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Canadian resident looking for advice on reducing taxes


by @yesmad | 5yr  | 4 comments

My girlfriend and I are Canadian residents that make a full-time income online, though affiliate commissions and ad revenue. As of right now, we have bank accounts in the US and most income is earned in USD.

The thing is that our income taxes are quickly rising to the point that itโ€™s absurd and would be well worth the time and money spent to reduce them somehow.

Can anyone comment on our options here?

Weโ€™ve considered moving around and not staying in any one country long enough to owe taxes anywhere, but that seems very difficult as a Canadian resident:

Reading up on the stipulations for being a โ€œresident for tax purposesโ€ in Canada, they basically want you to sell all of your belongings and cut ties with your family in order to not be a taxed resident. Is this true?

Another option weโ€™re interested in is incorporating in an offshore country that has low or zero corporation taxes. Does anyone have any suggestions here?

Iโ€™ve been looking into setting up a Canadian corporation, but the corporation tax is still upwards of 15%, plus youโ€™re taxed on what you take out of the corporation.

If anyone here has knowledge about any of this Iโ€™d love to hear your advice.

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@yesmad | 5yr

Thank you both for the info, youโ€™ve given me something to think about.

Iโ€™ve come to the conclusion that at least at this point, trying to incorporate in a tax haven or otherwise completely (legally) avoid paying taxes here is too much of a pain.

Iโ€™m disappointed that leaving the country for an extended period of time still means paying taxes here if you intend to return at some point. I was hoping weโ€™d be able to, for example travel around for a year and jump around enough to pay taxes nowhere, but that doesnโ€™t seem possible.

At this point Iโ€™m looking into incorporating in Canada as the most simple path at this point. As far as I know at this point, you can pay yourself from the corporation through dividends at a limit of about $40,000 at zero personal income tax rate. That amount would be taxed around 14-15% in the corporation.

Iโ€™m looking into talking to an accountant here to structure everything properly and start the bookkeeping for the corporation properly. From what Iโ€™ve seen, the process of incorporating in Canada itself is straightforward, but the corporate tax returns are very difficult to do for the average person so a CPA is necessary.

Does anyone here have a Canadian corporation? How is it working for you?

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@blueblueocean | 5yr

You can use Turbotax Business Incorporatedโ€ฆ
I agree that Canada is not a great residence base as a digital nomad unless you live on your capital gains or are relatively low income.

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@bavals | 5yr

Just to warn/frustrate you with more annoying stuff: any corporation wholly owned by Canadians may also be considered Canadian and may even be required to file in Canada. This is where it gets complicated, but look up this weird phrase: โ€œMind and Managementโ€ + Canada + corporation.

In my non-professional opinion, everything is set up so that itโ€™s exceedingly difficult to โ€œescapeโ€ from the clutches of the RC.

A Canadian corporation is actually reasonably attractive โ€“ at least when compared to many other jurisdictions. 15% of profits is certainly less than 30-35% that many other countries charge. In my opinion, what makes it really expensive is paying yourself as an employee: I ran a few simulations with calculators available online, using $60K USD as my โ€œbaselineโ€ hypothetical salary, and came up with an amount that pushes the effective combined tax paid โ€“ first by the corporation and then you personally โ€“ to about 50% and even higher. But thatโ€™s only in my ridiculously overtaxed province: it may be way less in BC or AB.

But if you can figure out a way to pay yourself as a contractor plus have a few other clients on the side (Iโ€™ve heard that RC doesnโ€™t approve of freelancers with a single client, clearly thinking that they should be employees and thus pay more in combined taxes), itโ€™s not so bad.

The feedback Iโ€™ve heard on opening offshore corporations (never tried anything myself) is all negative. Itโ€™s useless to have a structure without a bank account and opening an account for an entity incorporated somewhere sketchy (like the Caribbean) is very difficult. Where it is possible, be prepared to prove that youโ€™re not a nomad at all but a law-abiding citizen with tax returns, a primary residence, and a whole bunch of utility bills to prove that you live there. Also, the initial deposit requirements may be in the five-digit area. Not so nomad-friendly, is it?

