nr tax clarification in departure year

danny · Post by **danny** » Mon Dec 20, 2004 4:23 pm

hi

i just had a question to clarify departure year NR taxes. What i have is quite confusing.

when i filed my departure return the bank issued T5's for my term deposits. i think the bank made a mistake and should have issued both T5 and NR4 for each term. This is because i left in June and so from jan to june it would be T5 and from june to Dec it would be an NR4 (for the same account)

anyway T5 were filed and i got an assessment saying no money was owed for that departure year. however i feel some NR tax is probably owed for the few months i was not in Canada. Right ?

i am a bit confused about the departure 'mixed' year return in terms of paying NR tax on the interest. The following years are clear i pay NR tax automatically deducted by my bank based on tax treaty.

Wondering what i should do for the departure year. T5s have been filed as i said. thanks

nelsona · Post by **nelsona** » Mon Dec 20, 2004 5:05 pm

Usually and investment firm only issues one tax recepit. In a departure year, it should be an NR form, even if only one month of the tax was NR.

Your firm did the reverse, but this is no big deal: You are still responsible for correcting any mistakes that your firm mande.

Just figure out what was income before the move and include this on your return.

Then determine what income was earned after the departure, and figure out what tax should have been sent, and simply send it yourself, with an explanitory letter. Do not include post-departure income that is subject to flat NR tax on your departure return.

<i>nelsona non grata</i>

danny · Post by **danny** » Mon Dec 20, 2004 5:24 pm

thanks

its funny my accountant seems to say that in a departure year no need for NR 4 as all filings are done ie T5

i need to send a check to the authorities for the income after departure except of course for the ones that already have NR flat tax deducted

nelsona · Post by **nelsona** » Mon Dec 20, 2004 10:24 pm

Yup.

Remember to pay only the rate for the country in which you live (presuming Canada has a treaty with it).

Some income mey even be exempt for NR tax by treaty.

Otherwise it's 25%.

<i>nelsona non grata</i>