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  • Any Canadian citizens??

    Any Canadian citizens here? I heard about the once you fill out the determination of non-residency form, then you dont have to pay income tax (of what you made in Japan) to the Canadian government. Can anyone advise?

  • #2
    Re: Any Canadian citizens??

    Canadian here, eh?

    DON'T FILL OUT THE FORM!!!

    Have you filled it out already? If you do, sux to be you, you gotta pay.

    In your first year you're okay. Don't fill out sh*t. You are below their radar.

    Into year two, if you want to stay in Japan without paying Jean ... or is it Paul Martin, then close your bank accounts back home. Cancel your credit cards, phone bill etc etc, anything that makes it look like you still have a partial life in Canada. THEN fill out the forms.

    Cut the ties to motherland, and they have no reason for you to pay taxes the theory goes. They figure if you've canceled our (Canadian) med coverage, bank accounts etc, then you really are living abroad and relying on THAT countries resources rather than Canada's. Thus they wont tax you.

    IF you feel uncomfortable about cancelling bank accounts and such, then they will eventually track you down with some form called "T-whatever" and then ask you to pay up in a nice generic form letter spat out of revenue's canada's computers.



    Post Edited (11-28-03 19:40)

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    • #3
      Re: Any Canadian citizens??

      It really depends on how long you've been here and some of those things mentioned by "backwards fish"

      It's also key that you don't owe Revenue Canada anything. They hunt down debts.

      Other than that, if you've got a visa, job and are paying taxes in Japan it you can't be taxed.

      Canada and Japan have a tax treaty for that one!

      However, if you want to park your money in Canada and pay the foreign investor rate (25%) on any investment proffits versus local taxes, higher, it's a good idea to declare your non-residency.

      Also if you didn't and started investing the paper that could lead them to you and perhaps trigger an audit. Who knows!

      However the bank account thing I've never heard of one causing a problem and some of my Canadian friends have been out of the country for more than 7 years.

      The only reason I've filled one out after 4 years here is for busness, in Canada, purposes.

      It's called a NR 73. It's under forms on the Revenue Canada website. You can print it out and fill it in if you want.


      However, if any of the above doesn't apply to you why bother?

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      • #4
        Re: Any Canadian citizens??

        I have an HSBC Canada account. I also have a Citibank Japan account (which I park my money). I have a working visa and am planning to stay here to work for the next 10-15 years. I just want to keep my Canadian passport and go back to Canada when I retire.

        I have been working here for the past year. I am not planning to park my money in Canada. I want to keep my money local.

        Does it mean that its better for me not to do anything? What will happen when I renew my passport? It will due on 2005.

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        • #5
          Re: Any Canadian citizens??

          The treaty does not necessarily protect even if you are 'working, living, and paying taxes in Japan'. The treaty essentially provides that the country in which you have the closer connection has the primary right to tax you. The more ties you maintain with Canada, the harder it is to escape Canadian taxation.

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          • #6
            NR73 - My story

            Last time I was in Japan, I didn't fill out this form. So I was still a resident of Canada. My colleague R, did fill out the form. When I returned to Canada, I had to pay $3,500 in taxes in addition to the $1,300 tax I'd already paid to Japan all that year. I did my taxes when I got back into the country and I was 100% honest with Revenue Canada, I even paid $100 for a professional to do my taxes. I got audited as well. Revenue Canada said if I didn't complete the audit that they'd add another $1,300 to the bill. Interest rolls fast too. I did the audit, and was cleared of the additional $1,300. They've given up their hunting attitude with me this year because they know I don't have the money to pay except in little amounts. I hoped after I did my taxes this year that the bill could be reduced. Yes it was but only by a few hundred dollars.

            Oh yes, and my colleague R, who filled out NR73 the form and had the same income as me did not have to pay any tax when he returned to Canada. Another friend N had 1/2 my income but didn't fill out the NR73. He didn't pay any tax either.

            So I am gonna fill out the NR73 this year to be a non-resident of Canada. I'm able to cancel my provincial health care, but I'll still have a Canadian bank account, credit card, storage locker, mailing address and my health insurance will be for Japan, but its provided by Viator, a Canadian company.

            I figure that because I have been audited before that they won't hesitate to do it again.

            What I'd like to know is will I be considered a resident of Japan for tax purposes? And if yes, how do I submit proof of this fact to Canada?

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            • #7
              Don't know what kind of advice Backwardsfish is trying to give, but most of it's bad.
              Originally posted by Backwardsfish
              DON'T FILL OUT THE FORM!!!
              Wrong-fill out the form. It's the only official record the Canadian government will have of your non-residency.

