Canadian Tax Consultant Chartered Accountant International Tax Consultant Canadian Tax Professional Canadian Tax Accountant Michael Atlas - Canadian Tax Consultant US Tax Consultant
Michael Atlas - Canadian Tax Consultant
ABOUT MICHAEL ATLAS - A comprehensive summary of Michael Atlas' professional background and experience, as well as a listing of his extensive writings in the tax field AREAS OF PRACTICE - A description of the areas of tax practice in which he has extensive interest and expertise PROFESSIONAL FEES - Information on Michael Atlas' general approach to fees CANADIAN TAX GUIDE FOR NON-RESIDENTS - A useful summary of the application of Canadian tax rules for non-residents earning income from Canadian sources-includes analysis by type of income and application of major tax treaties CONTACTING MICHAEL ATLAS - Everything you need to know about contacting Michael Atlas
ABOUT MICHAEL ATLAS - A comprehensive summary of Michael Atlas' professional background and experience, as well as a listing of his extensive writings in the tax field
AREAS OF PRACTICE - A description of the areas of tax practice in which he has extensive interest and expertise
PROFESSIONAL FEES - Information on Michael Atlas' general approach to fees
CANADIAN TAX GUIDE FOR NON-RESIDENTS - A useful summary of the application of Canadian tax rules for non-residents earning income from Canadian sources-includes analysis by type of income and application of major tax treaties
CONTACTING MICHAEL ATLAS - Everything you need to know about contacting Michael Atlas

EMPLOYMENT INCOME

RULES UNDER THE INCOME TAX ACT

A non-resident who earns income from the duties of employment or office exercised in Canada will be subject to Canadian tax on such income under Part I of the Act. Such income may include benefits normally taxable under the Act. In addition, the value of stock options exercised by a non-resident may be taxable in Canada to the extent that such benefit relates to employment in Canada.

A non-resident who earns employment income that is paid by a Canadian resident will generally not be subject to Canadian tax to the extent that such income is paid for services rendered outside of Canada.

RULES UNDER CANADA'S TAX TREATIES

Jurisdiction To Tax

Canada's tax treaties generally allow Canada to tax the income of non-residents derived from the duties of employment or office exercised in Canada .

However, many of Canada's tax treaties, including those with France, Italy, Japan, the Netherlands, Switzerland, and the United Kingdom provide that a non-resident may not be subject to Canadian tax on Canadian-source employment income as long as

a) The recipient is present in Canada in that calendar year for a period or periods not exceeding, in total, 183 days, and
(b) The remuneration is not deducted in computing the income under the Act of an employer who is Canadian resident, or of a fixed base or permanent establishment in Canada of a non-resident.

A similar rule is found in Canada's tax treaty with the United States, however with the further proviso that the amount of employment income may not exceed $10,000 (CDN) in the relevant calendar year.

In many cases, the application of such rules may provide exemption from Canadian taxation of stock option benefits realized by non-residents.

Entertainers And Athletes

The general treaty rules noted above are modified in connection with entertainers (including musicians) or athletes.

In basic terms, Canada may tax the income from such activities carried on in Canada, even if such income might otherwise be exempt from Canadian tax under the general rule above.

However, for U.S. residents, this special rule in the U.S. treaty will not come into play in any particular calendar year, unless the gross receipts in that year (including expense reimbursements) are more than $15,000 (CDN).