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Notifying the CRA of your Canadian Residency

If you are new to or returning to Canada, you may want to have the Canadian authorities deem you a resident of Canada for Income Tax Purposes so that you are taxed as a Canadian resident.

This is particularly important if the Canadian tax rate is lower than the rate in your home country. It is also possible that your home country will not require that you pay any tax if you are paying taxes in Canada. In doing so, you gain a considerable tax advantage.

Additionally, if you have moved to Canada permanently, you may not want to file and pay taxes in another country nor deal with foreign tax authorities.

How Does International Taxation Work for Dual-Citizens or Immigrants?

Most countries around the world have a tax treaty with Canada. Tax treaties are intended to prevent double taxation, using the process described below.

Tax treaties typically determine which of the two countries has the right tax a person’s income first. Naturally, every country will prefer to be the first-to-tax country as this is the country that will be entitled to the larger portion of tax. This is because the other country will only be entitled to the differential between the tax rate in the first country and its own country’s tax rate, essentially getting only the second, smaller portion of tax.

Once the individual pays the Canadian tax, he or she will receive a Foreign Tax Credit (FTC) to evidence the Canadian tax portion paid. The FTC is then presented to the foreign tax authorities, permitting the country to only tax the individual on the difference between the Canadian FTC and the foreign country’s rate of tax.

Why you Need a Tax Lawyer

With years of experience in corporate and commercial law & tax law, Kalfa Law is your perfect partner for all your legal tax needs in submitting an NR74 residency application on your behalf in order to minimize or streamline you international legal tax obligations.

Returning or New to Canada? We’re here to help™.

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