If i work in the US, i dont pay taxes, as if i woked in dubai, right?

[george benjamin]

Hello,

I was wondering that if a canadian citizen worked in the US, would he pay taxes ?

I you an expat or something? as if you worked abroad, in the middle east lets say?

Thanks.

[gfunk333]

You will have to pay Canadian taxes on your US income, if you are deemed a resident of Canada by common law tests. However this does not exempt you from US source deductions. Your Canadian taxes are reduce by foreign tax credits, and tax treaties we have with the US which overwrite the Income Tax Act.

It dose not matter if you work in Dubai or the States, because Canadian residences are taxed on they're worldwide income. However you are better off working in the States, as we do not have treaties with the Middle East which will limit your deductions/credits. I have no idea what the taxes are in the middle east though, so it could work out either way.

Non-residences are only taxed on they're Canadian source, rental, business income ..... etc. So to answer your question ...... cut all ties with Canada before your departure date and you won't be subjected to Canadian tax on foreign income. i.e. sell house, car, cancel credit cards, memberships ..... kill family :cheesygri

I have no idea what your second sentence means ....

[vl_86]

what would happen if you applied for citizenship in the states like you were working in the states with a work visa but lived in canada before? would you still be paying canadian taxes or can you choose residency in the states and pay only united states taxes

[Bytown]

what would happen if you applied for citizenship in the states like you were working in the states with a work visa but lived in canada before? would you still be paying canadian taxes or can you choose residency in the states and pay only united states taxes

If you mean you move to the states full time.The yes you would only pay taxs in the states.Keep in mind if you move back to canada you then would have to pay the canadian tax.

[azn_dan]

I actually work in the US and abudabi and i pay NO tax!!! I just use a method known as tax evasion. They can never make me pay taxes with my bank accounts in vietnam and uraguay. I think if you end up paying taxes you are considered a failure as a parent who farts in front of thier children.[/sarcasm](only the OP will understand this)

[rborek]

what would happen if you applied for citizenship in the states like you were working in the states with a work visa but lived in canada before? would you still be paying canadian taxes or can you choose residency in the states and pay only united states taxes

Don't confuse citizenship with residency. If you have ties to Canada (primary residence, bank accounts, other assets, etc.) then you are a deemed resident of Canada and have to pay taxes. If you have cut all ties to Canada, then you are no longer deemed a resident.

Note that the TN visa does not allow you to work towards your green card, and you will always be a deemed resident of Canada (as the TN visa is temporary only - you must maintain ties to Canada).

Also, the US has an even more happy fun situation for citizens - you are taxed on worldwide income regardless of residency.

[Bmp5]

I would also add:

When you cut canadian ties, you will have departure tax on properties other than exempt ones. This will deem the person to dispose the property at Fair Market Value and pay taxes if Fair Market Value exceeds cost. These rules can get complex if you have lot of assets. An example of exempt property would be principal residence, RRSP, etc.

Both income from US and Dubai will be taxed the same in Canada.
Us income: You will get credits and pay tax in Canada if tax rates in Canada > rates in US.
Dubai income: No tax ( I believe there is no tax in Dubai). SO you will have to add the employment income in your taxable income which will then be taxed at Cdn tax rates
Bottom line: Canada will tax both income the same way except if tax rates in US > Canadian rates

[gfunk333]

what would happen if you applied for citizenship in the states like you were working in the states with a work visa but lived in canada before? would you still be paying canadian taxes or can you choose residency in the states and pay only united states taxes

Ya ...... I should have explained residency better. It has nothing to do with citizenship or passport. It's strictly residency for Tax Purposes only. You cannot "choose" your residency, thats why you are "deemed" a resident, non-resident, or part-year resident. If you don't like the CRA's decision take it to court. This is where the tax lawyers make they're money.

Everything else I believe the other 2 members have already covered.

[YnD]

Makes no sense...

Why would Canadians go to work in the US if they are going to get taxed 60%their income...assuming both US and CDN income tax is applied at 30% each?

[gfunk333]

If you mean you move to the states full time.The yes you would only pay taxs in the states.Keep in mind if you move back to canada you then would have to pay the canadian tax.

This is not true, it really does not matter where you live. Residency is determined by your primary and secondary ties with the country.

For example (and this is a little on the extreme) ...... A Chinese citizen that lives, works, and owns a house in China *could* be deemed a resident of Canada and would be subjected to Canadian Tax, if his entire family came here to start a new life, education for the kids, better quality of life ..... whatever. But this is all case law, and I'm not a lawyer so I won't go too much into it.

Like the 2 other members have already mentioned, to be deemed a non-resident you have 1) cut your ties with Canada, and 2) show a "fresh start".

The rules for ACB, FMV, and POD on departure tax gets even more complicated depending on timing.

Too many CA's on RFD! lol

Any tax guys or girls here?

[Bmp5]

You are going to get taxed in the US first. Then Canada will retax you on the income but will allow the tax paid in the US as a credit (which reduce you Cdn tax)
In your case, then you will most likely pay 30% tax if that income is employment income. SO you will not be taxed 60% of your income.

[Bmp5]

Just want to add to gfunk333 about the chinese guy example:

In his case, he might be resident for both Canada and China. He only needs to stay in Canada for more than 183 days to get caught by the deeming residency Canadian rules
He will be taxed in Canada on his worldwide income (not only income earned in Canada but from other country as well) per the Tax Laws in Canada.
He will also be taxed in China per Chinese Tax laws on worldwide income.

The poor guy is going to get hit twice. So, then Treaty comes into play and as tie-breaker rule, only one country will be allowed to tax the chinese guy on worldwide income. USually, the guy will have to go through competent authorities to determine residency and prove to the authorities where his ties are more severe. Some tie breakers are more clear about which country gets to tax on worldwide income depending on the convention between Canada and that foreign country. Others are more general and thats when you have to go through competent authorities.

This applies to countries with which Canada has entered into a Treaty.

[gfunk333]

Makes no sense...

Why would Canadians go to work in the US if they are going to get taxed 60%their income...assuming both US and CDN income tax is applied at 30% each?

I guess this is why they pay the lawyers big bucks ha? lol

I know what you mean though ....

The answers is technically you do get taxed both in the US and Canada. However that tax is reduced by foreign tax credits to bring it down to a equilibrium. We also have tax treaties with the US which overwrites the ITA, that prevents tax on certain items. So after all this calculation you're back to square one.

It's a different scenario for every country.