Do we need to file a Canadian return while living in Mexico full-time?

My wife and were deemed non-resident by the CRA several years ago.  We earn income working online as contractors for a Canadian company.  No deductions are made at source.  Do we need to file a Canadian tax return?  I found this info: Do you have to file a tax return?

You must file a Canadian tax return if you:

  • owe tax; or
  • want to receive a refund because you paid too much tax in the tax year.

I would like to know if we do owe tax in our situation. We are not looking for a refund.



Answer

From the CRA website regarding tax treaties with foreign countries.  You can reduce or eliminate the amount of tax you have to pay on income from other countries if Canada has a tax treaty with them.

My niece works and lives in France for part of each year. She only files a Canadian tax return because Canada has a tax treaty with France.  Her employer in France gives her a tax slip showing euros. In the TurboTax software, go to the T1 line l04, click twice, then click on the line where you would enter "foreign employment income" near the top of the page. A separate window opens where you would need to enter the name of the country and you have to manually look up the foreign exchange rate, enter the amount paid and the taxes withheld.

Canada collects any tax shortfall that my niece still owes and Canada remits it to France.


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