International Tax Accountant in Toronto Watch Video
Allan Madan, CPA, CA
I am an international tax accountant in Toronto. I help my clients with tax compliance, Read More…
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CPA, CA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
I’m moving to Switzerland and will be making 80,000 CHF there. However, I have a condo (currently primary residence) that I will rent out here in Canada and another that is an investment condo. I have also sold my first business here in Toronto for 200,000 and receive payments for it on a monthly basis. My question is how can I situate myself to pay the least amount of taxes for the next few years in Switzerland. I have no set plans on returning to Canada but will be moving back or to another country after a few years since I’m going there for a postdoc and not a permanent job.
Hi Keir,
Thank you for your inquiry!
In terms of your question to minimize taxes owing, it would be best if you relinquish all your primary and secondary ties from Canada thus becoming a non-resident of Canada and a resident of Switzerland. Switzerland’s tax rates are substantially lower than Canada so you want to pay as little tax as possible on the 80,000 CHF (approximately $85,000 CDN).
By becoming a non-resident of Canada, you will be required to only file a section 216 personal tax return for the rental income on your properties in Canada. You will not have to declare your world income on your Canadian tax return and thus not have to pay tax in Canada on your Switzerland salary. However, you will need to declare your worldwide income on your Switzerland tax return as you have real estate owned outside of Switzerland.
In additional, it will also depend on which municipality in Switzerland you will be situated in. For example, Zug has the lowest tax rate while Neuchatel has the highest tax rate.
I have an offer to move to UAE. My family will also be moving with me. I will be severing my ties with Canada i,e selling my home, closing bank accounts etc etc
I am the single earner in the family. Would that be a possibility that my wife can keep a bank account and some investments in her name while I claim for non-resident status for tax purposes?
Thanks
Hi Abdus,
We normally suggest to our clients that they may keep once bank/credit card account in Canada without jeopardizing the non-residency status. But make sure to contact her bank to notify them that your family is a non-resident of Canada.
I don’t see much problems with holding shares in determining your residency status.
– Allan and his team
Hi,
I am expecting a 3-year contract for employment with a foreign company in Saudi Arabia, and after contract completion coming back to Canada. During the contract time my home, wife, bank accounts, etc will remain in Ontario.
My question is – Shall I fill tax return over three years, and pay every year income tax to CRA from money made in Saudi Arabia, even though I will not be physically in Canada?
I would appreciate your advice.
Best regards,
Bill
Hi Bill,
As your significant ties including your permanent home, spouse will remain in Canada, you will be considered resident of Canada for tax purposes. As resident, you must file your Canadian tax return annually.
Therefore, the answer is yes. If you pay any Saudi tax on your employment income, then you will be able to claim a foreign tax credit for the taxes paid to Saudi when you file your Canadian tax return.
– Allan
I was thinking about setting up a delivery warehouse in Canada. Will I be ” a deemed Canadian” and have to pay tax on all my worldwide income?
Hi Aaron
If you are setting up a warehouse only for delivery purposes then you will not be deemed a Canadian for tax purposes. Additionally a warehouse meant only for delivery is not considered a permanent establishment. Thus you will not be required to pay any tax in Canada. You must have supporting documents to prove its only for delivery and provide them to CRA
I worked in Canada for two 4 month periods totaling 8 months does this mean i avoid the 183 day rule because I left and then came back?
No the 183 day rules is not consecutive days in Canada but total. Thus you will be deemed a resident of Canada and be taxed on your world wide income.
Thanks
Team Allan
I’m thinking about setting up a new subsidiary of my corporation in Canada. I am doing some research on corporate tax rates. I was just wondering which province has the lowest corporate tax rate?
Hello James,
Here is a link to the Corporate Provincial tax rates for all Canadian provinces via CRA
Hi Allan,
I know that you can make deductions for charitable donations but I was wondering if there was a credit for donations made to political campaigns during the year.