              I was in a similar situation after my first year here-didn't fill out the form, so therefore was considered a Canadian resident and was legally obliged to pay taxes (which amounted to several thousand dollars). What saved me was being able to prove that even though I hadn't filled out the residency determination form I was in fact a resident of Japan-and I did that by providing copies of my Japanese income tax return.
              Originally posted by Backwardsfish
              Have you filled it out already? If you do, sux to be you, you gotta pay.
              No, you don't have to pay anything. Especially since according to the provisions of the Japanese-Canada Tax Treaty, if you are an established resident of Japan then you are not liable for any tax obligations in Canada. Provided you can prove that. Filling out the residency form won't hurt; reading from the evaluation letter I received from the CCRA, it states that even though I am considered a factual resident of Canada, for tax purposes I am deemed a non-resident due the the tax treaty. So you'll be safe-just make sure you can prove your claims if the government comes calling.
              Originally posted by Backwardsfish
              Cut the ties to motherland, and they have no reason for you to pay taxes the theory goes. They figure if you've canceled our (Canadian) med coverage, bank accounts etc, then you really are living abroad and relying on THAT countries resources rather than Canada's. Thus they wont tax you.
              Again, wrong-if Backwardsfish had bothered to read the form, he would realize that the criteria the government uses for determining residency is VERY extensive; it's not just limited to the obvious. If you have any property at all (cars or vehicles in storage), a mailing address, memberships to any sort of organziations, magazine subscriptions, all of these can and will be used to determine residency. Besides, why would you perform such an extreme action as he suggests when under the terms of the Japan-Canada tax treaty you are exempt? I have a bank account. I have enough major ties to Canada to be considered a factual resident. But I don't pay taxes.

              My suggestions:

              1) fill out the residency determination form,
              2) prepare every piece of documentation you can think of that can clearly establish your residency in Japan. Japanese tax return, health insurance receipts, copy of your ARC and passport (with appropriate stamps).
              3) contact the International Tax Centre (you can pull their number of the 'net) and explain their situation to them. If you have already been assessed for taxes, be prepared for a lengthy and torturous procedure to clear them-it took me about 7 months to clear my bill.

              Comment


              • #8
                tax

                I had provided a copy of all my Japanese income tax slips, Japanese paystubs. Somehow they still demanded the money. I have been paying what little I can as I've said.

                I noticed on the NR73 form it says "if you have a contract with your foreign employer please provide a copy of it". I think that it would be unwise to do that. Don't you? I have a contract but I don't think there is no damn way those bastards are getting a copy of it.

                My income is not going to be connected to my Social Insurance Number. It is tempting to tell them NOTHING. However I've been audited before and I wish to have a clean record.

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                • #9
                  uhh...this is all a little confusing. i dont even know enough to know what i don't know.

                  where can i go for more information? i really dont want to save all this money in japan over the course of 3 years, only to have to hand it all over to the canadian government!!

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                  • #10
                    You don't HAVE to fill out the form. Nowhere does it say you do. It is "advised" you fill it out.

                    Of course, us accountants now....just tick a box on your next tax form and submit it with a $0 income in Canada. The box simply states you are now a non-resident. Easy as that.

                    Abide by the rules/requirements set forth in the "application for status of non-residence" form, but by no means must you submit it EVER. However, if they do come after you down the road, you want to be sure you're doing things right.

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                    • #11
                      This is my situation. I'm a Canadian citizen. I plan on going to Japan for one year, tops. I've looked into claiming "non-citizen" status, but after going over the application, I've realized I have too many ties.

                      So do I claim when I come back? Is there anyway that the government can find out that I was there? If I claim, will I be paying out the nose, or does the "tax treaty" reduce the amount?

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                      • #12
                        Originally posted by Keano
                        This is my situation. I'm a Canadian citizen. I plan on going to Japan for one year, tops. I've looked into claiming "non-citizen" status, but after going over the application, I've realized I have too many ties.

                        So do I claim when I come back? Is there anyway that the government can find out that I was there? If I claim, will I be paying out the nose, or does the "tax treaty" reduce the amount?
                        tick the non-resident box on the return (its near your nameon the front page), and calculate how much to claim based on your taxable income.

                        I'd slip those Otterwater weasels about $300 just to keep them happy. If you pay something, they might accept it. If you pay nuttin and say you made nuttin, they might well come after you.

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                        • #13
                          residency

                          I've been in touch with cra for some time. basically what they told me is this. Because japan doesn't tax me on my world income, I'm still considered a resident of Canada for tax purposes. since I'm a resident of Canada the money i make in Canada is not tax free under the tax treaty. all it means is money i make in Canada cant be taxed by japan.
                          I'm still not 100 % satisfied that thats the end of the story though. Ive read on an international accountants web page that you declare the money on your tax return, and then deduct it all based on article 4 of the tax treaty on line 256 of your return. Ill be talking to an accountant next week who specializes in these kinds of returns. Ill keep you guys posted.
                          Id appreciate hearing from anyone who's been through the same situation. especially people who didn't have to pay the tax!

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                          • #14
                            Sorry, I posted a reply and then thought better of it. You never know who is reading these things and taking notes.
                            Last edited by Question Mark; 2008-06-01, 12:28 PM.

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                            • #15
                              I haven't filed a tax return since 2002. That should raise a few eyebrows...I have the tax forms from all my employers to prove that I was a resident of Japan. We'll see what happens...

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