Work Permit and Canadian - INDIA tax issues -
david ingram replies:
In my opinion, you are taxable in Canada. - Under 15(2)(a), of the Tax Treaty between India and Canada, you are not taxable if you are in Canada less than 183 days but that also requires that your employer is not a resident of Canada (2(b) AND your payment or remuneration is not being borne by a fixed base or permanent establishment in Canada (2(c) .
If you are working in Canada at the head office of an Indian subsidiary, the chances are that the head office is funding the subsidiary and that the funding is ultimately coming from Canada. Other minds may think differently and your employer may have received a ruling from the Canada Revenue Agency (CRA) that supersedes the treaty. Do check and get them to put it in writing if they are implying you are not taxable in Canada.
You can read Article 15 here.
ARTICLE 15 of CANADA INDIA Income Tax Convention
(Treaty)
Dependent Personal Services
1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State (INDIA) in respect of an employment shall be taxable only in that State (INDIA) unless the employment is exercised in the other Contracting State CANADA). If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State CANADA).
2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
(a) the recipient is present in the other Contracting State (CANADA) for a period or periods not exceeding in the aggregate 183 days in the relevant fiscal year;
(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article,
remuneration in respect of an employment exercised aboard a ship or
aircraft operated in international traffic by an enterprise of a
Contracting State, may be taxed in that State.
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3. In the case of India, double taxation shall be avoided as follows:
(a) The amount of Canadian tax paid, under the laws of Canada and in accordance with the provisions of the Agreement, whether directly or by deduction, by a resident of India, in respect of income from sources within Canada which has been subjected to tax both in India and Canada shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax.
Good luck and you know where to get that partial year tax return prepared for Canada. - Your company should pay for it.----------------------------------------
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$1,700 would be for two people with income from two countries
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files. As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files. It can take us a valuable hour or more to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance.
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