Canadian Expat Pilots in China please PM Me!

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CYXDSTUD
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Canadian Expat Pilots in China please PM Me!

Post by CYXDSTUD »

Hi folks,

I just landed a contract in China and want to touch base with some Canadian expats working over there. My main concern is being fully prepared with all my T's crossed with Revenue Canada so that I get to keep all of that juicy tax free money. I am selling all property, the wife is coming with me and I have no issue cancelling my healthcare and club memberships but I have heard that closing Canadian bank accounts, credit cards, and cancelling drivers licenses may be required in order to be deemed a non resident. Anyone with any experience in this please PM me and let me know all you had to do. I will still see a tax consultant. If you have any referrals that would be great.

Take care.
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CYXDSTUD
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Post by CYXDSTUD »

Sorry I guess I should say not be double taxed as I will be paying tax in China.
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esp803

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Post by esp803 »

http://www.filedropper.com/flyingupsidedown

second download link (it will ask you for a captcha thing), Give it a read, it's a very non PC account of flying as an expat captain in China.

E

Edited to add: Hire a tax lawyer, it'll be a couple hundred an hour, but will be worth much more than that in the long run... I had one lined up when I was working over seas in Vancouver, but for the life of me can't remember the name. Just find one who specializes in international tax law, and then get an accountant. at 20k a month it will be pocket change for both ;)
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RB211
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Post by RB211 »

CYXDSTUD wrote:Sorry I guess I should say not be double taxed as I will be paying tax in China.
You should talk to a tax lawyer/accountant specifically regarding the Canada-China Tax Treaty article 15.

You may not have to dissolve your resident status.

Congrats on the contract, by the way. What airline/ aircraft if you don't mind saying?
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CYXDSTUD
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Post by CYXDSTUD »

Xiamen Air flying the 37NG. Thanks I am aware of Article 15 and will definitely get some clarification on that. Finding the right tax lawyer could be an issue in Edmonton for this issue but I'll sniff around.
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tbaylx
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Post by tbaylx »

Once you have all your details fill out form NR73 and submit it to the CRA to have a determination made on non residency. You can read lots more information in publication T4058.

You can keep a Canadian bank account, TFSA (though no more contributions while non res), credit card etc and still be a non resident. You will have to cancel health care and driver's license etc. Have fun getting it back when you return to Canada if it's longer than 5 years :) You can even keep property here as long as its rented to a non relative and you declare the rental income in Canada and pay tax on it. You may be affected if you're taking a leave and have a guaranteed job on your return to Canada, in that case they may deem you a resident depending on your other ties. They look at everything as a whole, and each tie you have linking you with Canada affects the determination. So you may be okay with a leave if you have no other ties, but perhaps adding a rental property into the mix may be enough to make you a resident. It's all determined on a case by case basis.

Any income earned in Canada must be declared and you'll pay tax, anything earned outside of Canada and you'll not be taxed if you're deemed a non resident. The tax treaty with China will only matter if you're still a resident of Canada and then you'll get credit in Canada for tax paid in China.

It's not complicated and unless you have significant assets and a complicated situation there is no need for a tax lawyer. Fill out form NR73 and submit it to CRA, get your letter back with a determination of residency and proceed accordingly.
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Last edited by tbaylx on Mon Aug 10, 2015 8:27 am, edited 1 time in total.

tbaylx
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Re: Canadian Expat Pilots in China please PM Me!

Post by tbaylx »

http://www.cra-arc.gc.ca/tx/tchncl/ncmt ... 1-eng.html

Factual residence – leaving Canada

Residential ties in Canada

1.10 The most important factor to be considered in determining whether an individual leaving Canada remains resident in Canada for tax purposes is whether the individual maintains residential ties with Canada while abroad. While the residence status of an individual can only be determined on a case by case basis after taking into consideration all of the relevant facts, generally, unless an individual severs all significant residential ties with Canada upon leaving Canada, the individual will continue to be a factual resident of Canada and subject to Canadian tax on his or her worldwide income.

Significant residential ties

1.11 The residential ties of an individual that will almost always be significant residential ties for the purpose of determining residence status are the individual's:
•dwelling place (or places);
•spouse or common-law partner; and
•dependants.

