What do I file in Canada if Saudi Arabia asks me for no return?
The Canadian obligation stands on its own. If you were resident here, the return reports the contract income in Canadian dollars whether or not any filing was required on the other side, and a credit is claimed only for income tax actually charged on you there. The absence of a foreign return is not an obstacle to filing; it simply means the income has to be evidenced from the contract, the payslips, the employer's annual statement and the bank records instead of from an assessment. Say in the file which documents the figures came from. That note is what makes the return explainable years later.
How does the Canadian tax get paid if nothing was withheld from my salary?
Directly, by you, on the Canadian timetable, and that is a cash-flow problem rather than a tax problem, because the money has usually been spent by the time the return is prepared. Where no Canadian tax is withheld at source, the liability arrives as a balance owing, and a pattern of balances owing can bring a requirement to pay by instalments during the year rather than after it. Contract staff on this corridor are the classic case. Work out the expected Canadian charge at the start of the contract and set the money aside as the salary is received.
Do I report my end-of-service payment from a Saudi employer?
Assume it has to be dealt with, and settle how before the return goes in. A settlement paid at the end of a contract can include several different things: pay for the final period, accrued entitlements, a gratuity for length of service, reimbursements. They do not all have the same character. The questions are what each component is for, which year it belongs to, and whether your Canadian residence had resumed or ended by the time it was paid. Get the employer's breakdown rather than the single net transfer, because a lump sum with no explanation attached is the hardest item in the file to defend.
Do I have to tell the CRA about my Saudi bank account and apartment?
Canada asks its residents about property held outside the country, and the question attaches to the holding rather than to any income it produced. So a deposit account holding contract savings is squarely within it, and so are securities and interests in businesses. Property you live in has its own treatment, so describe the use of the apartment accurately rather than guessing. Get balances and values from the institution or from documentation rather than estimating, collect them at the same points each year, and do the exercise for the first year you are reporting rather than after several have passed.
Does my Saudi income affect my spouse's Canadian return?
Very likely, and it is a part of these files that gets overlooked while attention is on the contract income. Amounts that depend on household income, including credits transferred between spouses and entitlements calculated from what the household reported, are worked out from the figures on the returns actually filed. A household that filed as though the Saudi income did not exist will have those calculations wrong, and the correction can reach back over several years. Prepare both returns from one set of facts, in the same sitting, and treat the household as the unit of work rather than the individual.
Which documents should I bring my accountant for a Saudi contract year?
The employment contract and any assignment letter, because they show what was agreed and where duties were to be performed. Every payslip, plus the employer's annual statement. A payroll explanation of what each deduction represents, since only income tax charged on you supports a credit. The end-of-contract settlement broken into its components. Bank statements for the accounts the salary passed through, with year-end and peak balances for the reporting side. Flight records and the rotation schedule, which are the evidence in any residence question. And the previous Canadian return, so the years join up rather than each being prepared from scratch.
How do families with assets in two countries handle inheritance?
With paperwork built for both systems rather than one. In practice that means wills that work where each asset actually sits, an executor with authority a foreign bank or land registry will accept, clearance certificates before the estate distributes so the executor is not left personally exposed, and an estate tax exposure calculation done while the person is alive and can still act on it. Doing it afterwards costs more and forecloses most of the options. See cross-border wills and trusts.
How much foreign income is tax-free in Canada?
None of it is tax-free for being foreign. A Canadian resident is taxed on worldwide income, so foreign salary, interest, dividends, rent and gains all go on the return, converted to Canadian dollars. What genuinely reduces the bill is the basic personal amount, the credit for foreign tax already paid, and any treaty article that exempts a specific type of income. The reporting thresholds people have in mind — the foreign property statement, for one — govern reporting, not exemption. See the foreign tax credit.
