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Canadian International
Tax Services

Tailored Plans to Meet Your Unique Needs

We would welcome the opportunity to discuss your unique situation and to develop a tailored plan to meet your needs. When our clients approach us, we talk them through a vast array of Canadian tax situations including:

A.     Immigration To Canada – Tax Planning

We can help you navigate the complex Canadian international tax requirements and develop solutions to allow you to access your international wealth without triggering unnecessary tax.

i. Have you planned for the difference in tax rates?

Canada is a country known for its high personal tax rates.  This means that you may notice a big difference in your after-tax cash-flow once you have taken up residence in Canada.

 

We can help you plan for your changing tax burden and provide options for how you can leverage various legal structures to maximize your tax efficiency while living in Canada.

ii. Do you continue to hold investments and properties abroad?

Many immigrants to Canada don’t realize that once you become a Canadian resident, you will be subject to tax and reporting on your world-wide assets and income.

 

We can help you navigate the complex Canadian international tax requirements and develop solutions to allow you to access your international wealth without triggering unnecessary tax.

iii. Do you own a business?

After coming to Canada do you plan to continue a business that you had setup in your former country?  Do you plan on starting a new business in Canada?

 

Getting the right advice is important to make sure that you pick the right business structure for your tax situation.  Our cross-border tax services group is trained on evaluating how foreign business will be treated in Canada and in working with our international network of tax professionals to develop a plan for operating your business and repatriating profits to Canada.

B.     Emigration From Canada – Tax Planning

Deciding whether to terminate your Canadian residency for tax purposes is not a decision to be taken lightly and requires professional guidance.

i. Have you considered the long-term implications of departing Canada?

When you leave Canada, if you choose to end your Canadian residency for tax purposes there are significant tax consequences including a deemed disposition of your assets, restrictions on the ability to contribute to pensions, and future entitlement to government pensions (CPP and OAS).  Depending on your new country of residence, there may be also be significant tax savings if your cease your Canadian residency.

 

Deciding whether to terminate your Canadian residency for tax purposes is not a decision to be taken lightly and requires professional guidance.  Our cross-border tax services group has years of experience in guiding expats on through the pros and cons of ceasing their Canadian tax residency and helping them to reach a decision they can be confident in.

ii. Do you have a tax plan for leaving Canada?

Changing your Canadian tax residency is not as simple as just moving to another country.  There are many steps that must be taken to adequately demonstrate to the Canadian tax authorities that your departure from Canada was intended to be permanent.

 

Our cross-border tax group can work with you to put together a step-by-step plan to terminate your Canadian tax residency and to establish residency in your new country.

iii. Have you planned for the deemed disposition of your assets?

Did you know that when you depart Canada, there is deemed to be a taxable disposition of most of your assets?  With careful planning there are many opportunities to reduce the tax on this disposition when you leave Canada.

 

Corporate restructuring, remuneration strategies, timed selling of investments and planned charitable giving are just a few of the tools in our cross-border tax group’s tool kit for ensuring a tax efficient departure.

 

Our team is skilled at creating departure plans for our clients that will ensure that when you leave the country, you can be confident that you didn’t pay more than your fair share of tax.

iv. Do you have a plan for your TFSAs, RESPs, and RRSPs?

While your TFSAs, RESPs, and RRSPs were valuable savings tools while you resided in Canada, your ability to use them after you move may be substantially limited.  The accounts may be subject to tax in your new country of residence and the ability to continue to contribute to the accounts may be limited.

 

Our cross-border tax services team can work with you to establish a plan for your Canadian accounts to ensure that you are able to take full advantage of them before you depart and to minimize your tax exposure after you have left the country.

C.     Non-Residents Investing In Canada

Getting the right advice is important to make sure that you pick the right business structure for your tax situation.

i. Buying and Selling Canadian Real Estate

After careful deliberation you’ve decided to invest in the burgeoning Canadian real estate market.  What is the best way to structure the investment?  Do you buy it personally or setup a company in Canada?

 

Choosing the right structure for an investment in Canadian real estate can have a significant impact on the taxes triggered on an eventual sale as well as your ability to reinvest proceeds without being impacted by Canadian withholding tax each time you sell the property.

