Tax on Income from Abroad

[archerx]

Hi

I am permanent resident in Canada and I had been working as a freelance consultant for a company abroad and they paid me in my home country's bank account.

My question is about if I have to pay tax or declare the revenue for the income received in my own country.


Thank you

 

[Amadan123]

Hello Archerx,

Hope you're well.

The main thing to determine here is whether or not you were a resident of Canada for tax purposes while you worked for that company. If so, then your worldwide income is taxable in Canada.

The residency in Canada for tax purposes is determined based on one's residential ties to Canada: primary or secondary ties. You can find more details here: http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

I hope that helps. If you have any more questions, please let us know.

Madan Chartered Accountant team
www.madanca.com

 

[torontosm]

Hi

I am permanent resident in Canada and I had been working as a freelance consultant for a company abroad and they paid me in my home country's bank account.

My question is about if I have to pay tax or declare the revenue for the income received in my own country.


Thank you

It sounds like you have been living in Canada while doing the freelance work. If so, the entire income must be reported on your tax filing. The amount of tax payable to the CRA will depend on whether you paid taxes in your home country, and whether Canada has a tax treaty with said country.

 

[Amadan123]

Good point, Torontosm.

If you paid taxes in the foreign country (assuming a tax treaty exists between that foreign country and Canada), you can claim those foreign taxes paid as foreign tax credits on your Canadian return to reduce or completely eliminate your Canadian taxes on that same income.

Sounds complicated, I know, but perhaps perusing some literature from the CRA may help.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns409-485/405-eng.html

Madan Chartered Accountant team
www.madanca.com