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Gratuity payment from employer before moving processed after arriving

chilkootcee

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My husband worked up until the day before we left the UAE and subsequently his gratuity payment was processed after we landed in Canada. Does this mean he would have to pay taxes on this gratuity payment even though it is an amount based on his employment prior to moving to Canada?

Thanks.
 

picklee

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Feb 19, 2017
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My husband worked up until the day before we left the UAE and subsequently his gratuity payment was processed after we landed in Canada. Does this mean he would have to pay taxes on this gratuity payment even though it is an amount based on his employment prior to moving to Canada?

Thanks.
You will need to consult the UAE-Canada tax treaty on this one, and ideally a professional who is familiar with said treaty.

Article 15 seems relevant:

Article 15
Dependent Personal Services
1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the calendar year concerned, and

(b) the remuneration is paid by, or on behalf of, a person who is not a resident of the other State, and such remuneration is not borne by a permanent establishment or a fixed base which the person has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft, operated in international traffic by an enterprise of a Contracting State, shall be taxable only in that State unless the remuneration is derived by a resident of the other Contracting State.
https://www.fin.gc.ca/treaties-conventions/UAE_-eng.asp