1.12 Where an individual who leaves Canada keeps a dwelling place in Canada (whether owned or leased), available for his or her occupation, that dwelling place will be considered to be a significant residential tie with Canada during the individual's stay abroad. However, if an individual leases a dwelling place located in Canada to a third party on arm's-length terms and conditions, the CRA will take into account all of the circumstances of the situation (including the relationship between the individual and the third party, the real estate market at the time of the individual's departure from Canada, and the purpose of the stay abroad), and may consider the dwelling place not to be a significant residential tie with Canada except when taken together with other residential ties (see ¶1.26 for an example of this situation and see ¶1.15 for a discussion of the significance of secondary residential ties).

1.13 If an individual who is married or cohabiting with a common-law partner leaves Canada, but his or her spouse or common-law partner remains in Canada, then that spouse or common-law partner will usually be a significant residential tie with Canada during the individual's absence from Canada. Similarly, if an individual with dependants leaves Canada, but his or her dependants remain behind, then those dependants will usually be considered to be a significant residential tie with Canada while the individual is abroad. Where an individual was living separate and apart from his or her spouse or common-law partner prior to leaving Canada, by reason of a breakdown of their marriage or common-law partnership, that spouse or common-law partner will not be considered to be a significant tie with Canada.

Secondary residential ties

1.14 Generally, secondary residential ties must be looked at collectively in order to evaluate the significance of any one such tie. For this reason, it would be unusual for a single secondary residential tie with Canada to be sufficient on its own to lead to a determination that an individual is factually resident in Canada while abroad. Secondary residential ties that will be taken into account in determining the residence status of an individual while outside Canada are:
•personal property in Canada (such as furniture, clothing, automobiles, and recreational vehicles);
•social ties with Canada (such as memberships in Canadian recreational or religious organizations);
•economic ties with Canada (such as employment with a Canadian employer and active involvement in a Canadian business, and Canadian bank accounts, retirement savings plans, credit cards, and securities accounts);
•landed immigrant status or appropriate work permits in Canada;
•hospitalization and medical insurance coverage from a province or territory of Canada;
•a driver's license from a province or territory of Canada;
•a vehicle registered in a province or territory of Canada;
•a seasonal dwelling place in Canada or a leased dwelling place referred to in ¶1.12;
•a Canadian passport; and
•memberships in Canadian unions or professional organizations.

Other residential ties

1.15 Other residential ties that the Courts have considered in determining the residence status of an individual while outside Canada, and which may be taken into account by the CRA, include the retention of a Canadian mailing address, post office box, or safety deposit box, personal stationery (including business cards) showing a Canadian address, telephone listings in Canada, and local (Canadian) newspaper and magazine subscriptions. These residential ties are generally of limited importance except when taken together with other residential ties, or with other factors such as those described in ¶1.16.

Application of term ordinarily resident

1.16 Where an individual has not severed all of his or her residential ties with Canada, but is physically absent from Canada for a considerable period of time (that is, for a period of time extending over several months or years), the Courts have generally focused on the term ordinarily resident in determining the individual's residence status while abroad. The strong trend in decisions of the Courts on this issue is to regard temporary absence from Canada, even on an extended basis, as insufficient to avoid Canadian residence for tax purposes. Accordingly, where an individual maintains residential ties with Canada while abroad, the following factors will be taken into account in evaluating the significance of those ties:
•evidence of intention to permanently sever residential ties with Canada;
•regularity and length of visits to Canada; and
•residential ties outside Canada.

For greater certainty, the CRA does not consider that intention to return to Canada, in and of itself and in the absence of any residential ties, is a factor whose presence is sufficient to lead to a determination that an individual is resident in Canada while abroad.

