In which country does the person pay taxes in this case?

[gta88]

What if a Sri Lankan origin Permanent Resident (Canadian PR) living in Canada works for an 'out of Canada' company as an independent consultant and receives payment in Sri Lanka under a business name registered in Sri Lanka?

Simple question is where does the person pay his taxes? - Canada or Sri Lanka? or both?

 

[canuck78]

This is much more complicated than a post because it involves companies not just payments you need an accountant and likely a lawyer. You certainly need to pay taxes on your income in Canada when you are living here and benefitting from all the services you (and perhaps your family) use. You also need to look to see whether you could be “sheltering” money if you are living permanently in Canada yet paying yourself in a company abroad while working remotely for a company abroad (doesn’t seem to be in Sri Lanka) but not actually living in any of the 2 countries. If you are living permanently in Canada you should be creating a company in Canada so that the company you are working for can pay you in Canada.

 

[gta88]

This is much more complicated than a post because it involves companies not just payments you need an accountant and likely a lawyer. You certainly need to pay taxes on your income in Canada when you are living here and benefitting from all the services you (and perhaps your family) use. You also need to look to see whether you could be “sheltering” money if you are living permanently in Canada yet paying yourself in a company abroad while working remotely for a company abroad (doesn’t seem to be in Sri Lanka) but not actually living in any of the 2 countries. If you are living permanently in Canada you should be creating a company in Canada so that the company you are working for can pay you in Canada.

Thanks for the reply!!

 

[Copingwithlife]

Thanks for the reply!!

And if you’re creating a company , you’ll need to incorporate federally or provincially , get assigned a Business Number by the CRA , and pay your taxes thru the filing of your T2. If you’ll be paying yourself via said corporation, you’ll need to get a payroll account (RP) account assigned for the corporation. If the corporations revenue is greater then $30k over four rolling calendar quarters then you’ll need a GST/HST (RT) assigned to the Corp, and pay that tax separately from the Corp tax
Once you incorporate you’ll need to get the BN
Call the CRA with the Articles of Incorporation INHAND. The agent will need information off that document to pull the Corp as well as to verify your identity. If you cannot verify your identity, you will NOT be given the BN. There’s NO leeway