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I am a Canadian permanent resident and was working and living in Canada full time for a Canadian company. Recently I have moved back to my home country (India).

However I need to keep working for my Canadian company. I’m trying to figure out ways to avoid paying taxes in both countries and getting paid.

How do I go about this? Certain options come to mind:

1) Getting paid in my Canadian bank account as a contractor. (I think this will trigger taxes in canada which is fine but would definitely want to avoid taxation in India)

2) Getting paid in my Indian bank account (this will definitely triggers taxes in India but not in Canada)

Am I even allowed to work as a contractor if I am not physically present in Canada? What kind of taxes will I be looking at?

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  • You probably need to get an accountant with relevant international experience. Tax liability will vary according your residency for tax purposes (not necessarily where you're living), the amount of taxable income, any double-taxation relief agreed between the countries, any allowances you can claim in one or both countries, and other factors. Suffice it to say that to be legal you'll need to pay tax in at least one country, possibly both.
    – CatchAsCatchCan
    Commented May 2, 2019 at 3:52

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You have two things to think about.

First is the tax implications of your move. This includes your requirement to prove that you will have ceased to be a resident of Canada for tax purposes. You will need to understand that you do not easily escape the clutches of the people on Data Centre road. CRA has a long set of rules for determining if you're still deemed to be a resident of Canada for tax purposes. Being employed by a Canadian employer while outside Canada is a tie to Canada, which is one of (Secondary residential ties) criteria.

Getting your pay sent to an Indian bank account does not magic this away.

Becoming an expat from Canada is a serious issue and requires that you engage a lawyer who knows something about the matter.

This is a fairly good document which you ought to read very carefully.

https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-1-residency/income-tax-folio-s5-f1-c1-determining-individual-s-residence-status.html

Form NR73 can also help you work through the problem in preparation.

The second thing you need to consider is your fancy that you're a contractor. CRA has quite clear rules about distinguishing contractors from employees. You're probably not a contractor.

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4110/employee-self-employed.html

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4110.html?wbdisable=true

https://turbotax.intuit.ca/tips/how-to-determine-if-you-are-an-employee-or-independent-contractor-6111

https://finance.utoronto.ca/policies/gtfm/human-resources-payroll-and-benefits/employee-versus-independent-contractor-and-taxation-of-payments-hris-vs-fis/

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    If the OP is an employee, not a contractor, there are other issues to consider. Employment law is different in Canada and India, so a Canadian company may not know what paperwork to do, taxes to pay etc. for an India-based employee.
    – Patricia Shanahan
    Commented May 5, 2019 at 18:46

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