to double tax or not to double tax

FJB · Post by **FJB** » Fri Apr 22, 2011 1:08 pm

I recently moved back to Canada after being abroad for the last 3 years. Before I left, I notified the CRA that I was leaving. However, I was still deemed a 'factual resident'. Since working abroad, I neglected to file my taxes (thinking that being away would automatically make me a non-resident, which now I've learned is not the case). Now I need to catch up on all the years that I've missed filing. So here are some questions:
1) Should I backfile from the year that I was away or should I file this year's return first? What's the best way to go about it?
2) For 2010, I was in Canada for less than 183 days. Any idea what my status would be?
3) It seems that there is no tax treaty with the country of where I lived the last few years. What are the chances of being double taxed?
4) How does a foreign tax credit work?

Hope to hear from you soon!
thanks

JGCA · Post by **JGCA** » Fri Apr 22, 2011 6:44 pm

File this year first to be ontime to avoid penalty for late filing, then file teh arrears since they are late already only interest will accrue mainly on anmy amount owed.

It does not matter if there is a treaty or not you are filing in Canada on the total Income earned outside of Canada and you can still claim a tax credit for tax paid elsewhere so the double tax effect if any will be mitigated as much as possible

nelsona · Post by **nelsona** » Sat Apr 23, 2011 2:44 pm

The only problem that would arisee is if you went to a country which has no tax trwaty and no (or very low) income tax, in which case be preaperd to sever bot your arm and leg to pay the back taxes.

Sinc you went thru the trouble of having CRA find that you wer factual resident (this on the hook to report world income), you should have continued filing.

Expect the worst.