Do I need to come to your office?
No, though you are welcome to: we have offices in India, the USA, Canada and the UAE. Documents move through a secure portal, and meetings can be in person or by video, arranged around your time zone. Clients in the Gulf, India, Europe and across North America all work with us the same way.
Does it matter which of your offices handles my file?
No. The same named reviewer signs off, the same authorisation is filed with the tax authorities, and the same fixed fee is agreed in writing before any work starts.
Why can I not claim every deduction on my European payslip in Canada?
Because a European payslip is not all income tax. A typical line-up mixes income tax withheld at source with pension, health, unemployment and long-term care contributions, and in some countries a regional or church levy on top. Only the amounts that are income taxes, or taxes in lieu of income tax, can support a Canadian foreign tax credit. Social contributions are a different system altogether, addressed by a social security agreement that decides which country you contribute to, not by the income tax credit. The first piece of work on an assignee file is usually translating the payslip line by line and deciding the character of each deduction before anything reaches the Canadian return.
Are European social security contributions creditable against my Canadian tax?
Generally not as a foreign tax credit, because they are contributions to a benefit scheme rather than taxes on income. Where Canada has a social security agreement with the country concerned, the agreement decides which system you belong to while on assignment, and a certificate of coverage issued under it exempts you from contributing in the other one. That is the relief, and it has to be obtained in advance, because unwinding contributions already deducted means a claim to a foreign agency rather than an adjustment on your return. Where no agreement exists, double contributions are a real cost and belong in the assignment budget rather than in a tax credit calculation.
I file something for my European flat every year, is that an income tax return?
Often it is not. Several European countries levy an annual charge on the ownership of property, assessed on a notional or cadastral value that has nothing to do with what the property earns, and payable whether it is let, empty or occupied by you. That charge is a property tax rather than an income tax, so it does not normally support a Canadian foreign tax credit, although it may be deductible against the rental income it relates to. A separate income tax return for the rent may also be due. Establishing which filing is which, in the local language, is the starting point on these files.
Do I have to tell Canada about a European property that makes no profit?
Reporting and taxing are separate questions. Canada asks residents to disclose specified foreign property once the cost of their holdings passes a reporting threshold, on form T1135, and that duty does not depend on whether the property produced income or a profit. A flat that sits empty or runs at a loss is still reportable. Separately, the rental result itself has to be recomputed under Canadian rules for the return, which frequently differs from the local figure because depreciation, interest and local charges are treated differently. A property can therefore show a loss in Canada and a taxable profit abroad in the same year.
My employer posted me to Europe on assignment, which country taxes my salary?
The employment article of the relevant treaty gives the country where the duties are performed the first right to tax, and local payroll usually starts withholding from the first month. If you stay resident in Canada, Canada taxes the same salary and gives credit for the foreign income tax. Where the assignment is tax equalised, your employer deducts a hypothetical home-country tax from your pay and settles the real foreign liability itself, which means the figures on your payslip are not your tax and cannot be copied onto a return. Reconciling the equalisation calculation to the actual filings is normally the largest part of the work.
Does a European wealth tax count as foreign tax for credit purposes?
A tax on the value of what you own is not a tax on income, so it does not usually qualify for the Canadian foreign tax credit, which relieves income and profits taxes. The same reasoning applies to local ownership charges and to transfer or registration duties on a purchase. Those amounts are not lost in every case, because some attach to an asset and enter its cost, and some are deductible against the income of the property they relate to. The character of each charge has to be established from the local assessment rather than from its English translation, which is frequently misleading.
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.
Do I have to file in both countries?
Frequently yes, and the two filings do different jobs. The country where the income arises taxes it at source; the country where you are resident taxes your worldwide income and then gives credit for the tax already paid. Filing only one side is what leaves relief unclaimed — the credit has to be asked for on a return. We prepare both sides so the numbers agree. See dual filing.
