What are the penalties for not filing your taxes in Canada? If I try to re-enter Canada will I have any problems ? What can you do if this is the case you’re in? Anyone out there have any info on this?
This may give you an idea.
It depends on whether you are a resident or non resident. Basically, if you have been away from Canada for 183 days and have gained residency in another country (e.g., Taiwan), and have minimal ties (like just a bankcard etc.), you are deemed a non resident(although you can technically fill out a form for this with Revenue Canada).
However, if you have property in Canada such as cars, investments, RRSPs, houses, rental properties etc., you are deemed as a resident by Revenue Canada and must file a return on your worldwide income, including income earned in Taiwan.
As a general rule, since most Canadians come over to Taiwan in their early 20s, are often saddled in debt, and without ties and assets back home other than a bank account (to pay off those student loans), most, in my opinion, would be deemed as non residents after half a year (even without filling in the form, which many are hesitant to do because of privacy issues).
However, it really depends on your assets/connections back home. For me, coming over to Taiwan in my early 20s (before leaving 6 years later), I had no connections back home other than a bank card. If I decided to come back to Taiwan in the future (in my late 30s or 40s) or become an expat again anywhere in the world, I would have to sell my house, freeze my pensions, RRSPs, TFSAs etc., to become a non resident, as well as consider the impact of leaving on time-qualifying entitlement programs. Furthermore, you can’t just put it in another family members’ name.
That’s why when Canadians in their 30s, 40s or 50s with assets consider expat packages or just going overseas to work regardless of the package, they should consider (A) this process of divesting which may include selling real estate; (b) the programs they won’t be contributing to anymore that will impact retirement–namely CPP–qualifying for the 40 year qualifying period to get the full amount, their RRSP/TFSA contributions (you are throwing away the opportunity with the latter to invest 5000 with no capital gains tax), and their private pensions if they are working; and © other entitlement programs their will not contribute to while abroad such as 1. government RESP grants (up to 500 dollars per year per child 2. Universal Child Care payments if they have kids; and 3. the residency requirements for Old Age Security (need 40 years of residency for full amount–this is separate from CPP).
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+1 to the above–very thorough.
Only thing I will add is the TFSA yearly limit is now $5500.
Does Canada have a tax treaty with Taiwan? They didn’t used to. Which would basically make filing in both places a bad idea. That said, if you have income in Canada, or assets of any kind there, it’d be a good idea to file. It’s so easy there anyway, like a 30 minute online process.
I believe you can apply for a tax credit with the CRA when you file for taxes. They basically reimburse you for your worldwide income tax.
There’s an exit tax when you declare non residency