean whether I must file Income tax just because I will be working for Canadian company with PR status.
3). What is the best time to land there - before I sign the employment contract with Canadian company or after? or it does not matter anytime?
Thanks in advance.
- Erra
1. You cannot get citizenship even if you are working for a Canadian company outside canada. The only exception is if you are working for Canadian govt. services.or if your spouse is a Canadian citizen. You have to be physically spend 3 years out of the last 4 years on Canadian soil to qualify for citizenship
2. Being resident for income tax and being resident for immigration are two different things. Most countries consider you as resident for tax purposes if you are living in that country for a certain period of time in a year even if you are on work permit visa. As per canadian residency rules, you have to pay tax on your worldwide income to canada. If you want to get exemption from paying tax in canada, you have to fill a non-resident form to the income tax dept. Many Canadian citizens working in other countries claim themselves as non residents to avoid Canadian tax. However, as a Canadian PR doing this may not be a good idea.
3. You are better off landing after you join the Canadian company as you get additional time to serach for a job in Canada (as long as you work with the canadian company, you need not worry about losing your residency)
DISCLAIMER: I am not a immigration professional. All advice is based my personal experience and may vary based on your unique circumstances. please consult an immigration professional for accurate advise that suits your unique circumstance
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Hi,
Go through the following link
http://www.cic.gc.ca/english/newcomer/res-oblig.html
Good suggestions but I think that you lose practically nothing [except the citizenship that you miss] by working for the Canadian company in ME as long as it takes or as long as you enjoy it. Unless there is something I miss, you remain a PR as long as you work for the Canadian coy. By the way, why not explore the possibilities of intra coy transfer from ME to Canada, if it’s applicable?
phuan1, raajen
Thanks for the information.
maple_asian,
Thanks for answering all my querries. I have following querries connected to your response.
I have gone through the definitions of non-resident for Canadian tax puposes. I can maintain non-resident status for tax pupropse within the definitions (not having any ties with Canada after landing).
1). But It is not clear that working for Canadian company outside Canada puts me in resident category for tax purpose.
2). If it does not put me in resident category for tax purpose, Can I claim residence for immigration puprose without any manipulations for the period I work for Canadian company?
Thanks in advance.
- Erra
Quote:
Orginally posted by erra
phuan1, raajen
Thanks for the information.
maple_asian,
Thanks for answering all my querries. I have following querries connected to your response.
I have gone through the definitions of non-resident for Canadian tax puposes. I can maintain non-resident status for tax pupropse within the definitions (not having any ties with Canada after landing).
1). But It is not clear that working for Canadian company outside Canada puts me in resident category for tax purpose.
2). If it does not put me in resident category for tax purpose, Can I claim residence for immigration puprose without any manipulations for the period I work for Canadian company?
Thanks in advance.
- Erra
Working/Not working for a Canadian company outside canada doesn't have any effect on making you a resident category for tax purpose.
All Permenant residents of canada are supposed to pay tax on their world wide income. A similar rule exists for US Green Card holders. It means that any income you have both in and outside canada is taxable by canadian government. Many countries have tax treaties to avoid double taxation. But you still have to file tax returns in Canada along with details of the tax you paid in the country that has a tax treaty with Canada seeking exemption from paying tax in canada (assuming the country you live in has a tax treaty with canada)
If you ask me how many people who are residents in US and Canada follow the rule (i.e declare their worldwide income out US and Canada respectively) I would say may be very few. But the fact is that not declaring is punishable under law.
Whether you file tax or do not file tax, you can still claim to be resident as long you work for the Canadian company. However my understanding here is that you have to be recruited by the company in Canada and then be transferred to the overseas assignment to take advantage of the rule.
As I said in my earlier post, I am not an immigration professional and I don't want you make decisions based on my advise. I am sure as a person working in M.E. you are very serious in immigrating to Canada (unlike some of our desi folks sitting in the US and using Canada PR as a back up option incase they don't get their US green card) and I don't want you to have any trouble with your immigration issues based on my advise. It would be better to consult some good immigration lawyer like Mr.Masood who will be able to better advise you.
DISCLAIMER: I am not related to Mr.Masood or any one working in his firm
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