Canadian Tax Treaties

If you live away from Canada, it is important to understand not only your rights and responsibilities in the other country, but also your rights and responsibilities with regard to Canada.

One of the most important things to understand is your responsibility to pay taxes. However, a more important thing to remember is your right not to pay too much in taxes.

Canada has treaties with a plethora of countries for the understanding that there shall be no double taxation.  For the most part, this means that if you pay income taxes in a foreign country, you are exempt from paying taxes in Canada.

Not having to pay taxes in Canada, and not submitting a tax form in Canada, however, are two entirely different things.

Depending on your work situation, and if you are recognized as a Factual Resident of Canada, you may be able to submit your Canadian tax form, declare world income, deduct that income, and receive RRSP and TFSA contribution room.

Remember, though, this is only in regard to your foreign income. You are still responsible for reporting and paying taxes on and Canadian income, interest, dividends, or capital gains.

That being said, unless you are making 20 grand in dividends and interest, you probably won’t have to pay taxes anyway.


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