What do I file in Canada if I own a Dutch company?
More than the income the company pays you. A Canadian resident with an interest in a non-resident corporation generally has annual information reporting to make about that interest, and it is due whether or not the company distributed anything or even made a profit. Separately, the shares themselves can fall inside Canada's foreign property reporting, which is measured on cost rather than on income. Neither obligation depends on tax being payable, and both carry penalties of their own for being late. The Dutch side then has the entity's own filings, which are a different exercise on a different timetable.
Do I file a Dutch return if the expatriate facility applies?
Yes. A facility that reduces Dutch tax on part of your remuneration is applied through the Dutch system, which means there is a Dutch position to file and support, not an absence of one. For the Canadian return, the important output of that filing is the Dutch tax actually borne, because that is the figure a Canadian credit is computed on. The terms of the facility have changed over time, so your arrangement may not work the way a colleague's does. Establish which version applies, keep the approval with your tax papers, and give both to whoever prepares the Canadian return.
Which return reports my Dutch salary, the Canadian one or the Dutch one?
Both, if you are Canadian-resident. The Netherlands reports and taxes it as the country where the work was done. Canada reports the same income because Canada taxes residents on world income, and relieves the Dutch tax by credit. Reporting income in two places is not double taxation; the credit is what prevents that. Where people go wrong is reporting the net amount that reached the bank in Canada instead of the gross, which understates both the income and the credit, and leaves the Canadian return inconsistent with the Dutch filing. Report the gross, claim the credit, and keep the Dutch documents that evidence both.
Do I have to tell Canada about my Dutch bank and investment accounts?
Once the cost of your foreign holdings crosses the reporting threshold, yes, and the test is what those holdings cost rather than what they earned, so a dormant account can still be reportable. Dutch bank balances, securities held through a Dutch institution and property in the Netherlands are the usual items. Shares in a Dutch company you control are dealt with under the separate reporting for interests in non-resident corporations. The item most often missed is a Dutch pension or annuity arrangement, because whether it sits inside or outside the reporting depends on what the arrangement actually is.
My Dutch entity has no employees there — what do we file?
The filing question and the entitlement question are different, and the second usually decides the first. An entity with no people and no premises in the Netherlands may still be obliged to file there, but its ability to claim treaty benefits, and the risk that another country treats it as managed from elsewhere, both turn on substance. So the order of work is to establish where the entity is actually managed and what it does, then determine what it files, in which countries, and what the Canadian group reports about it. Filing first and reasoning afterwards is how inconsistent positions get created.
What do I file in the year I move from the Netherlands to Canada?
A part-year Canadian return: world income from the date Canadian residence began, and Canadian-source income for the part of the year before that. The Dutch side has its own departure position for the same year. Two items want settling before the Canadian return is prepared. Assets you bring with you are generally taken into Canada at their value on arrival, so that value has to be established and recorded rather than reconstructed years later when something is sold. And the reporting obligations start with the first year of residence, which is also when a Dutch pension or corporate interest needs characterising.
Which country do I pay tax to first?
Generally the source country — where the income arises — taxes first, often by withholding before you receive it. Your country of residence then taxes the same income and credits what the source country took. That order is why timing matters: a residence-country return filed before the source-country tax is settled has nothing to credit yet. Getting the sequence right is most of the work. See international tax planning.
How do you avoid double taxation?
You claim relief once, in the right country, in the right order. Usually the source country taxes first, the residence country then gives a credit for that tax against its own charge on the same income, and a treaty caps the source-country rate. Getting the order wrong is what produces a double charge you then have to unwind. The mechanism differs by income type, which is why we map the whole position before filing either return. See how to avoid double taxation.
