Important Facts Of Canadian Non-resident Taxation

By Author: Ken Donaldson
Total Articles: 48
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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. The Canadian non-resident taxation policies can be a bit confusing for people as there are a lot of different rules in the taxation laws and if you are not aware of the terms that are used typically in taxation, then you may find it even more difficult to understand. Some of the non-residents are exempted from tax as per the tax treaties that are signed between the respective countries and some of the income have to be taxed like it is done for Canadian residents.

What You Should Know about Canadian Non-Resident Taxation

There are a few important points that one has to know about Canadian non-resident taxation and they are discussed below.

• Identifying your residency status in Canada is the first step that one has to do. There are different types of residency status like residents, non-residents, deemed residents and deemed non-residents in Canada and the taxation for each of the residency status will vary.

• Identifying ...
... your tax obligations to Canada is the next thing that you will have to assess. Most of the types of income that is generated from Canada is taxed and therefore find out the tax bracket that your income will fall under.

• Identifying the Canadian non-resident taxation package that you will have to use is very important and it is decided by the type of income that you generate.

• Knowing the filing due date and filing your IT returns along with the necessary forms before the deadline.

• Pay any tax that is due to the Canadian Revenue Agency before the deadline so that you avoid penalties or other consequences.

Corporate Tax and Non-Residents

Non-resident corporations who have business interests in Canada and generate revenue from a business that is located in Canada will have to pay corporate tax to the Canadian Government. The clauses that govern the corporate tax in Canada are a bit complicated and the complications will only increase if you are a non-resident. If you are ‘carrying on business’ in Canada either directly or indirectly then the profit that is earned out of the business will be subject to taxation. Like in income tax, the residency status of the corporation will have to be determined and the corporate tax that is levied will be based on the residency status of the corporation.

Hiring Tax Experts for Taxation Issues

If you are a non-resident then it will be a wise decision to avail the services of tax experts to help you in filing your taxes. As the Canadian non-resident taxation policy is complicated paying personal income tax or corporate tax can be rather confusing for nonresidents. A good tax expert will be aware of the various exemptions that you can avail and will also know about what forms are necessary while filing your Tax Return. You may have to spend a small sum of money as hiring charges but then it will save a lot of your time and will ensure that you do not miss out anything while filing your return which can then result in penalties.

About Author:-

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