As far as โ€œcutting tiesโ€, if you decide to go all the way (btw, I decided not to, at least for now), I spoke to a friend of mine who works for one of the โ€œbig fourโ€โ€ฆ or however many are left now. She doesnโ€™t deal with such situations personally, but she thought that the strictness of this requirement gets overblown. As long as you sell your real estate and close most bank accounts, you should be good. For the one or two accounts you prefer to keep, you can write a memo explaining why, even though you donโ€™t expect to return to Canada, you need them. Realistically, for all the surveillance and stuff, nobody is going to track down for how many hours you spoke with your friends and family and declare on that basis that you maintain your social ties in Canada. On the other hand, you do need to declare which โ€œotherโ€ place youโ€™ve moved to. Supplying a new tax ID in that country may be enough to prove it. But you canโ€™t just say Iโ€™ve moved and now I live nowhere.

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@blueblueocean | 5yr

This is the case for anyone living anywhere - Canadian or otherwise. Unless you reside on a small tax-free island , youโ€™ll pay tax on whatever you take out to live in your country of residence and defer the difference in the offshore corporation.

Offshore corp works if the income is active business income. Passive income is considered pass-thru and taxed each year as Canadian income, like a deemed dividend of some sort.

Talking or visiting your family for up to a certain period of time (3 or 6 months, canโ€™t remember) is not considered ties for tax residence, pretty much under any circumstance.

Neither is really having a bank account, an investment account or even keeping a Canadian corporation (some provinces require a Canadian resident shareholder/director, others do not).
Usually itโ€™s a collection of things together.
However, intent is most important. To keep some of these accounts if you must while transitioning abroad or to pay out to your RRSP or even if you just want to keep them for a while, make sure you send a statement to the bank, brokerage, or institution - like a letter - that says you are no longer a Canadian resident and to withhold tax if any. This act alone, together with filing a final return and paying departure tax, should be sufficient. But of course keep the accounts passive and to a minimum just in case. This is just my understanding. Intent to leave and declaring so to your providers, leaving, and paying departure tax and taking up tax residency in a new location are strong actions you can take to prove non-residency.

PS. I would only do this after I maxed out all Canadian TFSA, RRSPs. Also I would become a non-resident before transferring assets to an offshore structure as that would prevent the requirement to file information returns in Canada about them.

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Read and participate in 14,070 discussions on Nomad List

Suggested topics

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Where do I get good legal advice/support to have a long-term stay in Portugal?


in Lisbon, Portugal by @mzorrilla | 27d 27 days ago | 4 comments

Hello, everyone!

My idea is to stay as low as 6 months and as long as a year (maybe, who knows) over Lisbon after doing some analysis from many cities in Europe.

I'm an Argentinian and Chilean (both nationalities) so... no Euro-pass for me (getting my Italian nationality could take 2 years easily). I'm also a remote worker and I have a really good income (I work for a Silicon Valley company) so I can show more than enough resources to stay in the country.

Everything I see online doesn't inspire me much confidence (most sites looks a bit scammy) and this is not a "vacation stay"... I want to be clear my head far away from Argentina right now. If someone has a good website, recommendations, etc I will super appreciate.

Thanks in advance!

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Issues with not being a tax resident anywhere?


by @lightworker | 9mo 9 months ago | 2 comments

Anyone with knowledge regarding complications of not being a tax resident anywhere in the world? Iโ€™m aware that primary health care, bank account opening and incorperation can be problematic but are there other practical or legal factors I should be aware of?

And what about paying myself salary from a self-owned OECD company? I would like to know if I risk potentieal issues with the tax authorities in the jurisdiction of the company, especially regarding withholding tax.

Appreciate your input!

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What investment options are open to e-resident?


by @64tankman | 9mo 9 months ago | 1 comment

I know from experience that if you have residential status in countries where IG (a broker) serves, you can buy stocks and other assets through this broker. But I wonder what doors to the stock market, asset market or broker can be unlocked with e-residency? Some banks open a terminal for customers to buy assets overseas too, is one of the e-residency friendly bank offering a good portfolio of assets to invest in?

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Looking for a warm place, possibly near the sea with excellent wifi


by @mariaplslourdes | 10mo 10 months ago | 12 comments

hello :wave: Iโ€™m planning my next trip (from January/February), and Iโ€™m looking for a place where itโ€™s hot, with the sea, and good wifi.
At the moment I live in Paris and work with San Francisco times, so preferably I wouldnโ€™t go to Asia.
Iโ€™m thinking, South Africa or South America, what do you recommend?
Thank you

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Anyone know an accountant for Canadian nomads/expats?


by @noam_lightstone | 11mo 10 months ago | 16 comments

Hey guys, this was my first year as a Canadian nomad.

