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An Introduction To Tax Issues For Investors And Canadian Immigrants

By Scott Wallace


When moving to a different country either to live there permanently or simply to do business, one challenge you are certain to experience is getting a full understanding of its tax laws. Each nation has its unique laws, so it may be a while before you get the full lowdown of what you need to do. These insights detail basic tax issues for investors and Canadian immigrants and may just be what you need.

Under the laws of Canada, one becomes liable to pay tax depending on his immigration status. It is therefore important to know what your official status in the country is. If you have already received your residency papers and are doing business in the country, you need to register with the tax authorities so as to avoid legal complications.

Generally, the day that an immigrant gets recognized as an official resident by the Canadian government is the day that person becomes tax liable. This may happen upon arrival or the chase for valid paperwork may last years. Other factors that the authorities consider include the ownership of property within the country and marriage to a Canadian.

Once you get the green light to live and work in Canada, the law dictates that you pay up on time and file your returns each year. Income that the taxman regards as taxable includes any money originating from both foreign and local sources. This essentially means that any cash you raise from your business ventures overseas will be considered taxable. Nonetheless, a citizen who resides overseas is only taxed for money generated from sources within his mother country.

One factor that most immigrants often overlook when relocating is analyzing the difference between their new levy rates and what they are accustomed to paying. As your overseas income will be levied, you may be surprised to get a higher or lower levy rate depending on what your parent country used to charge. If you avoid analyzing this before your move, you may end up with very little at the end of the month and regret your move. Do whatever is necessary to find out about this beforehand.

Just like in many countries, the sources of income recognizable under the local law are many. There is employment income and income from investments such as dividends and royalties. Investment income is usually classified as either being from businesses located within or outside the country. Regardless of where it comes from, the bottom line is that it will be taxed as long as you are eligible for taxation.

If you are relocating due to a job transfer, you must know what to do to avoid excess taxation. Pay special attention to the date you get posted as the authorities will use this to calculate how much you owe the state. There should be a clear distinction between the day you became a resident and the day you were yet to get registered.

Before you begin paying up, apply for a tax ID number. Without one, the state may find you culpable of evading payment in its subsequent audits. The deadline for filing returns is the thirtieth of April each year.




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