misfiled taxes! :(

Hi everyone,

By the way, I'm impressed on how everyone is so supportive here. Needless to say, doing business with the CRA and other Canadian departments when leaving or re-entering the country is RIDICULOUSLY complex!

Ok so here's my situation:

I've recently returned from two years abroad in Vietnam. I left in the second half of 2006, and returned in the first few months of 2008.

2006:
I'm quite certain I was resident for 2006, since I was here for more than half the year, along with open back accounts, etc. But how should I report my income from Vietnam? How can the CRA verify any foreign income, particularly from a country like Vietnam? (which i am aware we have a tax treaty with.)

2007:
The problem is in 2007, I was abroad for the entire year, but indicated "resident" on my return by mistake. However I did not set foot in Canada for the entire year, and my only ties were a bank account, DL, and healthcard. No property, no family, no social groups, etc.

2008:
Returned in May. Obviously I haven't filed taxes for this year yet (I'm not THAT eager to pay taxes LOL!) But the question remains the same: what sort of documentation will I require from my employer in Vietnam?

One last point: I was taking distance education courses through a Canadian University the entire time abroad, and Quebec was my last province of residency. I am now resident in Ontario.

My question is:
what is the best approach for dealing with the CRA in order to "re-file" my 2007 taxes as non-resident? Also, if CRA somehow decides I was a resident in 2007 because of the gov't ID, what kind of documentation will I need from my employer in Vietnam? They've (my VN employer) sent me a letter (at my request) indicating how much income and taxes I've received/paid, but will the CRA accept something like this?

The more I read about resident, non-resident, deemed resident, deemed non-resident, NR74, 6601, etc, etc, etc, etc, etc, I am becoming increasingly confused!

HELP!

Thanks in advance for any assistance offered. VERY much appreciated.

Best regards,

Acadianite

You file a foreign tax credit for 2006 otherwise you will get taxed twice, the instructions for the T1 explain how to do it, how much of a credit you get depends on the tax treaty and what is defined as "income tax" in Vietnam.

For 2007 you've filed as resident, so ditto for 2007 basically. This is only going to cause you pain if the income tax rate in Canada is substantially higher than in Vietnam. You must declare ALL your income in Vietnam on your T1s, if you haven't, you need to file a T1 adjustment with the CRA to amend your returns.

All you need from your employer in Vietnam is whatever the equivalent of a T4 is there, get it translated and check www.bankofcanada.ca for the official exchange rate on the days you were paid.

I think you're going to find it hard to adjust your T1 for last year to non-resident because you are resident now and you filed as a resident. No harm asking the non-resident dept. in Ottawa though, if income tax in Vietnam is lower then you avoid paying the difference between the tax there and the tax here for 2007.

Hi Steven,

Thanks so much for your reply. My employer in Vietnam has only provided me with written confirmation of my salary paid and income taxes paid on company letterhead, everything is in English since it is a foreign firm operating there.

What are the implications of me sending CRA new information regarding my income in Vietnam? Will they view it as tax evasion when I didn't first report it? How should I explain it to them? I'm still not quite sure how to approach them. I sent in my papers in mid-may and still no response from them. When i check online it simply states "received" under 2006 and 2007.

Regards,

Acadianite

If you volunteer the info and explain you were just confused about the filing requirements, you will probably get a minimal penalty, I wouldn't worry about it too much. They're not going to discourage you too hard from paying your taxes.