Living in Canada as a Permanent Resident but working for a UK based company?

[jamieb14]

Hi,

Is it possible to be PR in Canada but work for a UK based company?

I currently work for an IT company in the UK and many of our employees work from home or abroad, Is it possible/Okay for me to live in canada but work for a UK based company?

What's the complications if any?

Many thanks

 

[jamieb14]

Added info, I would be applying for PR through the Federal Skilled Worker program so I not sure if that has any baring on the obligations also?

 

[dpenabill]

Is it possible to be PR in Canada but work for a UK based company?

Your question is really about qualifications for becoming a PR. That is:

"Is it possible to become a PR in Canada but work for a UK based company?"

Once a PR, there is no IRPA restrictions on who the PR works for (except for special circumstances where the PR is conditional). Prior to becoming a citizen, while a PR, I worked exclusively (as an independent contractor) for a foreign based corporation, working entirely via the Internet.

Qualifying for PR is a separate matter. I am not familiar with all the variations in skilled worker applications and the particular qualifying criteria (such as sponsored apps versus general FSW apps, and so on). You may want to post your query in the Immigration Topics, where there is a conference specifically about skilled worker and professional immigrants, rather than here in the Settlement Topics and the conference about PR obligations.

 

[Rob_TO]

In general:
BEFORE you are a PR, so if in Canada just as a visitor or student but without a valid work permit, you are allowed to work for a foreign company while in Canada as long as all payments to you come from a source outside Canada, and you don't actually do any work for Canadian clients. So doing IT work for a UK company sounds like it would be ok, but you would need to see if you have to file Canadian income tax as a deemed resident.

AFTER you get PR, you can still continue to work with that same company. As a PR and resident of Canada, you would be required to report the income in your Canadian income tax and pay taxes accordingly as per the tax treaty Canada has with the UK.

 

[jamieb14]

Your question is really about qualifications for becoming a PR. That is:

"Is it possible to become a PR in Canada but work for a UK based company?"

Once a PR, there is no IRPA restrictions on who the PR works for (except for special circumstances where the PR is conditional). Prior to becoming a citizen, while a PR, I worked exclusively (as an independent contractor) for a foreign based corporation, working entirely via the Internet.

Qualifying for PR is a separate matter. I am not familiar with all the variations in skilled worker applications and the particular qualifying criteria (such as sponsored apps versus general FSW apps, and so on). You may want to post your query in the Immigration Topics, where there is a conference specifically about skilled worker and professional immigrants, rather than here in the Settlement Topics and the conference about PR obligations.

Thanks for the response, Im not worried about getting PR as I have enough questions in that side of the forum and have that all in hand. It's just i want to think about my options when I do get it as the company I work for treats me very well and are open to me working in canada so I just want to know about the complications.

 

[jamieb14]

In general:
BEFORE you are a PR, so if in Canada just as a visitor or student but without a valid work permit, you are allowed to work for a foreign company while in Canada as long as all payments to you come from a source outside Canada, and you don't actually do any work for Canadian clients. So doing IT work for a UK company sounds like it would be ok, but you would need to see if you have to file Canadian income tax as a deemed resident.

AFTER you get PR, you can still continue to work with that same company. As a PR and resident of Canada, you would be required to report the income in your Canadian income tax and pay taxes accordingly as per the tax treaty Canada has with the UK.

Thanks for your reply! Do you know where I can find info not the tax treaty canada has with UK? Im going to look into that now. 8)

 

[Rob_TO]

Thanks for your reply! Do you know where I can find info not the tax treaty canada has with UK? Im going to look into that now. 8)

Basically I think the main rule is, you pay tax first to the country where the income was actually earned, and then that would be topped up to pay remaining tax as if the income was earned in Canada.

i.e. say tax rate in UK is 20%, and in Canada is 30%, and someone has income of $50K from the UK.
20% tax on that would be $10K owed to the UK government.
Then only after the UK amount is confirmed, the remaining amount for Canada is another 10% to reach 30% total. So tax paid to CRA would be $5k.
In total is 30%/$15K tax paid, $10K to UK and $5K to Canada. If UK tax rate was higher than Canadian tax rate, then no tax would be payable to Canada.