Evidence of intention to permanently sever residential ties

1.17 Whether an individual intended to permanently sever residential ties with Canada at the time of his or her departure from Canada is a question of fact to be determined with regard to all of the circumstances of each case. Although length of stay abroad is one factor to be considered in making this determination (that is, as evidence of the individual's intentions upon leaving Canada), the Courts have indicated that there is no particular length of stay abroad that necessarily results in an individual becoming a non-resident. Generally, if there is evidence that an individual's return to Canada was foreseen at the time of his or her departure, the CRA will attach more significance to the individual's remaining residential ties with Canada (see ¶1.11 – 1.15), in determining whether the individual continued to be a factual resident of Canada subsequent to his or her departure. For example, where, at the time of an individual's departure from Canada, there exists a contract for employment in Canada if and when the individual returns to Canada, the CRA will consider this to be evidence that the individual's return to Canada was foreseen at the time of departure. However, the CRA would have to review each individual's situation on a case-by-case basis to determine whether the individual's remaining residential ties with Canada, including the contract of employment, are sufficient to conclude that the individual continues to be resident in Canada.
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co-joe
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Re: Canadian Expat Pilots in China please PM Me!

Post by co-joe »

Just heard a weird story last night about an experience in China. When they ask for feedback about their operation, SOP's, crew training, etc, blow sunshine. They are not looking for the truth, but rather giving you an opportunity to hang yourself. At least according to a friend of a friend...

Hey, have fun.
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tbaylx
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Post by tbaylx »

co-joe wrote:Just heard a weird story last night about an experience in China. When they ask for feedback about their operation, SOP's, crew training, etc, blow sunshine. They are not looking for the truth, but rather giving you an opportunity to hang yourself. At least according to a friend of a friend...

Hey, have fun.
True story, smile and nod and collect pay.
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ahramin
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Post by ahramin »

Co-joe, download the .pdf linked above. Keep in mind that it's written from the perspective of a typical 'merican, but the stories in it will give you a good flavour for what's going on over there. Sadly much of the management stuff reminds me of what often happens over here. In my opinion the key point to take away is not the operational difficulties, but the rampant contract violations. The Emirates sound like an ethical paradise in comparison.
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co-joe
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Post by co-joe »

Goodness! 300 pages? My book report might take a while. When is it due ahramin?
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ahramin
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Post by ahramin »

Good point. Didn't think that one through.

I downloaded it this morning and I'm on page 272. Can't stop reading.
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ditar
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Post by ditar »

Just wire all of your money to me in trust. I will keep it safe from the government's greedy hands.
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Mr. North
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Post by Mr. North »

So is there not any benefit to maintaining residency while pursuing a career abroad? Could you not pay the tax, but also purchase and maintain properties back home. And when the adventure is over return to Canada and all it's benefits with relative ease?

People value different things in life and I myself value living here in Canada. That being said I would be interested in pursuing a career abroad, but I wouldn't want the resulting financial decisions to prevent me from returning home when all is said and done. I know being an expat has it's issues, but financially speaking, is it worth it? Once your declared a non-resident, how hard is it to come back or better yet, how much does it cost?!
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ahramin
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Post by ahramin »

Mr North, you're still a citizen. All you do is get on a plane and come back.
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tbaylx
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Post by tbaylx »

Mr. North wrote:So is there not any benefit to maintaining residency while pursuing a career abroad? Could you not pay the tax, but also purchase and maintain properties back home. And when the adventure is over return to Canada and all it's benefits with relative ease?

People value different things in life and I myself value living here in Canada. That being said I would be interested in pursuing a career abroad, but I wouldn't want the resulting financial decisions to prevent me from returning home when all is said and done. I know being an expat has it's issues, but financially speaking, is it worth it? Once your declared a non-resident, how hard is it to come back or better yet, how much does it cost?!
Its not the coming back from a residency point of view that's the problem. To reestablish Canadian residency you simply move back home and get a Canadian address. Depending on the province you won't have health care for the first 6 months or so, you'll have to maintain private insurance until then. If you've been gone for more than 5 years you'll have to redo your drivers license tests and exams to get a Canadian license. You may have to renew your Canadian ATPL as well if you've not kept it current. It a pain but not a huge deal and costs are minimal.

The real issue is when you come back all your flying experience will count for nothing and you'll start at the bottom of a seniority list somewhere at $45000/year with all the other wet behind the ears 2500 hour king air guys. That's the main issue and that's what's keeping many of the expat Canadians from returning home to fly. They can't afford it.
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co-joe
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Post by co-joe »

ahhh the golden handcuffs eh?

