Requirement of GST for Contract employment

[vvbbe]

Hi,

Let me tell you my background a bit: So, I joined a company as a Independent contractor for 1 year and I want to use this experience for CEC express entry. For this reason, I don't want to incorporate myself (so that I probably will be able to use the 1 year as an employment), now considering this situation, should I claim the GST (Well, to be honest I am not sure of this thing, can anyone please delve it a bit and tell me why will they give me GST?)? or I just should claim the money from the employer (or hiring company) the amount that I am supposed to get considering my hours of work?

Please, someone who was in this situation/or has knowledge of this situation, could you help me? I appreciate your help in advance.

 

[rezafc]

Hi there,

By claiming GST you probably mean paying taxes right? Of course you will need to pay your taxes, specially when you are working as a full timer (which is a mandatory part of CEC application).

Usually the company needs to file in your taxes for you. If you are on contract basis and you need to file your taxes yourself and pay, then do it as soon as possible. You will need to provide CIC with your T4 summary at some point. They will ask for it down the road if you don't include it in your application.

So just to recap, mandatory requirements for CEC is 1 year full-time (at least 30 hours a week) work + taxes paid + supporting documents such as reference letters and T4 + other requirements such as IELTs, etc.

Best of luck,

 

[vvbbe]

Thank you for your valuable comment.

I am in an Independent Contract basis with an employer. I am getting confused with the term Independent Contractor, it is a full time job and the contract is for 1 year (extendable). But, could you please suggest whether I will be able to get points (Canadian experience) as an Independent Contractor? I want to get the points as my current score is not helping. But the company told that they will not process my tax, I have to process it.

Your answer is much appreciated! Have a great day!

 

[akil_f1]

Thank you for your valuable comment.

I am in an Independent Contract basis with an employer. I am getting confused with the term Independent Contractor, it is a full time job and the contract is for 1 year (extendable). But, could you please suggest whether I will be able to get points (Canadian experience) as an Independent Contractor? I want to get the points as my current score is not helping. But the company told that they will not process my tax, I have to process it.

Your answer is much appreciated! Have a great day!

so are you working as an contractor for a company ? if so are you getting your pay after paying IT , CPP , EI ?
if the above is done , yo will get T4 and NOA which can be used for immigration or if your getting T5 meaning a self employed you would not qualify for cec immigration

 

[Naheulbeuck]

Thank you for your valuable comment.

I am in an Independent Contract basis with an employer. I am getting confused with the term Independent Contractor, it is a full time job and the contract is for 1 year (extendable). But, could you please suggest whether I will be able to get points (Canadian experience) as an Independent Contractor? I want to get the points as my current score is not helping. But the company told that they will not process my tax, I have to process it.

Your answer is much appreciated! Have a great day!

Since you mention GST, i am guessing that you are paid a fee for your services and not employment income, your payment is likely split between gross revenue and hst/gst in which case you report your income in schedule 2125, statement of business or professional activities (in your 2015 tax return).
If that's the case and you therefore do not get a T4, you are not considered to be an employee of the company but more like an external consultant. In this case it is going to be quite a struggle (or impossible) to use your experience for CEC.

 

[jes_ON]

Let me tell you my background a bit: So, I joined a company as a Independent contractor for 1 year and I want to use this experience for CEC express entry. For this reason, I don't want to incorporate myself (so that I probably will be able to use the 1 year as an employment), now considering this situation, should I claim the GST (Well, to be honest I am not sure of this thing, can anyone please delve it a bit and tell me why will they give me GST?)? or I just should claim the money from the employer (or hiring company) the amount that I am supposed to get considering my hours of work?

First - there is a difference between an "independent contractor" and a "contract employee." A contract employee has term-limited employment - it is not considered "permanent" employment, but it is employment, with the employer taking the statutory deductions (e.g. taxes, CPP) out of the wages - you get a T4 at the end of the year for reporting on your tax return.

An independent contractor is generally considered "self-employed." You do not have to be incorporated to be self-employed - many sole proprietors are not incorporated, but they are still self-employed. They have "clients," not employers, and generally have to pay their own taxes, it is not taken out of their business income. SELF-EMPLOYMENT does not count for Canadian experience - either for EE CRS points, or for CEC class experience.

In some industries, it is a common contractual arrangement to be "hired" as an independent contractor, but you work exclusively for that client and are in what looks like an employer-employee relationship. From a contractual perspective you are self-employed, but in reality, you are more like an employee. The CRA has a process called "requesting a ruling" where you ask the CRA to determine whether you are self-employed or an employee - If the CRA determines you are in an employer-employee relationship, you can use the experience for your PR application, but there is a time limit to the request, and it may have implications that displease your client/employer, so read carefully:
http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-e.html

If you are receiving GST as part of your pay, your client "employer" definitely considers you to be self-employed. If you earn more than 30K in a year (4 consecutive quarters), then you (your business) has to register for a GST account and pay GST on your business income. That is why your client is paying GST... and in this case, you are DEFINITELY self-employed, and will have little to no chance of having the CRA rule that you are in a defacto employer-employee relationship ...
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rgstrng/menu-eng.html

You can quickly get into a heap of trouble with the CRA if you don't know what you're doing RE reporting and paying taxes. I strongly recommend getting some professional help to make sure you are meeting your tax obligations - at the very least, go get a consultation with H&R Block or similar...