Of course this is extremely simplified, but I think gives the general way it's done.

 

[jamieb14]

Basically I think the main rule is, you pay tax first to the country where the income was actually earned, and then that would be topped up to pay remaining tax as if the income was earned in Canada.

i.e. say tax rate in UK is 20%, and in Canada is 30%, and someone has income of $50K from the UK.
20% tax on that would be $10K owed to the UK government.
Then only after the UK amount is confirmed, the remaining amount for Canada is another 10% to reach 30% total. So tax paid to CRA would be $5k.
In total is 30%/$15K tax paid, $10K to UK and $5K to Canada. If UK tax rate was higher than Canadian tax rate, then no tax would be payable to Canada.

Of course this is extremely simplified, but I think gives the general way it's done.

Oh man thats awesome! okay I'll take that as the general rule and do some more research but I like that Thank you very much for your reply!

 

[swestenzweig]

In general:
BEFORE you are a PR, so if in Canada just as a visitor or student but without a valid work permit, you are allowed to work for a foreign company while in Canada as long as all payments to you come from a source outside Canada, and you don't actually do any work for Canadian clients. So doing IT work for a UK company sounds like it would be ok, but you would need to see if you have to file Canadian income tax as a deemed resident.

AFTER you get PR, you can still continue to work with that same company. As a PR and resident of Canada, you would be required to report the income in your Canadian income tax and pay taxes accordingly as per the tax treaty Canada has with the UK.

Sorry for the thread hijack, but I am in a very similar situation. I am an IT professional working remotely in the US for a US company. Although I am married to a Canadian citizen and I am about to submit my application for PR, I was under the impression that I was not permitted to work remotely while in Canada as a visitor. I thought a work permit was still required in this instance. Can you clarify?

 

[Rob_TO]

Sorry for the thread hijack, but I am in a very similar situation. I am an IT professional working remotely in the US for a US company. Although I am married to a Canadian citizen and I am about to submit my application for PR, I was under the impression that I was not permitted to work remotely while in Canada as a visitor. I thought a work permit was still required in this instance. Can you clarify?

As long as work performed is not done for any Canadian clients, and all payments come from a source outside Canada, you don't need a work permit as you are not actually taking away or competing against any work from the Canadian labour market.

 

[dpenabill]

Sorry for the thread hijack, but I am in a very similar situation. I am an IT professional working remotely in the US for a US company. Although I am married to a Canadian citizen and I am about to submit my application for PR, I was under the impression that I was not permitted to work remotely while in Canada as a visitor. I thought a work permit was still required in this instance. Can you clarify?

The response by Rob_TO is technically correct, although there is more to the analysis than whether the activity is taking away or competing against any work from the Canadian labour market.

But don't try explaining that to a CBSA officer at a POE. They tend to see work as work and that means prohibited.

In any event, there are many nuances to this. And there can be a big difference depending on whether anyone cares, who cares. Factors can include whether the work is being done as an employee or on contract, what is the person working's primary place for doing the work.

There are, after all, many Canadian businesses providing IT products and services for the U.S. market, so just because the company itself is located in the U.S. does not mean the activity is not competing with the Canadian labour market.

This exception, by the way, is mostly to protect travelers who are doing work for their foreign employer while they are traveling. Otherwise, for example, just answering work related email while on a holiday in Canada could get a person banned from Canada. It is not intended to allow an American to set up a home office in Toronto to do contract work for a U.S. company.

In practice this is very, very flexible and lenient, so long as CBSA is not the one asking questions. (That said, must admit I saw one show of Border Security in which the examining officer did clearly understand the difference between prohibited work versus helping a friend do some household repairs, typically done by the homeowner (rather than by a hired professional), for no pay . . . but my impression is that the officers seen on that program are better informed than many of the ones usually encountered at the border.)

