Any audit issue, e.g. legal, taxation, if a PR work for foreign employer but staying in Canada

[dreamon2019]

Good day everyone, got a question here.
As a PR, staying in Canada, I am moving to a new position in a non-Canadian company, I got concern from the corporate HR and Legal division.
They asked if there is any problem (from e.g Canada government, CRA) if I as a PR staying in Canada but working for a non-Canadian company.

While they are consulting with divisions in HQ, I replied "no, there is no problem", as long as I have been filing tax every year and pay required amount by CRA reviewing, there shall be no legal, taxation issue from anywhere to the company.

Please share your experience or professional comments.

Thank you and have a safe day.

 

[canuck78]

Good day everyone, got a question here.
As a PR, staying in Canada, I am moving to a new position in a non-Canadian company, I got concern from the corporate HR and Legal division.
They asked if there is any problem (from e.g Canada government, CRA) if I as a PR staying in Canada but working for a non-Canadian company.

While they are consulting with divisions in HQ, I replied "no, there is no problem", as long as I have been filing tax every year and pay required amount by CRA reviewing, there shall be no legal, taxation issue from anywhere to the company.

Please share your experience or professional comments.

Thank you and have a safe day.

All depends on how you are getting paid and filing your taxes.

 

[dreamon2019]

All depends on how you are getting paid and filing your taxes.

Hi canuck78,

Let's say the employer is from country A.
I get paid from the employer directly on the currency of country A, the salary credits to my bank account in Country A, paid taxes to country A as well.
In the past years, every year I filed my tax and get reviewed by CRA, submitted payslips and tax paid record from country A, then paid the "additional" tax CRA considered not in the tax treaty and above the certain "level".

Please let me know your ideas.
Thanks for reply.

 

[armoured]

Hi canuck78,

Let's say the employer is from country A.
I get paid from the employer directly on the currency of country A, the salary credits to my bank account in Country A, paid taxes to country A as well.
In the past years, every year I filed my tax and get reviewed by CRA, submitted payslips and tax paid record from country A, then paid the "additional" tax CRA considered not in the tax treaty and above the certain "level".

Please let me know your ideas.
Thanks for reply.

This sounds basically correct to me although there are some specific issues that can come up, like employer pension contributions. It's not at all uncommon so it's not like this is new. The basic principle is you pay tax on your worldwide income, so as long as you are reporting properly.

But I think the question needs to be posed to the company HR of what exactly they are looking for. You can provide anything from very basic links to articles from tax accountancy companies (google will turn some up). There are probably CRA pages as well.

If they want something more specific (eg they are concerned about liability) you could get some kind of letter from a tax accountancy. That should be fairly easy esp if you have your taxes prepared for you.

 

[canuck78]

Hi canuck78,

Let's say the employer is from country A.
I get paid from the employer directly on the currency of country A, the salary credits to my bank account in Country A, paid taxes to country A as well.
In the past years, every year I filed my tax and get reviewed by CRA, submitted payslips and tax paid record from country A, then paid the "additional" tax CRA considered not in the tax treaty and above the certain "level".

Please let me know your ideas.
Thanks for reply.

Are you able to legally work in country A? Does the company have a Canadian division?

 

[Buletruck]

Hi canuck78,

Let's say the employer is from country A.
I get paid from the employer directly on the currency of country A, the salary credits to my bank account in Country A, paid taxes to country A as well.
In the past years, every year I filed my tax and get reviewed by CRA, submitted payslips and tax paid record from country A, then paid the "additional" tax CRA considered not in the tax treaty and above the certain "level".

Please let me know your ideas.
Thanks for reply.

Should be no problem. As long as you file your taxes with CRA and list your foreign income, that should be all that’s required (apart from paying CRA any share they might feel you owe them).

 

[dreamon2019]

This sounds basically correct to me although there are some specific issues that can come up, like employer pension contributions. It's not at all uncommon so it's not like this is new. The basic principle is you pay tax on your worldwide income, so as long as you are reporting properly.

But I think the question needs to be posed to the company HR of what exactly they are looking for. You can provide anything from very basic links to articles from tax accountancy companies (google will turn some up). There are probably CRA pages as well.

If they want something more specific (eg they are concerned about liability) you could get some kind of letter from a tax accountancy. That should be fairly easy esp if you have your taxes prepared for you.

Thanks for reply. It seems there will be no problem from tax point of view.
Do you have an idea from law or legal part? Maybe there is a rule could strict or regulate Canadian PR work for other countries' company inside of Canada?

Have a good day.

 

[dreamon2019]

Should be no problem. As long as you file your taxes with CRA and list your foreign income, that should be all that’s required (apart from paying CRA any share they might feel you owe them).

Of course, I file the "oversea" income and the rest of info, and, as long as CRA has reviewed and asked me in the past years, it seems to me they've known my situation and there is no other problem from tax point of view.
Thanks for the reply.

 

[armoured]

Thanks for reply. It seems there will be no problem from tax point of view.
Do you have an idea from law or legal part? Maybe there is a rule could strict or regulate Canadian PR work for other countries' company inside of Canada?

Have a good day.

Sorry, don't feel I can say about that. I'd suggest a tax accountancy to start.

 

[dreamon2019]

Are you able to legally work in country A? Does the company have a Canadian division?

Yes, I am country A citizen, the company has the subsidiary company in Canada, but don't have a Canadian division in Head Quarter （in country A).

 

[dreamon2019]

Sorry, don't feel I can say about that. I'd suggest a tax accountancy to start.

Thanks you

 

[vensak]

Hi canuck78,

Let's say the employer is from country A.
I get paid from the employer directly on the currency of country A, the salary credits to my bank account in Country A, paid taxes to country A as well.
In the past years, every year I filed my tax and get reviewed by CRA, submitted payslips and tax paid record from country A, then paid the "additional" tax CRA considered not in the tax treaty and above the certain "level".

Please let me know your ideas.
Thanks for reply.

ok so immigration part does not care if you work for a foreign employer when you stay in Canada. If you are allowed to do so is the problem of the law of that country where you will get contract (if you are allowed to work there). So as for PR obligation that is not an issue.
From CRA point of view, there is list of primary and secondary attachments in Canada that will make you tax resident. I would say in your case for purpose of living in Canada you have to rent a house / apartment or own one; most likely have Canadian bank account and driving license, which by will make you tax resident regardless if you have Canadian job or not. So in that case you have to bring proof of world wide income back to Canada each year in your tax report. If you will pay taxes also in Canada will then depend on the bilateral agreement between that other country and Canada. Some countries do have it some do not.
And of course you also need to take care of filing taxes in that Country A

 

[dreamon2019]

ok so immigration part does not care if you work for a foreign employer when you stay in Canada. If you are allowed to do so is the problem of the law of that country where you will get contract (if you are allowed to work there). So as for PR obligation that is not an issue.
From CRA point of view, there is list of primary and secondary attachments in Canada that will make you tax resident. I would say in your case for purpose of living in Canada you have to rent a house / apartment or own one; most likely have Canadian bank account and driving license, which by will make you tax resident regardless if you have Canadian job or not. So in that case you have to bring proof of world wide income back to Canada each year in your tax report. If you will pay taxes also in Canada will then depend on the bilateral agreement between that other country and Canada. Some countries do have it some do not.
And of course you also need to take care of filing taxes in that Country A

Thanks for detail clarification, especially about "for PR obligation that is not an issue".
About taxiation part, I've been filing my taxes to CRA as well as Country A for years.
This concern was raised because I am moving to a different (better) position in same company, so the HR is more carefully looking at everything than before.

It's not a problem now.
Have a good day