I'm a third of the way in. Tainted with bitterness and obvious personal vendettas and clashes...eye opening none the less so far.
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ahramin
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Post by ahramin »

Hereby Notified! Like you say, a lot of sour grapes and hypocrisy. When we don't follow the SOP, it's because we know better but when they don't follow the SOP it's because they're ignorant peasants. I just can't get over how well certain airline managers in this country would instantly fit into that environment.
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esp803

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Post by esp803 »

I would take that pdf with a grain of salt, however when I was flying just south of China a lot of it is alarmingly close to reality... Truth be told I read it in a couple days giggling like a school girl.

E
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CYXDSTUD
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Post by CYXDSTUD »

I guess my main concern is seeing a professional to make sure that the Canadian government doesn't touch any of my earnings while over there. I am aware of the NR73 form for determining non resident status but I also hear from some expats not to fill out this form before you leave. But I assume the proper procedure is to submit this NR73 form and file one last departure tax return then hope the CRA determines you have non resident status while working abroad. The one issue with me is that I will be on a 5 year leave from my current company so in the eyes of the CRA I may not have completely severed my resident ties with Canada. Also there is the Article 15 in the Canada/China Tax Treaty stating that profits earned in the operation of aircraft in international operations are only subject to tax in the state in which the operation is headquartered. Giving up the drivers licence would be a pain in the a$$ especially when it comes to wanting to rent cars abroad. Although from what I've seen in China I am not going to attempt driving over there. Thanks for all the good feedback guys. That PDF is a really funny read.

Thanks
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ahramin
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Post by ahramin »

Sounds like you'll be ok if the only thing going against you is the LOA, but if you have an LOA and a house ...
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Post by Jack Klumpus »

You are not required to fill any form when departing Canada. All you have to do is tick the box on your next tax application.

I don't know what the big fuss is about credit cards and drivers licence. I have both. I have a mortgage in Canada (rental properties), I keep my licence valid, and I rent out to relatives. It says a third party at arms length. If it's fair market value, then you're fine.

Primary ties are pretty straight forward. Secondary ties, it doesn't say how many secondary ties one may have. It basically is dealt with on a case to case basis. If you want zero headache, cancel everything and don't look back.

I feel like some people fill out too many forms, that no on requires from you, and go overboard with this issue.
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Post by complexintentions »

Seeing as I was sitting in a hotel room in Shanghai a couple days ago, the linked file is pretty hilarious! A lot of common stuff to ANY expat experience, the mind-numbing stupidity of bureaucrats and zombie procedures could just as easily be anywhere in the uh, developing world. And not that infrequent in the West, either.

I agree with Jack. I didn't fill out the non-resident declaration when I left. I did file one last tax return because of a residual tax slip that went a few days in the tax year I left in. I also wrote a letter to them explaining that I had left the country, and asked to update my address. The tax invoice came to my Dubai address and I never heard a thing again. I did cancel my provincial health and kept the letter stating I did so. I have one Canadian credit card still, a dormant RRSP account and my driver's license because it has the Commercial designation and I don't want to lose it.

Basically if you are a bona fide overseas resident it won't be hard to prove. Most of Canada happens to live along the border with a very large neighbour, and CRA spends most of their time chasing the border hoppers who like to claim non-residency while living close by. When your permanent address is in Hunan Province, it sort of helps to explain itself...

DO get a professional opinion, and - important - one who actually knows about expat tax law. Most accountants do not specialize in the area and may only have a vague idea of the rules.
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Post by Eric Janson »

I downloaded the file yesterday - had a quick browse.

It sounds very similar to what I have been told by people who have worked in China. I have yet to talk to anyone that recommends China.

I have spent time in Beijing - the pollution has to be experienced to be believed! Shanghai is a bit better.

For me personally China is a "no go". Strictly a last resort if the only other option is unemployment.

As I get older the list of stuff I won't accept gets longer and longer. Screwing around with my contract is right at the top.

It saddens me that people all too frequently see these huge salaries advertised and never look any closer.

(Tip:- You will not be earning what they advertise. Notice there is no breakdown in how the salary is calculated. Huge red flag!)

Big issues as well with the so called "Commuting Contracts" or "Basings" - all lies.
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Post by North Shore »

This company was recommended to me some time back when I was thinking about expatriation:
http://www.expat.ca
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