I work abroad for a Canadian employer, which country do I file in?
Two filings are common rather than one, and which is which depends on three separate questions. Residence decides whose worldwide income you report. The place the work is physically performed decides which country has the first claim on the employment income under most treaties, and that is where you are sitting, not where the employer is incorporated. The third question belongs to your employer rather than to you. If you keep Canadian residence while working in another country, you generally file in Canada on worldwide income and in the other country on the income sourced there, with relief for the foreign tax. If residence has shifted, the two swap round. Settle residence before completing anything.
Do I still file a Canadian return if I left part way through the year?
Almost certainly, and the year of departure is an exercise of its own. Leaving does not by itself end a country's claim on you. Residence turns on the ties you keep, including a home available to you, family who remain and the wider pattern of your life, so a departure leaving most of them in place may not have changed your residence at all. Where it has, the year splits: resident for part of it, reporting worldwide income for that part, then non-resident for the remainder on Canadian-source income only. Departure also carries consequences for what you own on the day you go. Establish the date and the ties on evidence, because the whole filing hangs off them.
Can working abroad create a tax filing for my employer?
It can, and this is the question that turns a personal arrangement into a corporate one. Where you sit and work may give your employer a taxable presence in that country, particularly if you conclude contracts there, hold yourself out as its representative, or the arrangement has enough permanence to resemble a fixed place of business. The consequences land on the company: a corporate filing in a country it never chose to enter, local payroll registration, and a question about what the activity performed there actually earns. Your own return is the small part of it. If nobody has examined the employer's position, that is the first thing to put on the table.
Does my employer keep deducting Canadian payroll tax while I am overseas?
Frequently it does, and the result is often wrong in both directions at once. Payroll systems deduct according to where the employee appears to be on the records, so an employer still holding a Canadian address keeps applying Canadian source deductions while the country you are actually working in acquires its own claim on the same salary. Tax is then withheld in one place and owed in another, recovered by filing rather than corrected at source. Mechanisms exist to reduce or waive withholding where a treaty places the income elsewhere, but they have to be applied for in advance. Tell your employer where the work is performed and get both positions aligned in writing.
I paid tax in both countries on the same salary, what do I file?
You file in both and claim relief in one, and the treaty rather than your preference decides which. The country with the residual claim gives credit for tax properly payable to the country with the first claim, so the first task is establishing which is which on your facts: residence, then the place the work was actually performed. The common failure is relief claimed for tax that was never properly due, because withholding was left running in a country whose claim the treaty had displaced. That is recovered from the country that took it, not credited by the other. Keep the payroll records, a record of days worked in each country, and both assessments.
Does a short work trip abroad need any filing at all?
Possibly nothing and possibly a great deal, and the trigger is rarely the length of the trip by itself. Most treaties relieve short employment stays where the pay is not borne by an employer or a fixed place of business in that country, which is why the same fortnight can be harmless for one worker and create a filing for another. Local payroll registration and immigration conditions run on their own rules and do not always follow the treaty. Repeated short stays also accumulate into presence. Before a trip becomes a pattern, get the days recorded and the employer's position examined, because the inexpensive version of this work happens well before a filing deadline.
Does a foreign-owned US entity need an EIN?
Yes, for almost anything it must do: file its returns, operate payroll, open a bank account, and act as a withholding agent on payments abroad. It is applied for on Form SS-4, and the part that stalls foreign owners is the responsible party — a real person with a US identification number is expected, and where none exists the application route and the supporting explanation both change. It is worth starting early because downstream registrations queue behind it. See EIN applications.
Is foreign pension income taxable in Canada?
Yes. A Canadian resident reports foreign pension income in Canadian dollars like any other income, and foreign tax withheld on it becomes a credit rather than a reduction of the amount reported. Where a treaty exempts part or all of it — some social security pensions are treated this way — the relief is claimed as a deduction on the return, not by leaving the pension off. Omitting it and claiming it was exempt are two very different filing positions. See the pensions and annuities article.
