Working remotely (abroad) for a company based in Canada

[litagalarza]

Hi

I already have the canadian citizenship.
I would like to work remotely from Peru for a Canadian company. I have received some job offers for 100% remote work only Canada. But as soon as I say that I want to work remotely from southamerica, either they do not know how taxes will change or are simply no longer interested in me.

is it posible to work remotely for a company based in Canada? If human resources does not know, who can I talk to?
Would it be wise to tell them that they can pay me through Upwork?

Thanks

 

[scylla]

Hi

I already have the canadian citizenship.
I would like to work remotely from Peru for a Canadian company. I have received some job offers for 100% remote work only Canada. But as soon as I say that I want to work remotely from southamerica, either they do not know how taxes will change or are simply no longer interested in me.

is it posible to work remotely for a company based in Canada? If human resources does not know, who can I talk to?
Would it be wise to tell them that they can pay me through Upwork?

Thanks

That answer will vary from company to company. There's no generic answer to this question. Some will be OK with this. Many probably won't be. Some companies are only open to remote work with their footprint for tax, employment, and legal reasons. Some are only open to remote work in specific jurisdiction due to regulatory restrictions, privacy laws, data security, cyber concerns and any other number of reasons.

So it is possible in some scenarios. However it's entirely up to a company whether they allow it or not based on the nature of their business and their policies around how they run their business and how they employ people.

You can certainly let employers know they can pay you through Upwork. This may or may not address the core issues. Some companies simply won't be OK with this set up no matter how you are compensated.

 

[canuck78]

Hi

I already have the canadian citizenship.
I would like to work remotely from Peru for a Canadian company. I have received some job offers for 100% remote work only Canada. But as soon as I say that I want to work remotely from southamerica, either they do not know how taxes will change or are simply no longer interested in me.

is it posible to work remotely for a company based in Canada? If human resources does not know, who can I talk to?
Would it be wise to tell them that they can pay me through Upwork?

Thanks

Agree with @scylla but want to stress it is a very bad idea not to be upfront with your employer that you don’t plan on remaining in Canada.

 

[litagalarza]

Thank you very much for the reply @scylla @canuck78

In the past I went to some recruitment events and some companies said that they allow their employees to work remotely worldwide, but they have to be at least 183 days within Canada. I do not know what is the reason. Anyways...

So, as there are some companies interested in 100% remote work only Canada; I thought the following:

• work and live in Canada from july1 until december31: So I can get the RL31 (Quebec), which I guess is to proof residency.
• from january1 to june30: live abroad.

Will my taxes become complex (tax in 2 countries)? Will I have to pay more taxes?
I do not own a house in Canada, so when leaving the country I will be out with everything.

Thank you

 

[scylla]

Thank you very much for the reply @scylla @canuck78

In the past I went to some recruitment events and some companies said that they allow their employees to work remotely worldwide, but they have to be at least 183 days within Canada. I do not know what is the reason. Anyways...

So, as there are some companies interested in 100% remote work only Canada; I thought the following:

• work and live in Canada from july1 until december31: So I can get the RL31 (Quebec), which I guess is to proof residency.
• from january1 to june30: live abroad.

Will my taxes become complex (tax in 2 countries)? Will I have to pay more taxes?
I do not own a house in Canada, so when leaving the country I will be out with everything.

Thank you

If you want to work any part of the year remotely outside of Canada, make sure you have that conversation with the employer during the hiring process. As I said earlier, sometimes this is this possible and sometimes it isn't. There are many many factors that influence this and you'll need to find an employer who is able to give you this flexibility and also for the country where you want to be living in part of the year.

I would consult with a tax specialist for the rest of your questions. It will depend on several factors, including what country you plan to live in overseas.

 

[Martel80]

Thank you very much for the reply @scylla @canuck78

In the past I went to some recruitment events and some companies said that they allow their employees to work remotely worldwide, but they have to be at least 183 days within Canada. I do not know what is the reason. Anyways...

So, as there are some companies interested in 100% remote work only Canada; I thought the following:

• work and live in Canada from july1 until december31: So I can get the RL31 (Quebec), which I guess is to proof residency.
• from january1 to june30: live abroad.

Will my taxes become complex (tax in 2 countries)? Will I have to pay more taxes?
I do not own a house in Canada, so when leaving the country I will be out with everything.

Thank you

Hi Lita,

The Peruvian Law ( just like the Colombian law) have no regulation regarding Digital Nomadism and nowhere does it state that you cant work remotely from Peru for a foreign company.

Now, you cannot legally stay in Peru for more then 183 days and cannot work for a Canadian company or be paid in a Canadian bank account if you work abroad for more then 183 days either.

Bottom line, if the company you are working for is not retrograde and doesn't have a policy that wont let you work abroad, they have no reason to refuse....but they can refuse if they want.