As far as I know of, Canadians donโ€™t pay taxes if they do not live in the country for 6 months.

But Iโ€™d like to talk to an accountant or someone who does Canadian taxes specifically for expats and nomads to get clear on the rules and for help on my return coming up.

Does anyone know someone who specializes in Canada who can help? Iโ€™ve seen plenty of US recommendations but none for us canucks.

Thanks guys!

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Advice on phone plans? 1 year in Europe


by @larsheather | 2yr 1 year ago | 8 comments

Weโ€™re Americans planning to be in Europe for all of 2020 - approx. 90 days in each country, and alternating Schengen and non-Schengen. Our destinations will likely include four of these: Italy, Croatia, Bulgaria, Estonia, Ireland, Romania, and Spain.
Can anyone give us advice on cell phones? We would prefer to keep our current (U.S) numbers if at all possible. We donโ€™t anticipate making many local calls, but will phone the U.S. about once a week. Weโ€™ll use our phones for internet quite often.
Any advice for our situation would be very much appreciated!
Thanks,
Heather and Lars

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Remote worker in Amsterdam: taxes and legal status?


in Amsterdam, Netherlands by @think | 2yr 2 years ago | 1 comment

Hi all,

I am moving to Amsterdam in January and looking for advice regarding legal status.

I work for a small French company. They agreed to let me move to Amsterdam as a remote worker starting January. :v:

However, they have no business entity and no employee in the Netherlands, so we have no idea how to set up the whole thing legally speaking. Should I remain an employee of the French entity, should I charge them as a consultant/contractor?

Of course, I am looking for a solution that is both simple and with minimum taxes :stuck_out_tongue_closed_eyes:

Thank you for your help!!
Steph

PS: If you can recommend a good accountant that is competent on the topic, I an happy to pay for the service too!

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Tax Planning advice (Primarily contracting for US company)


by @kartman92 | 2yr 2 years ago | 7 comments

Hello nomads,

Due to a recent US work visa rejection (H1B), Iโ€™m considering turning to freelancing and being a digital nomad. My former employer (US based start-up) wants me to continue rendering my services as a contractor/freelancer (so I have a confirmed major client and Iโ€™ll probably take on other minor clients on the side). From the get go I want to get my taxes right and I was hoping you seasoned nomads can assist me. Some of the key aspects of my case are:

  1. I hold an Indian passport and as long as I donโ€™t stay in India for 182 days Iโ€™m considered non-resident (No taxes on foreign income as long as services are not rendered in India, otherwise 30% tax).

  2. I may have to visit the US occasionally, so having a tax-residency in a country with a US tax-treaty may be beneficial (I maybe incorrect here).

  3. Iโ€™m willing not to be a perpetual traveller and put down roots in a low tax country that offers easy tax residency with low-taxes.

  4. Will incorporating in a tax-friendly help my case? Or will just perpetual travel be enough to completely avoid taxes?

P.s. If any of you offer sound tax advice for a fee and are aware of international taxation laws (especially US tax laws), do let me know.

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Nomad Family looking for a short term rental in Mumbai


in Mumbai, India by @ricardomolina | 2yr 2 years ago | 2 comments

Hello All,
We are a nomad family starting our journey in Medellin. India / Mumbai to be specific is our next destination.
I am finding it very difficult to find properties in AirBnB within a reasonable budget and makaan and magicbricks is cumbersome.

Anyone has had any experience on best approach to find where to stay?

Any help greatly appreciated.

Ricardo

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I wanna go a month in a greek island, anybody has advice?


by @leghoff | 3yr 2 years ago | 0 comments

Hey there, i wanna spend one month on a greek island in August. Just need a view by the sea in a small village. Anybody has advice? By the way, i am a translator, so i need Internetโ€ฆ

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Is anybody a Digital Nomad in the UK and not a resident?


by @creative_nomad_ | 3yr 2 years ago | 6 comments

The situation is that my BF is a UK citizen and I am not. We are traveling around SEA and planning to stop in the UK for 6 months to rekindle funds. Granted, the UK is not the cheapest place to rekindle funds, however, he can work and get a good job there.

