Tax Implications fore Newcomer with Foreign Income

[moe_218]

Good Day to All
I've got my head spinning trying to figure out this. I'm planning to land in Canada for the first time few weeks from now. I've agreed with my current employer to work remotely for about 3 months ( till I get my PR card at least) and then return back for 3 months to finalize everything and collect my end of service and my accumulated pension. My concern is that end of service accumulated over 10 years of work outside Canada, same as the pension. Would that be taxable ? How would I declare the source of money when I move it to Canada ?? Do I even have to declare the source of money if I do a bank transfer ?

Appreciating your support !

 

[canuck78]

Good Day to All
I've got my head spinning trying to figure out this. I'm planning to land in Canada for the first time few weeks from now. I've agreed with my current employer to work remotely for about 3 months ( till I get my PR card at least) and then return back for 3 months to finalize everything and collect my end of service and my accumulated pension. My concern is that end of service accumulated over 10 years of work outside Canada, same as the pension. Would that be taxable ? How would I declare the source of money when I move it to Canada ?? Do I even have to declare the source of money if I do a bank transfer ?

Appreciating your support !

Is the end of service a cash bonus? Is so yes it falls under taxable income. There may be a treaty based on your country of origin if you are already taxed once on that end of service amount. Yes you have to declare the amount. If through a bank transfer anything over 10k gets flagged by FINTRAC.

 

[fromhamilton]

You will have to declare your world income, the income you have earned from sources outside of Canada, only if you are resident of Canada for tax purposes. One interpretation says you are a tax resident of Canada only if you lived in Canada for more than 183 days in any tax year. From the dates you have provided in OP, looks like you will be living in Canada for less that 183 days; which means you may not have to declare your income from your previous employer. Best course of action would be to hire a tax consultant for the first year to file the tax. We don't want to mess up with the taxman, do we?

 

[frange]

You will have to declare your world income, the income you have earned from sources outside of Canada, only if you are resident of Canada for tax purposes. One interpretation says you are a tax resident of Canada only if you lived in Canada for more than 183 days in any tax year. From the dates you have provided in OP, looks like you will be living in Canada for less that 183 days; which means you may not have to declare your income from your previous employer. Best course of action would be to hire a tax consultant for the first year to file the tax. We don't want to mess up with the taxman, do we?

He became a canadian resident for TAX purpose at the day he signed the confirmation of PR at the point of entry in Canada, even he soft landed or NOT. The 183 days Rule is not applied. If he signed CoPR after Dec 31 last year which mean on Jan 1, he was not a canadian resident for tax purpose for the last year.

 

[moe_218]

Thanks for the clarification everyone. I think I would to consult an expert on that once I reach there. For now I've changed the plan and will be coming back to my country residence after landing, hopefully I'll be able to get my PR cards quickly

 

[frange]

Thanks for the clarification everyone. I think I would to consult an expert on that once I reach there. For now I've changed the plan and will be coming back to my country residence after landing, hopefully I'll be able to get my PR cards quickly

I want you to keep in mind that you became a canadian resident for tax purpose '' The day you sign your confirmation of permanent resident (CoPR) at a point of entry''. So, as long as you sign your CoPR , you are canadian tax resident.

 

[moe_218]

I want you to keep in mind that you became a canadian resident for tax purpose '' The day you sign your confirmation of permanent resident (CoPR) at a point of entry''. So, as long as you sign your CoPR , you are canadian tax resident.

I do understand that, but it makes no sense to tax someone who only spent few weeks inside the country. If I remain inside Canada and actually live there then yes for sure I will be paying taxes

 

[frange]

I do understand that, but it makes no sense to tax someone who only spent few weeks inside the country. If I remain inside Canada and actually live there then yes for sure I will be paying taxes

It depends of the date you sign your CoPR... Before dec 31, 2021 , YES.... On Jan 1, 2022, NO since you were not Canadian resident at the last taxation year.

 

[moe_218]

It depends of the date you sign your CoPR... Before dec 31, 2021 , YES.... On Jan 1, 2022, NO since you were not Canadian resident at the last taxation year.

Thanks again for the clarification. I will seek professional opinions on this topic to make sure I'm not doing anything illegal

 

[frange]

Thanks again for the clarification. I will seek professional opinions on this topic to make sure I'm not doing anything illegal

Understand; but if no Exceptions involve, no need to spend money on taxation advice if you were not living in Canada before you sign your CoPR at a point of entry. Generally speaking; the taxation year is Jan 1- Dec 31.

In your scenario, there are 2 main factors:
- The date you sign your CoPR and if you lived or not in Canada prior becoming officially PR.
1- If you were not living in canada in 2021 OR did not sign your CoPR at anytime in 2021 ( Jan 1- Dec 31)--- Not required to fill tax in Canada for 2021.
2- If you signed your CoPR in 2022 and did not live in Canada in 2021---- Still not required to fill tax.
3- If one of the points above is YES, then you should fill tax for 2021.

For special request or advice, check your taxation advisor.

 

[fromhamilton]

Thanks for the clarification everyone. I think I would to consult an expert on that once I reach there. For now I've changed the plan and will be coming back to my country residence after landing, hopefully I'll be able to get my PR cards quickly

I think the some wrong information is being spread here. Some pointers:

• There is nothing called Soft landing from official stand point, either you land or you don't
• signing CoPR and becoming a PR are immigration events , these are not tax events, tax man could not careless
• Permanent residence and Tax residence are different, there are PRs who are not Tax residents and there are Non PRs who are tax residents
• You become a PR when you make your first landing, many of those who land by surface transport often take a U turn and go back to US, I mean literally
• You become a tax resident once you live in Canada for more 183 days in calendar year for that year, or have substantial residential ties with Canada such as Having back accounts, own or rent properties, etc...
• There is no question in Tax application form as to when you became a PR

 

[frange]

I think the some wrong information is being spread here. Some pointers:

• There is nothing called Soft landing from official stand point, either you land or you don't
• signing CoPR and becoming a PR are immigration events , these are not tax events, tax man could not careless
• Permanent residence and Tax residence are different, there are PRs who are not Tax residents and there are Non PRs who are tax residents
• You become a PR when you make your first landing, many of those who land by surface transport often take a U turn and go back to US, I mean literally
• You become a tax resident once you live in Canada for more 183 days in calendar year for that year, or have substantial residential ties with Canada such as Having back accounts, own or rent properties, etc...
• There is no question in Tax application form as to when you became a PR

1-Soft landing is a forum expression not an official's one. This means you sign your CoPR and go back to your country.
2-When you sign your CoPR, you become PR. So, you have obligation to pay tax in Canada on worldwide income. Sure, it's not a tax event but a new immigrant has to think about it.
3- Become PR make you automatically a canadian resident for tax purpose. The technicality of 183 days in calendar do not stand.
5- Agreed, no particular tax form when you become PR.