Posted on: 11-08-04 01:47:27
Hi, I have got my PR approved and will be landing in Canada two months for now (Nov-Dec). My company here in bangalore does not have an office in Canada but has a client in Montreal and has agreed to post me there. They will be paying me a salary in India and a USD stipend in Canada which will not be very substantial. I need to know how to manage my taxes. Also can I work for a company on PR status which does not have local presence in Canada and does not pay me salary in Canadian dollars ? Is it legal ? Also how do I pay for my health insurance in this case. Please do also let me know if I am missing out something here...Thanks a ton
Guys, its been almost two months since I posted this query, request you to reply to this. It will be greatly appreciated. Thanks
Well I don't know exactly how these things work, but will try and follow logic to see if there is an answer. Better, you look up a tax consultant here in Canada for a proper answer.
You have said that your company in India ha a client in Montreal and you will be set up to work for this client. That leads me to believe that you employer will be the company here in Montreal Canada and not the company in India. Is that correct? Does this arrangment imply that you will be working for 2 employers at the same time? As per Canada's tax rules, you are taxable on your worldwide income. So, if you are getting paid in INR in India, that amount would need to appear as income when filing your taxes here. However, since that income in India would have attracted tax in that country, you will be able to file for foreign tax credit on the income tax you file here. For more details and possible ways of saving taxes, please consult an expert in the field.
As a PR you can work for any legitimate employer here in Canada. I do not understand what you mean by saying that you will be working for a company in Canada that does not have a local presence in Canada? Who will be your employer? Will he not be registered in Canada as an employer? And if not, then I don't think you can work for him. As an employer employing someone in Canada, IMO he has certain obligations towards the government here.
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wisernow
I think wisernow has phrased it quite aptly.
You may seek exemption from your world income if you have earned money elsewhere and attracted tax on it and the Canadian Govt recognises it .
Manasvi
Quote:
Orginally posted by Manasvi
You may seek exemption from your world income if you have earned money elsewhere and attracted tax on it and the Canadian Govt recognises it .
Manasvi
Its not an exemption from taxes on world income, only double tax avoidance.
In my opinion, wisernow is not completely right.
What I understand from the situation (and coreect me if I am wrong) - the employer will continue to be in India and they will employ you in Canada with 2 streams of payment:
1. A regular salary in India in local currency.
2. a stipend in US$ terms in Canada (which MOST probably will be actually paid by the client in Canada as an advance payment towards their fee payable to your employer in India and deducted from their invoices).
If this be the situation - it is perfectly right. No rule prohibits you to be employed by a foreign company which does not have a presence in Canada, if you are a landed immigrant or citizen (in a work permit case, it is different).
You will be taxed in India on your rupee salary and that tax can be claimed on your tax return in Canada based on the double taxation treaty between Canada and India. You will have to show that income in India in your tax return in Canada.
For your stipend in Canada, most probably, you will be taxed in Canada - but there is a possibility where you can structure it to show that it is a reimbursement of your expenses (or atleast a large portion like transport/rental based on the fact that the employer in India is obliged to provide you with hotel accomodation and taxi fare SINCE he does not have an office/presence in Canada and so it is a deputation from India to Canada) - it is a fine line and you will need some advice how to be able to do it - it is theoratically entirely possible. If that be the case, your stipened in Canada will not attract tax.
I will think about your health insurance and if I find an answer, will post it here.
Chandresh
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Chandresh
Advice is free – lessons I charge for!!
skalra73,
Better clarify it , but I guess ur company will not pay ur salary for the time u r in canada. At least this is what happen in mine company. As Canada autorites always insist to have people thier on work permit even for short duration. The PER DM paid happen only in US case when going on B1 visa. In case going on H1 or L1 no salary is paid in india.
On added note, what exaxtly did u told ur program manager? How u manage this trip. It is good idea even I would like to so same thing . We have lot of clients in canada also. Please tell in breif the excuse that u gave.
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infocan