 

Our cross-border tax services team is available to discuss your goals for the investment and what structure would work best for you.  When the time comes to sell the property, we can also help you obtain tax clearance certificates and file any tax returns that may be required.

ii. Canadian Rental Properties

Did you know that non-residents are subject to a 25% withholding tax on the gross rental income they earn?  Thankfully, this tax can be partially recovered by filing an elective Canadian tax return.

 

Our cross-border tax services team can coordinate with you to file the necessary returns to apply your rental expenses and get back some of your hard-earned cash.  Don’t want to wait till tax time to get back your tax?  We can also assist in filing withholding tax waivers that will reduce the tax withheld in future years.

iii. Structuring Business Operations in Canada

You see an opportunity in the Canadian market and want to pursue it.  Where do you start?  How do you make sure that you have satisfied all of your Canadian tax requirements?  What combination of business structures in Canada and your home country will result in you paying the least tax?  Do you need to be concerned with value-added taxes and payroll taxes?

 

These are all questions that our cross-border tax services team has plenty of experience in answering.  We understand the language of the tax treaty and how business structures are taxed in different jurisdictions, allowing us to craft a plan that achieves the best tax efficiency for your situation.

 

We can also review your situation to determine if harmonized sales tax (Canadian VAT) needs to be charged and whether you need to register for Canadian payroll tax.

D.     Canadian Residents Investing Abroad

When investing in a foreign country, it is important to understand the tax structures available in that region as well as how these structures interact with varying Canadian structures.

i. Reporting Foreign Income and Assets on your Canadian Return

As a Canadian resident you are required to report and pay tax on your worldwide income.  What does that mean?

  • The rent on your Florida vacation property? Yep!
  • Your investment in that start-up company in Lithuania? You bet!
  • Interest on your Swiss bank accounts? For sure!

Reporting the income on your tax return is only the beginning and your may also need to provide detailed reporting of where the income came from, what the value of the investment was during the year and, in the case of foreign companies, may even need to provide details from the financial statements.

 

If you miss reporting these details, the Canada Revenue Agency is waiting on the sidelines to throw some stiff penalties your way.

 

Before you get too concerned, contact our cross-border tax services team.  We understand all of the ins and outs of reporting foreign income and assets and would be happy to educate you on what needs to be filed and to help you make sure everything gets filled out correctly.

ii. Addressing Foreign Tax Obligations

You’ve decided to buy a property in Florida. You know that you need to include your rental income on your Canadian tax return, but is there anything you need to file in Florida?

 

At Davis Martindale, our cross-border tax services team can advise you on all of the foreign tax implications from investing in the U.S. If your investment is located somewhere more exotic, we can connect you with a qualified tax professional from one of our international DFK affiliates.

iii. Structuring Investments in Foreign Countries

When investing in a foreign country, it is important to understand the tax structures available in that region as well as how these structures interact with varying Canadian structures.  Choosing the right structure can impact the complexity and volume of tax filings required as well as the upfront and overall tax rate you will pay.

 

Our cross-border tax services team has the unique advantage of understanding the taxation of the varying types of U.S. investments and how to pair them with the right Canadian structure to provide the maximum tax deferral and the minimum overall tax paid.  We are also able to draw upon our extensive relationships with tax professionals throughout our international DFK network to produce an effective tax structure for investments into virtually any country.

iv. Creating a Strategy for Repatriating Wealth to Canada

You invested abroad and now it is time to reap the rewards of your efforts.  How do you actually get money back to Canada?  Do you sell the investment, pay a dividend, or draw a wage?  There is no single solution to the problem of effectively repatriating wealth.

 

At Davis Martindale, our cross-border tax services team realizes that developing the right plan requires a conversation on your personal situation.  In developing a strategy we will work with you to assess some of the following factors and come up with a plan that suits your situation:

  • Is your wealth to be returned to Canada immediately or over time?
  • Is your goal to defer tax or to minimize the total tax paid?
  • Is there unique tax treatment in the foreign country that can be used to achieve a more efficient tax result?

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