Commuting to an office every day is a thing of the past. Fully remote work is becoming more common. With the freedom and benefits accessible to you when you’re working remotely from home, what’s not to love?
So, you’re set you up with remote access and now you’re sitting pretty (with no awful commute). You can work from home or from anywhere in the world! Anytime can be work hours, any place! You are on vacation, or on a business trip, you pop on your laptop and catch up on a bit of work in your “workspace”, it’s as simple as that. You have access to all the files and resources you need and can do anything you’d be able to do if you were in your office in a work environment that suits more and more people every year.
Remote computer access capabilities allow us to branch out beyond the borders of traditional office productivity with virtual office space and work time. Our workforce is more flexible, productive and responsive. But be wary of distractions! Employers can save money, attract top talent and work globally in a global marketplace. Studies have further demonstrated that teleworkers report a better, more flexible work-life balance and less stress.
As a remote employee working for a Canadian-based employer, you will still need to pay income taxes in Canada, even if you are not physically present in the country. This is because your income is considered Canadian-sourced income. To ensure you meet your tax obligations, you will need to do the following:
1. Determine your residency status
If you are leaving the country for an extended period, you will need to determine if you are still considered a resident of Canada for tax purposes. If you are, you will need to continue paying taxes in Canada on your worldwide income.
2. File your taxes
Even if you are not physically present in Canada, you will still need to file your taxes each year. You can do this online or mail.
3. Keep track of your expenses
If you are working remotely, you may be eligible for certain tax deductions, such as home office expenses. Keep track of these expenses and make sure to claim them on your tax return.
4. Consult with a tax professional
If you are unsure about your tax obligations, it is always best to consult with a tax professional to ensure you are meeting all of your obligations.
In summary, if you are leaving Canada but continuing to work for a Canadian-based employer, make sure you are aware of your tax obligations and take the necessary steps to ensure you are in compliance with Canadian tax laws. It is important to determine how the Canada Revenue Agency (CRA) views you for tax purposes. Specifically, you will need to determine your “residency status”. For a list of guidelines visit their website. Confused? The CRA can make the residency determination for you, fill out form NR73, snail mail to the CRA and voila, a short wait of at least two months will get you the answer.
It is also recommended to check with the local tax office of the country you are temporarily residing in. You may have tax obligations within the foreign country as well.