Remote Work from Outside Canada to Canadian Employer

[b1achi]

Hi everyone, please bare with me on this, as this is gonna be a bit complicated.

I will leave Canada soon, WP expires in 2 months, only 1 year of experience, French in progress (hopefully to take my first test Jan from my home city). I'm currently employed with a reputable consulting firm, and has got myself into the pool with a not-so-competitive score. That is why I'm going back home hoping to gain some more foreign experience.

The thing is, my Canadian employer now wants to retain me, and we had worked our way to get me working remotely for them from my home country.

I will change my status from employee to independent contractor, invoicing them every month, got paid in local currency, and will handle my own tax from the home country, as well as registered myself as sole proprietor providing business services to my Canadian employer.

Does anyone have a success story that they want to share, with the similar situation like this? My RCIC told me this is not doable, while researching on my own gave me tons mix of responses. My HR just need to know how to detach me completely from all the tax and obligation in Canada so I can fully claim my foreign experience. Appreciate everyone's input regardless!

 

[TFBTAX]

Good question to sort out before you leave — and your HR is right to ask, because "detaching" is really about tax residency, not just paperwork.

1. Residency is decided by facts, not by your work permit expiring. CRA looks at your residential ties: if you give up your Canadian home, your spouse/partner and dependants leave with you (or you have none here), and you cut the secondary ties (driver's licence, provincial health coverage, bank accounts, memberships), you're generally an emigrant for tax purposes from the date you leave. If significant ties stay behind, CRA can still treat you as a resident and tax your worldwide income.

2. File a departure return for the year you leave. You report your worldwide income up to your departure date and mark that date on the return. Keep proof of the date (flight records, lease end, etc.).

3. Departure tax (deemed disposition): if you were a tax resident of Canada for 60 months or more during the 10 years before you left, CRA treats most of your property as if you sold it at fair market value on departure — capital gains tax can apply even though you didn't actually sell anything. If you were here less than 60 months in that 10-year window, you're generally exempt from this (except for taxable Canadian property like Canadian real estate). Given you were here on a work permit, check which side of that line you fall on.

4. For your employer: once you're genuinely non-resident and performing the work entirely outside Canada, they can stop Canadian payroll deductions (income tax, CPP, EI). Payments to a non-resident for services rendered outside Canada aren't subject to Canadian withholding — the 15% Regulation 105 withholding applies to services performed IN Canada. If there's any doubt about your residency, the safe route is to keep your foreign address and sole-proprietor registration on file with them as documentation.

5. Your RCIC is right that the immigration side has its own rules — this is only the tax side. If your situation is anything other than a clean break (for example, keeping a condo here or a partner staying behind), get the residency question confirmed before relying on it, because getting it wrong is expensive to unwind.

One form worth knowing: you can file Form NR73 with CRA to get their written opinion on your residency status. It's optional, but it gives everyone — including your HR — certainty.

 

[iSaidGoodDay]

Hi everyone, please bare with me on this, as this is gonna be a bit complicated.

I will leave Canada soon, WP expires in 2 months, only 1 year of experience, French in progress (hopefully to take my first test Jan from my home city). I'm currently employed with a reputable consulting firm, and has got myself into the pool with a not-so-competitive score. That is why I'm going back home hoping to gain some more foreign experience.

The thing is, my Canadian employer now wants to retain me, and we had worked our way to get me working remotely for them from my home country.

I will change my status from employee to independent contractor, invoicing them every month, got paid in local currency, and will handle my own tax from the home country, as well as registered myself as sole proprietor providing business services to my Canadian employer.

Does anyone have a success story that they want to share, with the similar situation like this? My RCIC told me this is not doable, while researching on my own gave me tons mix of responses. My HR just need to know how to detach me completely from all the tax and obligation in Canada so I can fully claim my foreign experience. Appreciate everyone's input regardless!

Your RCIC is a fool. I don't see how you working remotely won't help you get a work experience and increase your points? Your goal is to increase your score with French + Foreign work exp. I had my Canadian job years before I landed here. I was a high paid exec who worked as an independent contractor before coming here. Your HR is dumb too, tell them that once you start invoicing as an independent contractor, you no longer hold any "tax liability" too.

I practically came to Canada as a dual language speaker who learned french for Express Entry. So, your RCIC claiming that this isn't doable is dangerously dumb. Ignore his advice.

 

[iSaidGoodDay]

Good question to sort out before you leave — and your HR is right to ask, because "detaching" is really about tax residency, not just paperwork.

1. Residency is decided by facts, not by your work permit expiring. CRA looks at your residential ties: if you give up your Canadian home, your spouse/partner and dependants leave with you (or you have none here), and you cut the secondary ties (driver's licence, provincial health coverage, bank accounts, memberships), you're generally an emigrant for tax purposes from the date you leave. If significant ties stay behind, CRA can still treat you as a resident and tax your worldwide income.

2. File a departure return for the year you leave. You report your worldwide income up to your departure date and mark that date on the return. Keep proof of the date (flight records, lease end, etc.).

3. Departure tax (deemed disposition): if you were a tax resident of Canada for 60 months or more during the 10 years before you left, CRA treats most of your property as if you sold it at fair market value on departure — capital gains tax can apply even though you didn't actually sell anything. If you were here less than 60 months in that 10-year window, you're generally exempt from this (except for taxable Canadian property like Canadian real estate). Given you were here on a work permit, check which side of that line you fall on.

4. For your employer: once you're genuinely non-resident and performing the work entirely outside Canada, they can stop Canadian payroll deductions (income tax, CPP, EI). Payments to a non-resident for services rendered outside Canada aren't subject to Canadian withholding — the 15% Regulation 105 withholding applies to services performed IN Canada. If there's any doubt about your residency, the safe route is to keep your foreign address and sole-proprietor registration on file with them as documentation.

5. Your RCIC is right that the immigration side has its own rules — this is only the tax side. If your situation is anything other than a clean break (for example, keeping a condo here or a partner staying behind), get the residency question confirmed before relying on it, because getting it wrong is expensive to unwind.

One form worth knowing: you can file Form NR73 with CRA to get their written opinion on your residency status. It's optional, but it gives everyone — including your HR — certainty.

ChatGPT garbage!