Tax assessment

[Yomexy]

I am a Canadian permanent resident (my family lives in Canada), I however work outside Canada and shuttle.
For my 2019 tax, I got a mail from CRA to send in some documents to assess my foreign tax paid, which I did.

CRA got this reassessed and filled in my foreign Gross income as my total income earned, surprisingly, CRA also filled the same foreign gross income as my Net income. This was strange to me...

This will affect my benefits (including CCB) as every income calculation is now based on my Gross...how do I go about it please and is this normal?
Doesn't CRA take (foreign) net income into consideration?


Thanks

 

[scylla]

I am a Canadian permanent resident (my family lives in Canada), I however work outside Canada and shuttle.
For my 2019 tax, I got a mail from CRA to send in some documents to assess my foreign tax paid, which I did.

CRA got this reassessed and filled in my foreign Gross income as my total income earned, surprisingly, CRA also filled the same foreign gross income as my Net income. This was strange to me...

This will affect my benefits (including CCB) as every income calculation is now based on my Gross...how do I go about it please and is this normal?
Doesn't CRA take (foreign) net income into consideration?


Thanks

How are you defining your foreign net income? Do you mean after tax income? If so, then the answer is that CRA takes your pre-tax gross income (not net) into consideration. CRA does its calculations based on gross worldwide income. So yes, what you are experiencing is normal.

 

[Yomexy]

Thanks a lot...I appreciate your response.

The net income I am referring to is not me taking away my tax income from my gross income (not Gross income-Tax income), but taking away the deductible (basic living expense from the gross and other deductibles). For instance, a line on my foreign assessment explicitly showed my Total taxable income which is less than my gross income (because basic living expenses had been deducted). This is the line I usually declare to CRA as my total income (as every country-including Canada, has basic deductible before tax is applied). But when CRA would reassess, they placed my gross income under gross income line and also placed my gross income under net income line (which gives no chance for deductibles for me).

Thanks

 

[scylla]

Thanks a lot...I appreciate your response.

The net income I am referring to is not me taking away my tax income from my gross income (not Gross income-Tax income), but taking away the deductible (basic living expense from the gross and other deductibles). For instance, a line on my foreign assessment explicitly showed my Total taxable income which is less than my gross income (because basic living expenses had been deducted). This is the line I usually declare to CRA as my total income (as every country-including Canada, has basic deductible before tax is applied). But when CRA would reassess, they placed my gross income under gross income line and also placed my gross income under net income line (which gives no chance for deductibles for me).

Thanks

It would be your gross income that is declared in your CRA tax return (not net). You have to declare your gross foreign income in your Canadian tax return. If you've been declaring your net income as your total income, then you've been claiming the wrong amount. The credit for basic living expenses that is deducted by your home country against your gross income only applies to the tax return for that country. You don't get to carry this credit over to Canada. You already get a credit for this in Canada separately.