Canadian employee working aboard

mmrjlai · Post by **mmrjlai** » Fri Oct 15, 2010 10:12 pm

hello there,
i know that this forum is actually for Canada/US issues, but i really hope that you can answer our question...
my husband's company is offering to move our family to China on an 'expat assignment' for 3 years, he will be working with their affiliated China company, however it states that he continue to be an employee of the Canadian company and he remains on the Cdn company payroll... can my husband still be able to claim 'non-resident for tax purposes' if he works in China but paid by Canada and continue to be an employee of the Canadian company?? would this be a deal breaker even if we are prepared to severed all residential ties in Canada... selling our house, cars, etc. etc...

please help
mm

nelsona · Post by **nelsona** » Sat Oct 16, 2010 8:29 am

Probably the fact that this was a temp assignment is the more important factor.

However, one could probably be considerded non-resident, if there were a treaty with China. the key would be if your wages would be taxable in China or not (I suspect not).

One thing to consider however is the overseas employment tax credit, which could wipe out most tax liability in canada anyways, without having to divest yourself entirely while you still remain residen of canada.

You need to ask the employer if his wages are going to taxable in China - and under what circumstances.

nelsona · Post by **nelsona** » Sat Oct 16, 2010 8:31 am

since the treaty talks of being taxable if present more than 183 days, my guess is that you will be taxable in china.

mmrjlai · Post by **mmrjlai** » Sat Oct 16, 2010 12:05 pm

thank you nelsona for your quick respond... very much appreciated :)

so looks like we are not able to claim non-resident and is taxable both in China and Canada, which country has the first right of withholding then?
should we pay China first then claim credits in Canada?
or Canada first then claim credit in China?

hope you can help

nelsona · Post by **nelsona** » Sat Oct 16, 2010 4:10 pm

As I said, if you are taxable in China, you are likely considered resident there, especially if you bring your family. Your familt moving makes adiffernce.

But, if you are working in China and living in canada, then the tax on your wages will be paid first to China and second to canada, with chinese tax being credited on your return, plus the ability to claim OETC.

I think you should be talking with HR at your firm for them to get you a tax consultation, ot talk to someone else in your firm that has gone thru this.