I have already done my working visa in the UK so I canโ€™t legally work there again. Iโ€™m a graphic designer and web designer and have decided that I will try and get freelance work to support myself whilst Iโ€™m over there.

My question is more related to tax and visas. I am an Australia citizen so I can get a 3 month tourist visa. Iโ€™m just a little worried about how strict they are over there on visas and questioning finance etc

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Anyone here resident in Portugal with incorporation elsewhere in the EU? Need some advice


in Portugal by @solardive | 3yr 2 years ago | 0 comments

Hi everyone!

Currently looking at ridding myself of the 9-5 and becoming a freelance consultant. Iโ€™m not planning to go full erm, โ€œtax optimisationโ€, as I believe in taxes as a concept, but I would like to pay less of them so I can get my business off the ground with more peace of mind.

Iโ€™ve decided I want to apply for the Portugal NHR (Iโ€™m a EU citizen), but I donโ€™t want to incorporate there. Anyone here has experience with being a Portugal tax resident and running a company elsewhere? If yes, where and why did you choose that country/place? Is it a a lot of hassle?

Thanks!

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Where to pay taxes if self employed non-resident of the UK, travelling Europe?


by @jadi4nd | 3yr 2 years ago | 5 comments

Hi, I know there are a few posts around this topic but none of them quite answer my questions.

I am British and currently a resident in the UK.
Next year I am going to become a non-resident and spend over a year traveling mostly around Europe, moving every few weeks never staying anywhere longer than a month. (My first venture into becoming a digital nomad!)

I am remote, self employed, software developer working mostly for one client based in the UK.

Where am I liable to pay taxes?
From what I have read I will not be liable to pay taxes in UK, can anyone confirm this?
If not the UK then where if I am moving every few weeks?
If possible I want to avoid starting a company as this seems unnecessarily complicated for my work setup.

Thank you in advance for any help :slight_smile:

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How do taxes work for perpetual travelers?


by @whirledover | 3yr 3 years ago | 5 comments

Hereโ€™s a question (actually a bunch of related questions) thatโ€™s been a bit of a thorn in my side lately. Iโ€™ve already combed this forum as well as several others but would love some more insight from more knowledgable people.

So, here goesโ€ฆ

Background: Iโ€™m a perpetual traveler and havenโ€™t stayed in a single country longer than 6 months for around 5 years now. Iโ€™m a non-US person so no IRS worries but my country of citizenship (Korea) has a residential tax system and since I havenโ€™t claimed residency anywhere else, it seems possible for my government to claim me as a tax citizen.

Which brings me to my first question: At what point does forming a solid business structure to cover your taxable a** become worth the hassle? $100K/year? At $200K/year? I sort of feel like most governments wouldnโ€™t bother with this because itโ€™s relatively โ€œsmall fishโ€ - thoughts?

And that brings me to another question: If Iโ€™m not needlessly spending time worrying and I should finally pull the trigger and set something up that makes me more โ€œlegitโ€ - even if it requires paperwork - whatโ€™s my best option? Hereโ€™s what Iโ€™ve come up with:

Set up an offshore company - Iโ€™m leaning toward RAK Offshore since it seems to have no paperwork requirements and has no taxes - and use that to hold and re-invest the income I receive while paying myself a nominal amount every month, like $3,000, which I then file Korean (income) taxes for. This makes sense in my head since thatโ€™s roughly the amount I spend every month anyway but would this qualify as tax evasion?

Last question: for all of you who are perpetual travelers and arenโ€™t filing tax returns with your country of citizenship/last tax residency - what are you doing in terms of investing the money youโ€™ve saved? From what Iโ€™ve read, banks will report accounts that hold over a certain amount to the country of the account holder and online brokerage accounts seem to be the same.
Oh, and is the money accrued (without being reported tax-wise) considered black money?!

Okay, Iโ€™m done for now. Apologies for writing a book - Iโ€™m not so learned on this topic. Would appreciate any insights. Thanks in advance! :slight_smile:

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Looking for something to prop up my Asus MB169B+


by @jbweimar | 3yr 3 years ago | 2 comments

I recently purchased a second monitor to connect to my MacBook Pro 15". I use the Nextstand laptop stand to get my MacBook to eye level. Iโ€™m wondering what second monitor (without base) users are using to get their second monitor at the same level. I know of this company Elevate Stand (.com), but it seems a bit heavy and bulky (although I guess it must be somewhat, if it is to hold a monitor).

