Lamin415

I have accepted a job overseas (rotational), great job, great package, however it is soon locating to another neighbouring country. I will need a work permit to work there, its organised by the company and as such I will have to pay 40% tax in country. The issue is that the country has no treaty with Canada so from my research this means my net (after the gross has already being taxed at 40%) will now be taxed again in Canada, roughly another 40 %. A far from ideal situation and it is leaving me a little bit sour about life in Canada.
With rotations I get to come home every 6 weeks for two weeks. I am divorced with a daughter close by. The tax situation is looking very untenable and colleagues have suggested applying and registering to go non dom for tax purposes.

This looks appealing and financially beneficial but I will need to do some research. Has anybody done it and if so what are the pros and cons, if you don't mind sharing?

I am 55 years old, I have been here 6 years and I doubt I will actually be retiring here if that helps?

Many thanks.

dbd33

You'll give up OHIP or equivalent and, I suppose, will have to stay out of Canada for more than half the year.

christmasoompa

Can't help with the non dom thing but just to say if you're not a citizen and only a PR, be careful of how time outside Canada may impact your status. Hopefully you're a citizen if you've been in Canada for 6 years so you don't need to worry, but just thought I'd flag it just in case!

Lamin415

To clarify I am a citizen.

ribblerider

How does it work if you are a self employed contractor? Ie say you worked in a staff position for a UK company in a PAYE role, but then that changed to as a Contractor on a day rate?

Lamin415

I am afraid thats not an option. I have tried that as I also have myself set up as a self employed contractor but in this role I am an employee.

dbd33

I did that for years. I don't think it helps with this issue, Canada (possibly everywhere but the UK) doesn't have the concept of non-dom, being physically here but taxationally over there, if you want to be non-resident for tax purposes you have to be non-resident, cut local ties, stay out of the country. Even in the years when I was gone for more than half the year I wasn't non-resident as I still had a house and cars and children and ex-wives and all of that in Canada. In any case, the typical set up for contractors is a numbered company nominally in Canada, that requires director residency, so you'd need an offshore entity to handle the money. One salary isn't enough to warrant the fees involved in setting up a proper offshore arrangement; we did have Delaware and Nevada corporations but they only simplify matters if the source of funds is the US.

Hemlock

In Canada, you don't get to choose domicile for 'tax purposes'. CRA set the criteria to determine residency, if one meets the threshold, you are a tax resident.
Also, there are tax implications for being considered leaving Canada if you have assets in the country. See departure tax of CRA website.

GiantSantaCruzer

Are you sure that's correct? I thought you could claim a tax deduction (or maybe a credit?) against tax paid in a foreign country. I'd get that confirmed by an expert before trying any other creative solutions...
(If I'm understanding your post correctly, you seem to imply that Canada would tax you at 40% of the net earnings from the foreign company, which doesn't sound "correct".

Lamin415

Yes as there is no tax treaty between the two countries. Therefore whatever I pay in local tax in country A is not recognised and no credit given for it. My understanding on it but very happy to receive any advice or suggestions otherwise. Non DOM is looking like a headache as not only do I have to give up health Ins, CPP , no RRSP etc but it may prove unfounded as I have a house in Canada that at some point I will return to. I also have family ties in that I have a daughter here too.

I also have a small rental in the UK -----which could easily become my new crash pad-----however I will have to let the tenant go and I would also pay CGT to Canada for the luxury of it.

Screwed either way it would seem, but which one is the lesser?