Tax question about working in Australia

[GravityOrange]

I will be moving to Melbourne on a 457 Visa and just had some questions with regards to Taxation, hopefully someone whos gone through it can help answer me. Has anyone applied for the overseas employment tax credit on here? and if so, how do you claim it? I am also looking for a good Tax man here in Edmonton or at least somewhere on the west coast of Canada that know about how to write stuff off and set up my taxes for working overseas.I think someone dropped a name on a previous post, but I can't find it. Thanks guys

[G'bye Rain]

I don't know about overseas employment tax credits, but have been told that if you are in Oz for a temporary stay (you haven't been accepted for permanent residence) that the CRA doesn't look at your earnings there and the Ozzie tax people don't look at your earnings in Canada if you have been declared a non-resident of Canada.

You need to look at the CRA website - search cra and expat and it will lead you to the NR-73 form. Submit this form and they'll tell you if you would be considered a non-resident. It's pretty tricky depending on if you own real estate here or if your partner isn't moving with you. You can also call the CRA help line at 1-800-959-8281.

If you go the non-resident route you need to notify all of your financial institutions of the date you become a non-resident (generally your flight date)because they will have to withhold taxes on your interest, dividends, ect. so you will not have to file returns for the tax years you are in Oz. The first year you leave, you will have to file returns in both Oz and Canada.

We're lucky, the company sponsoring us is paying for PriceWaterhouseCoopers to do our taxes the year we leave, so I don't know how much they charge but they have been very informative. Don't forget, you can call the CRA and they will explain things to you if you know the right questions to ask. There's also a whole bunch of stuff you'll need to know if you have mutual funds and/or stocks because their value will have to be assessed for your departure date for capital gains, but I really don't know that stuff.

[GravityOrange]

Well there I have the form about the LAHA (Living Away from home allowance) and basically you don't have to pay 80% of the normal tax up to 100,000 which is a pretty good deal. I can't apply for non-residency because I own a house here, but if I didn't I wouldn't be able to apply for the LAHA anyways, so it is a good thing. I called CRA last week and to be honest they weren't very helpful, they knew very little about what I should do. I will call PWC and see what they can help me with tax wise. Thanks again 4 your help

[Ja&Ka]

I've figured it out.I think.
Go onto the revenue canada website (can't give address) and you'll eventually find a treaty that was signed between canada and australia for the prevention of double taxation. You'll see in paragraph 2 of article 14 it makes reference to canadians working in Oz.

Read carefully.maybe as a bedtime story and you'll see you're ok.

GL

[ohanna]

Hi GravityOrange, just wonder if you got your questions figured out? I just came across this posting and have similar questions.

I read about the "deemed non-resident" term on the cra site. Does it mean that as long as I am a resident of Australia for income tax purpose I can assume that I am a deemed non-resident of Canada even though I have a home here that I leave empty (I am not able to sell it/rent it out).

According to the Can/Aus tax treaty, one's income will be taxed where it is incurred. I've talked to a few people who work in countries that have tax treaties with Canada and they have to pay Canadian tax on their income after they've paid tax in the countries where they work. Is that true?

Thanks a lot.