Its their own internal policies and its not law driven nor tax driven UNLESS....

- the company cannot have a branch in the welcoming country or you would need to fill for a work visa which again is just logical.
- If I'm not mistaken, the only 2 type of job where its illegal to work abroad are Banks and Governmental jobs. Maybe insurance companies as well but I'm not sure. I'd need to check.

Its their (company) choices just like its your choice to find a more modern and forward thinking type of company to work for.

If you don't tell them and they find out, they can fire you if you never received an authorization to travel abroad. Always ask by email and CC the answer to your own email address. If they grant you the authorization then fire you, they are legally the wrong doer and you will most likely have a very substantial compensation for that illegal dismissal or you can bring your case to court where you will have the proof that you were authorized and they will have to pay your salary plus damages for a year minus your income for that year. But you don't want to get there, that's a year long process and Labor Lawyers are very expensive ( even though you should not need one to fill an official complain). BUT YOU NEED LEGAL PROOF (Email).

But in short, no, there is no other regulation that will make your work abroad illegal.

The only thing you need to work in Peru for a Canadian Company while being paid in Canada is a Tourist Visa.

Don't overstay your 183 days and you'll be fine.

Peru is happy because you spend your Foreigner money in their country and Canada is happy because you pay your taxes.

Just don't overstay. Plan a maximum 182 days Out and back in Canada.

If you need the specifics about the law, you can go through the Canadian - Peruvian FTA

Hope that help.

 

[CitizenSoon]

This is such a very interesting question. A few weeks ago, I have heard of some domestically born Canadians citizens, who work hard to save money and live in Canada for 6 months and move to live a relaxed life in Latin America for six months! They do that every year. I was wondering why.

What if they hire someone who is not Canadian? What if they hire you using your non-Canadian citizenship? What if they hire a company which is not Canadian? What if they hire your non-Canadian company, if you own or work for a non-Canadian company?

 

[litagalarza]

What is the equivalent of american W8 in Canada?

W8 form is used by non-resident aliens who do work and/or make income in the U.S. or by foreign business entities who make income in the U.S.

 

[canuck78]

This is such a very interesting question. A few weeks ago, I have heard of some domestically born Canadians citizens, who work hard to save money and live in Canada for 6 months and move to live a relaxed life in Latin America for six months! They do that every year. I was wondering why.

What if they hire someone who is not Canadian? What if they hire you using your non-Canadian citizenship? What if they hire a company which is not Canadian? What if they hire your non-Canadian company, if you own or work for a non-Canadian company?

You can’t decide what citizenship you use to get hired by the Canadian company. You will always be a Canadian citizen if you are a dual citizen. Companies wanting you to spend over 183 days in Canada want you to remain a Canadian tax resident so they don’t need to change any of their tax and payment systems.

 

[canuck78]

What is the equivalent of american W8 in Canada?

W8 form is used by non-resident aliens who do work and/or make income in the U.S. or by foreign business entities who make income in the U.S.

if you are a non-resident for tax purposes in Canada you won’t file any taxes. You need to confirm with CRA that you will be a non-resident for tax purposes and have no ties to Canada but if you are deemed a non-resident you don’t pay taxes. Do you have any savings or investment accounts in Canada? That could be an issue. You will also have to reapply for things like healthcare upon your return and inform provincial agencies that you are leaving the country.

 

[mia_79]

Hi all,

I would like to piggy back on this question as I have been legally employed for Canadian company while living in Poland for the past year.
My employment is secure as I do consulting and given the nature of the current world, most of my work is remote.
No issues with my employer as he is almost like family and we generate a well balanced income.
I have a couple bank accounts, 6 credit cards and an bank loan i'm paying off while living abroad.
My residential address is registered at my cousins in Canada, I have not been back to Canada in almost a year and have not current plans of returning given the political scene, etc.
Thus I'm assuming my tax residency is clearly Canada yes?
Further, I have investigated the local Tax office and legally, I can do my taxes in either Country, although it is up to me.
All I would need to do is show them Taxes paid in Canada and they would calculate the difference here. But gathering income in CDN vs. PLN puts me in a different tax bracket and in essence they could force me to contribute to their budget or rather (rip me off...).
I have 3 kids and as I understand they can collect a baby bonus anywhere in the world as long as I do my taxes in Canada as they calculate from July to June based on your income tax.

I guess what I'm asking for here is confirmation on my logic and findings and guidance if anyone is in a similar situation abroad.

Thank you for you responses.