 

[david1697]

Hi,

Is it possible to be PR in Canada but work for a UK based company?

I currently work for an IT company in the UK and many of our employees work from home or abroad, Is it possible/Okay for me to live in canada but work for a UK based company?

What's the complications if any?

Many thanks

As far as Canadian laws are concerned, why do you think there could be any reason you couldn't work for UK company while in Canada, as a PR or otherwise?
I mean how do you think Canada could control the hiring of foreign nationals or PR's by foreign entities where employment is outside of Canadian jurisdiction?

Now, if UK company (or rather UK based company) you refer to is located in Canada , and if you work for that or any other entity which is under Canadian jurisdiction, then of course you would need an authorization to work in Canada to work for them.
However, if the company you work for is outside of Canada and you hold remote position I don't see any way Canada could legally prohibit this, unless you were employed by an agency that was at war with Canada or otherwise pursuing illegal in Canada activities.

 

[jamieb14]

As far as Canadian laws are concerned, why do you think there could be any reason you couldn't work for UK company while in Canada, as a PR or otherwise?
I mean how do you think Canada could control the hiring of foreign nationals or PR's by foreign entities where employment is outside of Canadian jurisdiction?

Now, if UK company (or rather UK based company) you refer to is located in Canada , and if you work for that or any other entity which is under Canadian jurisdiction, then of course you would need an authorization to work in Canada to work for them.
However, if the company you work for is outside of Canada and you hold remote position I don't see any way Canada could legally prohibit this, unless you were employed by an agency that was at war with Canada or otherwise pursuing illegal in Canada activities.

Well I don't know that's why I asked! lol. It could be that PR obligation permit that you work for a Canadian based company for a certain number of years if you want to renew your VISA or if you want to apply for citizenship you have to have Canadian work experience, I don't know that's why I asked. ;D

 

[mooer]

Thanks for your reply! Do you know where I can find info not the tax treaty canada has with UK? Im going to look into that now. 8)

I'd be very interested to hear your research results on this one! I have a small amount of UK income but mostly Canadian income.

The tax reporting in Canada is done by the March of the year following the completion of the Canadian tax year (Jan-Dec)
The tax reporting in the UK is done by October (or Jan) of the year following the completion of the UK tax year (Apr-Apr)

Therefore, the opportunity to report income comes first on the Canadian tax return. The UK tax return isn't done until months later (could be up to a year later). I believe you would pay tax on it first in Canada and then any difference owed would be done on the UK tax return. Correct??

I also thought that you don't pay UK tax if you don't reside there?? Shouldn't it all be paid in Canada?

 

[mooer]

From HMRC website (http://www.hmrc.gov.uk/taxtreaties/in-force/canada1978-dta2014-consol.pdf):

Article 21
Elimination of Double Taxation

1. In the case of Canada, double taxation shall be avoided as follows:

(a) subject to the existing provisions of the law of Canada regarding the deduction from tax
payable in Canada of tax paid in a territory outside Canada and to any subsequent
modification of those provisions - which shall not affect the general principle hereof - and
unless a greater deduction or relief is provided under the laws of Canada, tax payable in the
United Kingdom on profits, income or gains arising in the United Kingdom shall be deducted
from any Canadian tax payable in respect of such profits, income or gains;

(b) subject to the existing provisions of the law of Canada regarding the allowance as a credit
against Canadian tax of tax payable in a territory outside Canada and to any subsequent
modification of those provisions - which shall not affect the general principle hereof - where a
company that is a resident of the United Kingdom pays a dividend to a company that is a
resident of Canada that controls directly or indirectly at least 10 per cent of the voting power
in the first-mentioned company, the credit shall take into account the tax payable in the
United Kingdom by that first-mentioned company in respect of the profits out of which such
dividend is paid;

(c) where in accordance with any provision of this Convention income derived by a resident
of Canada is exempt from tax in Canada, Canada may nevertheless, in calculating the amount
of tax on other income take into account the exempted income.