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On behalf of a pensioned Canadian friend living now in Berlin, Germany
I have been asked to gather Informationen on how to deal with Canadian Tax affairs properly.


Situation:

  • retired with Canadian Pension, where basic taxes are deducted
  • any other income comes from Canada
  • no income in Germany (unknown to German Tax Authorities)
  • permanent, non working, residence permit and private insurance

After leaving Canada, has delt with all queries dealing with his last tax year of employment per Telefon, hoping that that has now been resolved.
(with each new question coming about 2-3 months after the last was answered per telephone)

He has looked for a specialist for foreign tax affairs, but each conversation ends when Canada is meantioned.

He assumes that a yearly tax return must be filed, but is not sure of any of the details.

As a 72 year old, he would prefer not to have to deal with this himself, but if a professional cannot be found, to at least gather enough information to get (maybe) 70% of it right.

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When you say 'each conversation ends when Canada is mentioned' I hope it isn't too abrupt an ending. I'm assuming that you're told that their practice doesn't deal too much about Canadian tax. It would be nice if they could provide a reference to some one in their profession who does.

These other telephone calls, where there are questions, are presumably with CRA.

He will need to consult a Canadian lawyer or accountant about the matter. The big question is how to define the problem, especially as it touches on almost every aspect of your friend's life.

Among other things, your friend needs to decide whether he wants to undergo the process of ceasing to be a resident of Canada for tax purposes.

That could reduce the amount of taxes deducted from source by a wee bit. But there might be deemed dispositions which could affect things. Your friend might have, by his past actions, done stuff which would have been sub-optimal in terms of tax implications (i.e. not exercised his Westminster rights to minimize his taxes to the fullest legal extent).

Does this chap have a RRSP? Did he convert his RRSP into a RRIF? Taxpayers need to do that before the end of the year in which the taxpayer turns 71. Did he have a TFSA? Does he have a TFSA?

There's a tax treaty between Canada and Germany so here's a little bed-time reading: https://www.fin.gc.ca/treaties-conventions/germany_-eng.asp

I'm not sure what you mean by 'unknown to [the] German tax authorities' and I'm not sure if that is a wise move. Your friend might not be interested in the German tax authorities but the German tax authorities might be interested in him. Talking to a German tax lawyer or accountant might be worthwhile, too.

Quoting myself:

"CRA has a long set of rules for determining if you're still deemed to be a resident of Canada for tax purposes. ...

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."

How can I get paid from a Canadian company without living in Canada?

As an editorial comment, 72 is a bit young to be financially infantilized, although I fully appreciate not wanting to deal with the tax people of any nation.

Some more as there's a size limit on comments.

It is unfortunate aspect of modern life that ordinary people need to consume unique, irretrievable, moments of their lives to learn about these sorts of things.

It would be helpful for you to be au fait with the subject matter so you can, ahead of time, think about how to define the problem, what sorts of options are available, what sorts of trade-offs are involved, what sorts of questions to ask when consulting the accountant/lawyer, have a vague idea what is being said to you, and not least, save time and money by not needing someone being paid a fair chunk of change to explain to you an primer on the questions of retirement planning, tax residency, dealing with multiple tax jurisdictions, and tax planning in general.

Is the NR73 needed? I don't know. The wording on the form suggests yes. "Complete all areas of this form if you plan to leave or have left Canada, either permanently or temporarily. Give all the facts about your residency status while living inside and outside Canada."

Here's more exciting bed-time reading, in the form of a document that CRA prepared mostly for professional but I think understandable for the layman. 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

I am not a lawyer (IANAL) or accountant (IANAA).

  • Yes, it was done politly for the reason you gave. They also did not seem to know anybody they could reference. The questions came from different call centers, each seem to be responsible for different aspects. He is still considered a tax resident, since the pension it paid to his Canadian account and needed sums are transferred to his German account. I have sent him a note about your other questions. Thank you for your response. – Mark Johnson May 30 at 4:21
  • Infantilized: sorry for the wrong impression. He is fully aware of the need to deal with this matter properly, thus the search for someone competent to do it. – Mark Johnson May 30 at 5:15
  • From your links, I assume that Secondary residential ties (1.14) fits best. No attempt or intension to change this has been made. My assumption has always been, that a German tax return is need to insure that the paid Canadian taxes covers all possible German taxes owed. Thus the local search to deal with both. – Mark Johnson May 30 at 5:24
  • Is the form NR73 needed if the Secondary residential ties is not being contested? – Mark Johnson May 30 at 5:36
  • The RRSP, RRIF and TFSA forms may very well be the matter of the questions asked previously. I will ask him to gather the 'collection' (with the final results) and scan them in as pdf. These will, no doubt, be needed as history for any accountant that will deal with any future returns (and for any possibly needed German tax returns). Thank you again for giving the needed terminology, making it easier to see through the fog. – Mark Johnson May 30 at 6:03

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