Do I have to file at home while living in Kuwait?
It depends on residence, not on address — except for US citizens and green-card holders, for whom the answer is yes regardless of where they live. We settle the residence question first, because every other answer follows from it.
Is there a treaty between my country and Kuwait?
Possibly, and the version in force for your year is the one that matters — protocols and multilateral-instrument positions change what a treaty does without changing its name. We check it against the authority rather than a summary. Where no treaty applies, domestic relief takes over.
I own property in Kuwait. Where is the rent taxed?
Where the property is. That is close to universal, and it usually arrives as withholding on the gross rent rather than as a return on the profit — which is why the election onto a net basis, where Kuwait offers one, is normally the first thing to check. Your home country taxes the same rent and credits what was paid.
Why does it matter which country my salary is paid from?
Because the country of payment and the country of work are separate questions, and Gulf contracts often split them. Pay routed through an entity in a third jurisdiction can create obligations there, can change which entity is treated as your employer, and can decide whether any treaty article is available to you at all. It also affects the evidence you will need later, since a credit claim at home needs proof of tax imposed on you somewhere, and where nothing was withheld anywhere there is nothing to claim. We identify the paying entity, the contracting entity and the entity directing the work before advising on residence or credits.
Is there income tax on my salary in Kuwait?
Local charges on employment income in the Gulf are limited, and that is precisely why the home-country question dominates the file. If Canada or the United States still treats you as resident, your salary is reportable there, and because little or nothing was withheld locally there is little or nothing to credit. The result is a full home charge on income that arrived untaxed, which becomes a cash-flow problem if nobody planned for it. Americans face this regardless of residence, since citizenship carries the filing obligation. The planning, such as it is, happens before departure rather than when the return is prepared.
Have I stopped being a Canadian resident by moving to Kuwait?
Only if the facts say so. The test looks at ties rather than intentions: where your home is, where your spouse and dependants live, what you kept available to yourself, and how you behaved after the move. A single posting with the house left empty and the family at home rarely produces non-residence. A genuine relocation, with the household moved, the property let commercially and local accommodation taken, generally does. Because there is little local tax to fall back on, the residence conclusion decides most of your bill. That is a good reason to document it properly before the first return rather than afterwards.
Do I need to report my Kuwaiti bank accounts?
Almost certainly, and the report is separate from the tax return. Americans file the FBAR for accounts held outside the United States once the rules are met, in years with tax due and in years without. Canadians have a foreign property regime that can take in accounts and other holdings abroad. Neither depends on the income being taxable, because an account holding untaxed Gulf salary is still an account. Penalties here are for failing to report rather than for failing to pay, which makes them particularly unwelcome on income that carried no tax in the first place. Deal with them yearly.
Can I claim the foreign earned income exclusion from Kuwait?
It is the relief most Americans in the Gulf rely on, because with little local tax there is rarely a credit worth claiming. It turns on your presence abroad and on the income being earned from work performed outside the United States, which brings the day counting and the employer identification back to the front of the file. Allowances and benefits have to be characterised properly rather than lumped in with salary, and housing provided by an employer is treated on its own terms. The exclusion is claimed on the return and is not automatic, so a year not filed is a year the relief was not taken.
What should I keep from an oil and gas contract?
The signed contract and every variation, the secondment or assignment letter, the payslips as issued with the currency shown, evidence of which entity actually paid, any withholding certificate however small, entry and exit records, and the accommodation or camp arrangements. If the contract runs through a manpower or service company, keep that agreement too, because the chain between it and the operator is what establishes who your employer is. These papers cost nothing to save while you are on assignment and are close to unobtainable once the contract ends and the project team disperses.
Does foreign employment income create RRSP room?
Only where it is earned income reported on a Canadian return. RRSP room is built from earned income that Canada sees, so a non-resident year of foreign salary generally builds none, and foreign tax paid does not create room of its own. This is why people returning to Canada after years abroad find their contribution room much smaller than the years elapsed suggest, and why the notice of assessment is the only reliable statement of it. See returning to Canada after years abroad.
Where does the exclusion go on the return, and does it change my rate?
It is computed on Form 2555 and carried to the return as a negative adjustment to income, so the excluded amount is out of taxable income. It does not, however, pretend you never earned it: the tax on whatever income remains is calculated as though the excluded amount were still there, so the remaining income is taxed at the rates that apply above it. Deductions and credits attributable to excluded income are also disallowed. See the foreign earned income exclusion.