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How long does a non-resident Canadian Citizen need to stay out of Canada to maintain non-resident status, per year?


in Canada by @balindsieber | 3yr 3 years ago | 1 comment

Hey fellow nomads. I have an interesting situation.

Iโ€™m a Canadian Citizen whoโ€™s been a resident of the United States for the last 12 years (work VISA). I incorporated my LLC in Hong Kong and have been a nomad for about 6 months.

I just spoke to my Accountant and he says that I will only have to pay taxes to HK, because Iโ€™m not a resident of either US or CAN. Thatโ€™s amazing news as both places suck for taxes.

Iโ€™m currently in Colombia but I spent the first 2 months of this year in Canadaโ€”I want to make sure I stay out of Canada long enough to remain a non-resident.

Does anyone know what that amount of time is?

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What's the best way for Canadians to get cash or transfer money in Thailand & SEA?


in Thailand by @artofbryce | 3yr 3 years ago | 5 comments

Weโ€™re setting off on our first venture for new digital nomad life in 20 days!

  • starting in Chiang Mai as our home base
  • 1 year ED visa
  • planning to bounce around all over

Right now, Iโ€™m utterly baffled and confused by trying to figure out how weโ€™re going to be able to get more cash or transfer money from our bank accounts in Canada. Either at all or without getting charged insane fees.

Iโ€™ve looked through the forum and a lot of solutions put forth with no real luck. Hoping that some Canadians may chime in with solutions, experience or advice.

Thanks!

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I'm looking for a European city with a great connection to the outdoors. Help?

 

by @justinbosco | 3yr 3 years ago | 23 comments

Iโ€™m in the middle of doing some research for our next destination within Europe and Iโ€™m hoping to get some suggestions from some outdoor enthusiasts whoโ€™ve spent time on the continent.

My favorite cities are Innsbruck, Austria and Bergen, Norway because you can be downtown having a beer one minute and thenโ€ฆ boomโ€ฆ up the mountain in the middle of nowhere 15 minutes later. Iโ€™m looking for a similar place to spend a month or two this winter. Places like these are hard to find because โ€œmid-size european cities with great hiking nearbyโ€ doesnโ€™t return too many relevant results on Google. Great adventure towns are usually in the middle of nowhere, the kind of places youโ€™ll need to rent a car to get to the grocery store, and places with good public transportation are usually concrete jungles. But places like Innsbruck and Bergen manage to combine the best of both worlds.

Has anyone come across similar places theyโ€™d recommend?

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Urgent Advice Needed About Visa to Travel and Stay in Sharm El Sheikh


by @ryanuk | 3yr 3 years ago | 0 comments

Hello Everyone,

I am new to this forum. I thought I would just dive in.

I am travelling with my wife and my young daughter, so as you can imagine it adds a bit more to my planning.

I am looking to stay in Sharm El Sheikh in Egypt for a while. I am a Brit, and I need to sanity check some information that I have received.

My initial plan to stay in Sharm was as a British citizen get a multi entry visa which would give me 90 days and take it from there. However, I have been told by someone the following and if it is true it would be the best news for me:

To stay in Egypt you can get a 28 Day Sinai Visa on arrival. So on day 26 I should go to the Visa office in Sharm and I would be granted a 6 month Visa on application. Apparently it is not multiple entry visa, it is for 6 months and you simply renew it a few days before it expires. You can do this twice before you MAY have to leave the country. In other words you can stay a whole year hassle free!

Is this true? I really need to know as this is very important for me.

If anyone knows, or if you know someone who may know, your advice would be really welcome.

Thank you.

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I'm beginning my Nomadic journey - what advice do you have?


by @jacob_tr | 3yr 3 years ago | 8 comments

Hello Everyone,

On January 8, I set off on my Nomadic Journeys. I have a one way ticket to Iceland booked for a film shoot, and a flight into mainland Europe on the 20th, and from there I have no idea, and I am completely on my own.

What advice do you have? Right now I am feeling everything, from bad to good about it all, really can feel that safety/wool from underneath me get pulled away, I know Iโ€™m jumping out of my shell here.

(To give some background, Iโ€™m starting my nomad journey after having started a successful business, so financially I am set. Itโ€™s the question personally, mentally how do you cope in the beginning of leaving everything and going?)

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