I've never done any overseas work, but am looking at possibilities, which brings me to the Tax situation here in Canada. How does one go about avoiding paying any income tax? Does it depend on where you work? On whether you're working for a Canadian company? Is it possible to become a "non-resident" but keep your AME licence?? What do all you overseas contractors do in regards to income taxes?
I'll be meeting with a tax lawyer so I'll get more specifics there-but it would be good to know a bit about the topic. Any info appreciated
MS
Working overseas and the Canada Revenue Agency....
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Re: Working overseas and the Canada Revenue Agency....
You can go non-resident to not pay taxes, but you lose all Canadian social benefits, like health care etc. If you went non-resident you can still keep your AME license. There is also a little thing called the Overseas Tax Credit. Google it.
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Re: Working overseas and the Canada Revenue Agency....
Summary
This bulletin deals with the overseas employment tax credit (OETC). An individual who is resident in Canada may be entitled to claim this credit for qualifying income from overseas employment. The OETC effectively eliminates 80% of the Canadian income tax on the first $100,000 of salary, wages and other remuneration earned from such employment. To qualify for the OETC, an individual must:
(a) be employed by a specified employer (generally, a resident of Canada), other than for the performance of services under a prescribed international development assistance program of the Government of Canada;
(b) be employed in connection with a contract under which the specified employer carried on business outside Canada on a resource, construction, installation, agricultural, engineering or prescribed activity (or for the purpose of obtaining such a contract); and
(c) have performed all or substantially all the employment duties (done in connection with a contract described in (b) above) outside Canada.
The conditions described in (a) to (c) above must exist for a period of more than six consecutive months
* within the year,
* beginning in the year and ending in a subsequent year, or
* ending in the year and that began in a previous year.
This period is referred to as the qualifying period.
This bulletin deals with the overseas employment tax credit (OETC). An individual who is resident in Canada may be entitled to claim this credit for qualifying income from overseas employment. The OETC effectively eliminates 80% of the Canadian income tax on the first $100,000 of salary, wages and other remuneration earned from such employment. To qualify for the OETC, an individual must:
(a) be employed by a specified employer (generally, a resident of Canada), other than for the performance of services under a prescribed international development assistance program of the Government of Canada;
(b) be employed in connection with a contract under which the specified employer carried on business outside Canada on a resource, construction, installation, agricultural, engineering or prescribed activity (or for the purpose of obtaining such a contract); and
(c) have performed all or substantially all the employment duties (done in connection with a contract described in (b) above) outside Canada.
The conditions described in (a) to (c) above must exist for a period of more than six consecutive months
* within the year,
* beginning in the year and ending in a subsequent year, or
* ending in the year and that began in a previous year.
This period is referred to as the qualifying period.
Re: Working overseas and the Canada Revenue Agency....
Hide the paper trail, say you're doing humanitarian volunteer work, and slowly funnel the money back into canada. There is usually no flags raised if you carry less than 10g's in at a time, Keep all your canadian receipts to prove you pay taxes and aren't living outside your means. If you tell the gov you're making money overseas and want to put it back into canada, they will take their cut. If big corporations get to skirt tax laws and mock the rules then so should we!! Or you could be the good guy and hold yourself to a higher standard than those greedy little pigs.
Re: Working overseas and the Canada Revenue Agency....
OK, if you consider OETC then thats 13% income tax you pay. If you are working overseas I would say the pay could be $100,000.00. So that would be 13000.00 you pay per year in income tax.
Try this, Incorporate a company and forget the OETC. Pay yourself a good per diem, pay yourself 50,000.00 per at regular tax rate 26% I think is the rate(whats 26% of 50,000.00...................you got it 13,000.00). This way you write off a crap load of stuff still pay the same taxes. In my opinion that is a lot better than any OETC can offer.
Try this, Incorporate a company and forget the OETC. Pay yourself a good per diem, pay yourself 50,000.00 per at regular tax rate 26% I think is the rate(whats 26% of 50,000.00...................you got it 13,000.00). This way you write off a crap load of stuff still pay the same taxes. In my opinion that is a lot better than any OETC can offer.
