Posting Policy-Out of Canada (OUTCAN) [MERGED]

[dimsum]

Captloadie is absolutely right - you file taxes as a Factual resident of Canada, normally in the last province you were posted. Therefore your bank accounts, your house (if you kept one), your storage items, etc all add up to "substantial ties" back to that province. If you were on IR prior to posting, this could probably be used to change the equation.

Thanks for the info.  I was wondering how this would work in my case though; I don`t plan on storing anything here, have sold my house and my bank account (TD) has never been changed since I got it in ON.  I have opened an HSBC Advance account in BC and plan on using it as my pay funnel (with the instant transfer to HSBC Australia.)  Would I still be able to claim factual residency in BC due to my account only?

(I'll also give CRA a shout and confirm.)

 

[405sqn]

I'm no expert on all of the rules, I can only relate my experience. That said, it looks like you are being posted from BC and will keep your ties with that province. Based on this, chances are good that filing BC taxes will be the safest route. As you note, a quick consult with CRA will yield the facts.

Cheers.

 

[armyvern]

...
If you were on IR prior to posting, this could probably be used to change the equation.
...

An IR posting will not change the equation. Having done many IR postings now, and having spoke with CRA directly on the issue, an IR member is supposed to be filing taxes based upon where the principal residence (ie the family) is located.

Ergo, if your residence is in Gagetown, NB and your are posted IR to Edmonton, AB - you should be paying NB taxes for the duration of your IR posting (that's where you've told the CF your principal residence is at and ergo why you are entitled to IR); if you then found yourself and your family posted outcan to another spot, your last primary residence is still considered NB where your ties are/were 'officially' at.

Edited to add: Yep, I know there's IR pers in different provinces claiming taxes at whichever is the lowest tax rate. No sympathy from me coming when they get nailed claiming AB if their family and home is in NB for example. Would like to see the CF nail them with fraud too for claiming IR in the CF (stating monthly on their claims that family and residence is NB) for being separated from their principal residence, but claiming that principal residence is in AB (for example) when tax time comes.

 

[dimsum]

More for info than anything else (in case some reads the board afterwards), this is what CRA had to say:

If you sell your house and have nothing in storage (ie. your only residential tie to Canada is a bank account), you are a Deemed Resident.  I think the kicker was if you had a house or stuff in storage.

 

[armyvern]

More for info than anything else (in case some reads the board afterwards), this is what CRA had to say:

If you sell your house and have nothing in storage (ie. your only residential tie to Canada is a bank account), you are a Deemed Resident.  I think the kicker was if you had a house or stuff in storage.

Well, most outcan postings see stuff (perhaps not everything, but certainly some) placed into LTS at the location where the last principal residence is located.

 

[405sqn]

For ref, recommend anyone looking for a CRA opinion contact the International Tax section:

http://www.cra-arc.gc.ca/cntct/international-eng.html

 

[405sqn]

An IR posting will not change the equation. Having done many IR postings now, and having spoke with CRA directly on the issue, an IR member is supposed to be filing taxes based upon where the principal residence (ie the family) is located.

Good point. I was (naively) assuming that pers were filing their taxes based on the location of their family to start. Even then, some might try to file the lower tax place upon posting OUTCAN. So you're right, those trying to get out of higher tax payments are probably already doing it....

 

[Zoomie]

If you sell your house and have nothing in storage (ie. your only residential tie to Canada is a bank account), you are a Deemed Resident.  I think the kicker was if you had a house or stuff in storage.

This would apply to OUTCAN pers posted to USA.  We are all considered deemed residents - as we are not permitted LTS and almost all of us sell our homes before coming down here.

In the end, I'm not too concerned about an audit - the tax rate that a deemed resident receives is equivalent to what a factual resident of Ontario would get.  Except that I won't be on the hook to pay any of the criminal OHIP extras that Ontario currently bills CF members and their families.

 

[captloadie]

I did my taxes both ways last year, just to see what the difference would be. Even when paying the max OHIP tariff, my tax return was larger as a factual resident than a deemed resident. That being said, it will be different for each individual.

On a separate note, I'm now starting to research all the requirements for returning to Canada. Who would have thought getting back would be three times more difficult than leaving. Especially when my new home will be in Cold Lake 

 

[armyvern]

I did my taxes both ways last year, just to see what the difference would be. Even when paying the max OHIP tariff, my tax return was larger as a factual resident than a deemed resident. That being said, it will be different for each individual.