Cheers

 

[canuck78]

Hi all,

I would like to piggy back on this question as I have been legally employed for Canadian company while living in Poland for the past year.
My employment is secure as I do consulting and given the nature of the current world, most of my work is remote.
No issues with my employer as he is almost like family and we generate a well balanced income.
I have a couple bank accounts, 6 credit cards and an bank loan i'm paying off while living abroad.
My residential address is registered at my cousins in Canada, I have not been back to Canada in almost a year and have not current plans of returning given the political scene, etc.
Thus I'm assuming my tax residency is clearly Canada yes?
Further, I have investigated the local Tax office and legally, I can do my taxes in either Country, although it is up to me.
All I would need to do is show them Taxes paid in Canada and they would calculate the difference here. But gathering income in CDN vs. PLN puts me in a different tax bracket and in essence they could force me to contribute to their budget or rather (rip me off...).
I have 3 kids and as I understand they can collect a baby bonus anywhere in the world as long as I do my taxes in Canada as they calculate from July to June based on your income tax.

I guess what I'm asking for here is confirmation on my logic and findings and guidance if anyone is in a similar situation abroad.

Thank you for you responses.

Cheers

You have made some large assumptions that are potentially incorrect. You can’t use your cousin’s address as your residential address for government documents if you aren’t living there. CRA determines whether you are a tax resident or not and whether your children can receive child benefit while outside Canada even if you’re a tax resident. The whole point of CCB is to help with the cost of raising children in Canada so if you are not living in Canada then there are no guarantees that they are entitled to receive CCB. You must notify CRA that you are not living in Canada. Your employer can not pretend you are living in Canada and must pay you as someone living in Poland. This is actually fraud. You must notify CRA when you moved out of Canada and ask them to determine if you are still a tax resident and whether your children are entitled to CCB. By not doing so, you could end up having to pay back huge sums of money. You also must notify your provincial health authority when you left Canada.

You may not want to pay taxes in Poland but if you’re living there it’s not up to you.

 

[gmajdoub]

You have made some large assumptions that are potentially incorrect. You can’t use your cousin’s address as your residential address for government documents if you aren’t living there. CRA determines whether you are a tax resident or not and whether your children can receive child benefit while outside Canada even if you’re a tax resident. The whole point of CCB is to help with the cost of raising children in Canada so if you are not living in Canada then there are no guarantees that they are entitled to receive CCB. You must notify CRA that you are not living in Canada. Your employer can not pretend you are living in Canada and must pay you as someone living in Poland. This is actually fraud. You must notify CRA when you moved out of Canada and ask them to determine if you are still a tax resident and whether your children are entitled to CCB. By not doing so, you could end up having to pay back huge sums of money. You also must notify your provincial health authority when you left Canada.

You may not want to pay taxes in Poland but if you’re living there it’s not up to you.

I am not sure official documentation is in agreement with what you say here:

A factual resident for tax purposes is entitled for ccb.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/factual-residents-temporarily-outside-canada.html

Working remotely is not fraud. This is becoming common and it’s the employer’s duty not the employee’s to make sure it meets its obligations; the employee does not care. he is not gonna sue the company that pays him for not doing their duties because it’s not his job.
https://www.cpacanada.ca/en/news/canada/2021-07-20-teleworking-abroad-tax-impact

«By not doing so, you could end up having to pay back huge sums of money. »
this is likely not accurate. if you are not tax resident: you in fact are not supposed to pay taxes in the first place. CRA is likely making much more from your taxes has to return them to you same as you have to return ccb; and taxes paid are generally much greater than ccb received.

« You may not want to pay taxes in Poland but if you’re living there it’s not up to you. »
yes legally you should let Poland know and pay taces in case you have to (I don’t know about Poland, but many countries do not make you pay taxes on benefits already taxed on other countries but legally you have to do you research)
And btw, it’s none of canada ´ s business if a polish is breaking poland’s law. canada only cares about canadian laws.

 

[gmajdoub]

You have made some large assumptions that are potentially incorrect. You can’t use your cousin’s address as your residential address for government documents if you aren’t living there. CRA determines whether you are a tax resident or not and whether your children can receive child benefit while outside Canada even if you’re a tax resident. The whole point of CCB is to help with the cost of raising children in Canada so if you are not living in Canada then there are no guarantees that they are entitled to receive CCB. You must notify CRA that you are not living in Canada. Your employer can not pretend you are living in Canada and must pay you as someone living in Poland. This is actually fraud. You must notify CRA when you moved out of Canada and ask them to determine if you are still a tax resident and whether your children are entitled to CCB. By not doing so, you could end up having to pay back huge sums of money. You also must notify your provincial health authority when you left Canada.

You may not want to pay taxes in Poland but if you’re living there it’s not up to you.

And good to know also:
I found there is already a tax treaty between canada and poland.
https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/poland-convention-2012.html
So our friend’s employer here is likely aware and applying the treaty

It confirms what I say above. your benefits taxed in canada cannot be double-taxed in Poland.