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Anxiously waiting for a reply,
Under the Canadian income tax system, a person's liability for income tax is based on his or her status as a resident or a non-resident of Canada. A person who is resident in Canada during a taxation year is subject to Canadian income tax on his or her worldwide income from all sources.
For a government agency, CCRA (or whatever they're called today) has a good web site that answers lots of common tax questions like yours.
You can claim all reasonable expenses associated with earning your income. You can deduct a portion of rent/mortgage interest, utilities for use of your own home.
I suggest you talk with an accountant...
I will be living in Canada.The problem is would the canadian government consider my business as operating in Canada? Besides that, the canadian government charges a world wide tax on all incomes accrued from aboard. If i set up a corporation elsewhere and dont receive a dividend, it shouldn't be counted as income?
How do you determine where the location of the business is at? By the founder or what? I have no intention of working so hard for the benefit of lazy workers.
The test I use to decide how to do something is "Could I explain this to an auditor?" I write off equipment and the maximum allowable portion of most household expenses, and have even paid family members to help out, but I don't write off a dinner with my wife where she asks how work is going.
Secondly, and to more directly address the OP, when you incorporate, there is a legal separation between your income and that of the corporation's. If you incorporate in some foreign country with no taxes, your company may avoid taxes. But the money has to get into your hands somehow for you to spend it. There are more tax advantageous ways to get the money out, such as dividends, capital gains, and shareholder loans, but if you start spending the company's income directly it will count as employment income and you'll owe taxes.
But what if the overseas company incorporated is not owned by me , but by a relative? Every month a sum can be transferred to my bank account instead and surely tax authorities would not be able to track this 'income' or 'gift'.
Every month a sum can be transferred to my bank account instead and surely tax authorities would not be able to track this 'income' or 'gift'.
Again, IANAL, but
- Your relative might incur a tax hit when they take the money out of the corporation
- Just like everything else, you'll get away with it until you get audited. See my first rule, and try to think of how you'll explain it to an auditor.
You're right, it probably can't be tracked. But audits are often random... :)
The problem is , as a HK corporation, would i be allowed to host it in other places than HK? What is it like in Australia? If i on the other hand host it in HK, would my earnings not constiuite as not income from abroad and subjected to taxes?
Live in Canada pay Canadian taxes, simple. If it bothers you, hand in your passport and move. Ohh, I forgot, that passport is very convenient and useful.
>>>>I have no intention of working so hard for the benefit of lazy workers.
Who are you calling lazy? Canadian workers?
Why the mods did not delete this discussion I don't know. Enough of the Canuck bashing please before i find a place to put this hockey stick.
bear in mind that professionals who are skilled in these things and are able to set up legal schemes to greatly lessen the tax payable are very expensive.
however as has been noted in threads above, i believe there is a moral issue here as well, if you want the benefits of society wherever it is you live then be prepared to pay the price too.
I just went for this free internet business seminar and it was actually full of crap. The guy ended up trying to sell me into this program where you become a business partner ,trying to get 1000 customers (so-called opt in) as your base. Then the business partners sell products through emails to the 1000 000 customers . My brother and I were joking about it on the way home. I am so thankful for you guys for making the forum real useful. Even the guy who thinks im bashing canadians..which im not.