I have been living here in Taiwan for 5 years, for some of those years I was working and others I was a student. I plan on going home within the next few months. What will happen in terms of taxes when I go home? Will I have to report my earnings in Taiwan, or pay any money to the Canadian government?
Canadians still have to file taxes unless they have applied for non-resident status.
According to the Canadian government, you should have filed an income tax return every year you were away. For income tax purposes, being a ‘resident of Canada’ does not have its ordinary meaning. You were living in Taiwan for 5 years, but probably the gov’t will consider you to still have been a resident of Canada. Did you inform your province that you were leaving and were therefore taken off medicare? That’s one of the ways they decide if you are a resident or not. Others: do you have a bank account in Canada? Property? Credit cards?
However, I don’t think they’ll catch you if you don’t report. Just in case, keep copies of your Taiwanese income tax returns, if any.
I dont have health care so I guess they know im not there working. I cant remember if I did anything to let them know id be away for an extended period. Ill go to get all my tax info before i head back. Anyone see any potential problems with any of this?
Yes. If Revenue Canada determines that you were still a resident for the past 5 years you owe back taxes and could face charges on tax evasion. So yeah, a potential problem.
Do you own any property in Canada, or credit cards with a Canadian bank, or bank account? Do you have a provincial drivers license? If you have flown home these past years did you declare yourself a non-resident on the customs declaration? All these things can be used to determine residency. This is a very serious matter. Likely you are no considered a resident but I wouldn’t be so casual about it.
No i dont own property, yes i have credit cards and a bank account. I guessd im guilty on not knowing the law. I assumed that by living outside the country i wouldnt have to pay taxes in Canada, My teaching salary on paper is peanuts in Canada. Everyone i know just taught here, went home and had no problems, and im sure they didnt file income tax back home.
I think most people who go overseas to teach for a few years don’t realize the gov’t thinks they are still residents and should be paying tax. They think that resident = actually living there, whereas the gov’t has a more stringent view. So they go home and never declare it, and most are never caught. I have heard of only one person who was caught - he was expected to pay back taxes on his income from teaching in Japan.
so in reality people who teach abroad have to pay taxes back in thier home country? Jesus if people knew that there would be zero reason to come here. Any idea what someone would have to pay if they presented thier tax recipts upon going home? On paper id certanly be in a very low tax bracket. And since i have no health care im pretty sure someone in my family informed the gov im not living in the country. Ive never heard of anyone having to pay taxes back home after living abroad teaching, of course i could be wrong.
Not to be condescending, but you’re an adult with access to a telephone and the internet. Ignorance is absolutely no excuse in this case. Likely as baba says, nothing will happen, but you could face prosecution.
In short, yes of course you have to pay taxes when living abroad. This is common knowledge and it is hard to believe you lived abroad 5 years and did not ever engage in a discussion on this. Americans get a whopping US$85,000 or so deduction, meaning they don’t pay any taxes in the US should they make less than this abroad. Canadians must declare and pay taxes on all income. Other countries have variations on these two options.
Now Canada has tax treaties with many countries so we are not doubly taxed, but since we don’t recognize Taiwan as a country we have no treaty. And so most Canadian teachers in Taiwan declare non-residency while they are here.
When I was teaching this was commonly talked about by Canadian teachers. We all knew the score and most declared non-residency. I knew one guy who didn’t because he bought a house. But his official pay in Taiwan was so low that he hardly paid anything on it in Canada.
Well i called Canada revenue and they dont give a shit about poverty stricken English teachers paying taxes. The guy on the phone asked me why the hell would you pay taxes in Canada when youve been abroad so long, they know youre not a sesident after some time and cancel health insurance ect. I may have to file taxes when i get back but wont have to pay anything. I had been thinking of this Mucha man, but just couldnt remember if i actually declared non residancy many years ago, turns out i didnt and it wont be a big deal anyway.
Does Canada have a foreign earned income exclusion like the US does? It really would be silly to have your income have to be taxed twice.
The soft rule is two years–this applies when you don’t have ties to Canada. That said, you can get by with some ties. I maintained a driver’s license as it was a second piece of English ID (and it’s referred to as a driver’s license/ID card); I also maintained a bank account account to pay back a student loan.
Here’s a good resource for questions on residency and taxes.
blog.taxresource.ca/living-abroa … -resident/
Spoke to a tax lawyer in Canada just now. English teachers abroad never have to pay taxes back in Canada because we don’t get any benefit from the country, Canada pension, health care ect during the time abroad. I was told that I do have to file but wont actually have to pay up, especially since our salaries on paper would put us under the poverty line back home. So much for tax evasion.
I’m sorry but you aren’t making much sense here. You claim teachers never have to pay taxes because they receive no benefits but then later claim that its because salaries are so low on paper. So which is it and what about teachers who make good official incomes (such as those teaching at International Schools and possibly maintaining residency at home)? What about those not in the teaching profession? You are writing as if ESL teachers get some special tax break which is obviously not true. Furthermore, if you are have declared non-residency then you don’t need to file so again you seem to be stringing a lot of issues together. It’s really not helpful.
Never said only esl teachers, it was just the example I spoke to him about. I thought I declared non residency in Canada but didnt, which according to the Canadian government doesnt matter anyway. I didnt ask about people making more money because that doesnt concern my origional post which was about myself. I never said once esl teachers have some special tax break, pleas show me where I used those words.