OETC - Overseas Employment Tax Credit

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
molloy
Posts: 3
Joined: Sat Apr 09, 2011 9:27 am
Location: Canada

OETC - Overseas Employment Tax Credit

Post by molloy »

I've been working in India and Brazil for the past 4 years getting paid through Houston in USD. Up until recently I believed I was getting paid by the USA division of the company. But, on my pay checks it states that the Canadian division of the company has been paying me. It also states this on the taxes filed and salary slips. Even though I'm paid in USD can I apply for the OETC?
nelsona
Posts: 18680
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Yes, the currency you were paid in does not matter.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
molloy
Posts: 3
Joined: Sat Apr 09, 2011 9:27 am
Location: Canada

Post by molloy »

Thanks for the reply! That is great, now I will have to get someone to fill out the OETC form from the Canadian division. It could be difficult as I didn't believe I had any ties to Canada. All I know is the company on my indian tax return main base is in Alberta. I appreciate the help!
molloy
Posts: 3
Joined: Sat Apr 09, 2011 9:27 am
Location: Canada

Post by molloy »

I am trying to go about getting the OETC the correct way. I have the T626 document, is it alright if the Office in India fills out Part 1 in the T626 or does it have to be the Canadian office? Also, is there anything else to getting approved for OETC once this is filled out? Do they need to apply to the government using other means? Thanks
JGCA
Posts: 754
Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA »

To qualify for teh OETC you must meet some tests basically you have to be a resident or deemed resident of Canada and the emplyment you carried out for your employer must meet certainrequirements which your employer has to certify, it would not matter which office branch fills in the form as long as it is certified to meet the specific criteria and teh person ia authorized to sign off on behalf of teh company.
JG
bbell26
Posts: 3
Joined: Wed Jan 04, 2012 9:51 am

Post by bbell26 »

hello I work for a canadian company. I have been working all over the world. This year i was out of the country for 98 days and on Medical leave for 181 days. I also get paid 2 days pay for 1 day at work since i am pay while i am home. So I was wondering if i will still qualify for the overseas tax credit.
nelsona
Posts: 18680
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

No. you were not working for a six month period outside Canada.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
bbell26
Posts: 3
Joined: Wed Jan 04, 2012 9:51 am

Post by bbell26 »

I have received the tax credit many times before because with only 85 days out of the country because of getting paid 2 days pay for every one day out of the country.
nelsona
Posts: 18680
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

For EOTC you need to be performing work outside the country for a continuous six month period. Now within that period you can be back in canada for limited contact with your employer, without breaking the continuity.

It is not the number of days that you work, but the period of time you are continuously out of country.

So, did you leave canada for 6 months continuously or not?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
bbell26
Posts: 3
Joined: Wed Jan 04, 2012 9:51 am

Post by bbell26 »

well i work on a 5 week on and 5 week off rotation so that means i am home in canada every 5 weeks. and i have always received the tax break.
nelsona
Posts: 18680
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

As long as during the 5 weeks off, you are not working, then your continuity is not broken.

However, this year you were on sick leave. This may impact how your time is counted.

But tellme, If it has always been granted by theemployer and CRA, wh yare you asking here?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Post Reply