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All You Need to Know About Canadian Non-Resident Taxation Policies

by

Ken Donaldson

As in many other countries, non-residents in Canada are also subjected to taxation and they will have to pay taxes for the income that they generate from sources that are within Canada. Canadian non-resident taxation rules apply to you if you are living and working in Canada and you are not a Canadian resident. It is ideal that if you are living or working in Canada as a nonresident, you should be aware of such taxation rules. Through the internet and online discussion forums, you will be able to gather a lot of information about the taxation laws in Canada on nonresidents. You can as well contact some of the experienced and reputed tax accountants in the area you live in Canada in order to get full information on the nonresident taxation laws. He or she will help you in computing the tax figures that you need to pay a tax to the Government of Canada.

There are a lot of factors that are considered while determining the residency status of an individual in Canada. The most important factor is said to be the residential ties that the non-resident has in Canada or is in the process of establishing. Canada also asks for tax to non-residents on certain source of income such as withholding tax on interest, dividends, royalties, etc. People who visit and stay in Canada longer than 6 months in the same year are considered to be a resident in Canada and subject for a tax fee base on their worldwide income.

The Canadian non-resident taxation policy considered 15% tax deduction at the source to be a rough estimate of the nonresident tax liability of the person. If you are covered by treaty protection or can show that your expenses are bound to be more you can apply for a waiver or tax reduction request to the concerned department. A waiver application will have to be filled and submitted to the tax services office that is responsible for tax related functions in the area that you provide services in. The application will have to be filed 30 days before receiving the first payment and no later than 30 days from the start of providing the services. If the required details are in order then the tax office will give you a waiver or deduction certificate that can be given to the employer.

It is very important to not take things for granted while filing the nonresident tax in Canada and if there is any ambiguity in the various clauses of the tax treaty that has been signed with your resident country, contact the International Tax Services Office for clarification. It will also be a good option to avail the services of tax experts to help you with your nonresident taxation procedures as they will have the knowledge of the exemptions that can be availed by you. It will also make the process a lot simpler with you not having to run around to get your income tax return filed properly.

Ken Donaldson is a chartered accountant who practices as an independent tax consultant. He also author of Canadian taxation of non-residents, in this article he provides

nonresident taxation

tips. For more information you can visit Taxca.com.

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