Thanks
Yes you can claim a political deduction towards provincial parties. It is a tax credit on your personal tax return. The deduction is 75% of the first $372, plus 50% of the next $868, plus 33.33% of an amount exceeding $1,240, but not more than $2,821. For more information about this credit visit this bulletin on the deduction by the Ministry of Finance of Ontario.
Thanks
Allan
Hi Allan,
I am thinking about moving to Canada I was wondering how Canada’s tax ranks internationally. Does Canada have considerable high taxes?
Thanks
Hi Gurdeep,
Canada does generally have high taxes compared to many countries. We also have many benefits because of it such as free health care and a relatively stable economy. From a recent study published by the Organization for economic Co-operation and Development report Canada ranked third lowest in total tax burden relative to its Gross domestic Product among G-7 countries. We may be taxed fairly high but we are relatively low when it comes to comparable countries.
Thanks
Hi Allan,
How are you? I was hoping you might be able to help me. I am Canadian but have been living in Brazil for 20 years. I am considered a non-resident in Canada for tax purposes. I understand that Canada and Brazil have a tax treaty, but I was wondering if you might be able to initially tell me if I can maintain this status if I open a bank account in Canada and begin to transfer funds to my account. Also, is it possible to purchase property or securities while maintaining my non-resident status. If you wouldn’t mind, please send me an email with your consulting rates so the next time I am in Toronto we can arrange a meeting. Thank you for your time.
Regards,
Rodney
Hi Rodney,
Opening up a bank account or buying Canadian investments will not cause you to become a resident of Canada. For my rates and services, please send me an email at amadan@madanca.com
Thanks,
Allan Madan, CPA, CA
Tel: 905-268-0150
Hi, I am a canadian and I want to become a non resident to move permanently in Hong Kong, with my son and husband. I am already in Hong Kong for the past year and will eventually work.Do I need to declare non residency with a form call nr73?. Or can I simply cut all my cards, bank accounts? I own a duplex with my brother and it is leased right now. Is it better for me to sell the property to avoid future audit or whatsoever?
Hi
I have been a dual citizen US resident for 20 years. I have a new non-registered segregated Canadian fund which sent me an NR-4 with type 11 income (estate and trust income), with no tax withheld, exemption code S. This is my only Canadian income. There was no distribution taken, it was internal. Do I need to file a non-resident return in Canada?
Hi Jim,
No, you don’t need to file a non-resident tax return in Canada.
Hey,
Thank you for your time and would really appreciate your help in answering this question
I own an online business I am trying to apply to get a 0% tax withholding rate. My Corporation exists in Canada, I am given options but kind of stumped on what to choose, could you please shed some light I would be grateful.
Please see below..
A)Company meets the Ownership erosion tests
B)Company meets derivative benefits tests
C) Company with an item of income that meets the active trade or income test
I choose C.
Please advise which option is right? thank you so much.
Kind Regards,
Ahilan
Hi Tristan, choose option C.
Hello, I am a Canadian living in the us…while living in the US, I was crossing the border daily to work for a Canadian bank. I have now resigned and am working for a US company in the US. Both my husband and I are on a J1 and J2 visa. WE are not sure how to file our taxes
Hi Sharan, you are a cross-border commuter. As such, you should file a T1 non-resident return with the Canada Revenue Agency, and a US 1040 Return with the IRS, since you live in the US, but work in Canada. I can prepare these returns for you.
Hi MadanCA/SuperAmin
If I have residential ties to Canada, and earn income from investments abroad (funds, bonds, and dividends), how much would I get taxed?
The issue is that I set up my account in UAE where the investments initially took place, but now the account was transferred to Singapore. Both UAE and Singapore have tax treaties. What are my tax implications?
Hi Rodrey, the investment income (dividends, interest and royalties) are taxed at your marginal tax rate in Canada. However, one half of the capital gains income you earn is not subject to tax. You may also have to fill out form T1135, Foreign Income Verification Statement, if the cost amount of your foreign investments is $100,000 or more.
If you transferred investments between accounts, then this is considered to be a sale and is taxable in Canada.