On a separate note, I'm now starting to research all the requirements for returning to Canada. Who would have thought getting back would be three times more difficult than leaving. Especially when my new home will be in Cold Lake 

Good luck!!  >

 

[405sqn]

Found this page on the internet to help frame the situation regarding how Canada Revenue Service looks at individual situations for tax purposes when posted OUTCAN.  "Residential ties" remains the key determining factor for figuring out whether to file as a Factual Resident or a Deemed Resident, for which specific advice from their experts is the best method.  Note that these are the only two choices available for a CF member posted abroad.

You'll see a section at the bottom for CF Overseas School Staff - these are the civilian teachers at schools such as the NATO School in Geilenkirchen, not CF members.

Happy reading!

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/gvt_mpl-eng.html

 

[KennyE]

For those who have taken OUTCAN postings in Europe, what was the most difficult part of living there? Was it the initial move and getting settled in? I have two school age children and I think it would be easier for them to live in a country that speaks English or French as they are pretty fluent in French.

 

[405sqn]

It depends on the country, as each one of them has its own particular quirks.  In Italy, the biggest issues surrounded bureaucracy, driving habits and language (and I'm quite good in Italian).  You have to learn how to set those issues aside, accept that you will never change their ways and enjoy your brief stay in their country/culture.  If you let the annoyances get to you, you'll end up being bitter and wanting to go home early.  The only loser in that deal is you.

 

[Transporter]

Hi all. Have been a Forum lurker for some time now and have finally decided to become a full card carrying member by registering for an account  . I read an interesting article [deleted] today about possible cuts to OUTCAN benefits i.e. FSP, housing allowances, etc. Anyone have any inside info on what is being kicked-around in Ottawa in this regard? Is there anything to it or is it just rumour? We can all speculate but am looking to see if anyone has any factual info on what, if anything, is being considered.

Many thanks.

Edited to meet requirements of this post. Topic discussion may continue, origin article not to be mentioned. - Milnet Staff

 

[PuckChaser]

Just read the article, and if its true, wheres the issue? FSP should be a taxable benefit unless you're in a Risk/Hardship 2 area. Is FSP nontaxable for those in Europe currently?

Regardless of the cuts, there are always people willing to go OUTCAN as long as it remains financially viable for their family. I have a feeling that if they are cutting benefits, they'll be doing it just like IR, attempting to remove the "gravy train" aspects.

 

[dimsum]

I haven't seen anything come from the OUTCAN clerks regarding cutting benefits yet, but frankly I wouldn't be surprised.

 

[dapaterson]

Apparently DFAIT is changing rules for some benefits.  As those benefits are the same for CF members, the DFAIT changes will impact CF members as well.

 

[Transporter]

Just read the article, and if its true, wheres the issue? FSP should be a taxable benefit unless you're in a Risk/Hardship 2 area. Is FSP nontaxable for those in Europe currently?

Regardless of the cuts, there are always people willing to go OUTCAN as long as it remains financially viable for their family. I have a feeling that if they are cutting benefits, they'll be doing it just like IR, attempting to remove the "gravy train" aspects.

If there is anything factual about what I read, the "issue" is that this continues a trend of cutting benefits to service members is an effort to treat us no differently than any other public servant, and I believe there is a distinction there that ought to be recognized. So what if the government is looking at changing DFAIT benefits. Why should those changes have to be applied to military as well? It just seems that all we hear about "benefits" these days is cuts and elimination of entitlements.

Why, in your opinion, should FSP be taxable (and yes, all FSP whether Ops FSP or OUTCAN posting FSP is non-taxable)? Are they paying PuckChasers that much money these days that they want to pay more taxes? I don't know about you, but I pay plenty of my hard-earned paycheck in taxes... and I don't think I'd consider FSP a gravy train.

 

[dapaterson]

There is a tremendous sense of entitlement in certain sectors of the CF.

A Reg F Cpl (no spec) makes in excess of $56K before any allowances.  Not bad for someone in their early 20s with minimal education and experience.  Every Reg F Maj is paid in excess of $100K per year before any allowances.  Allowances such as LDA and SDA are paid for a posting message, regardless of whether or not the individual actually experiences the conditions that the allowance is supposed to compensate for.

I have not seen any details on these proposed changes.  However, CF members would be hard pressed to identify how they are hard done by.  DFAIT personnel have more restrictive retirement conditions, lower rates of pay... if anyone should be complaining about these changes it's DFAIT staff, not CF members.

 

[PuckChaser]

Why, in your opinion, should FSP be taxable (and yes, all FSP whether Ops FSP or OUTCAN posting FSP is non-taxable)? Are they paying PuckChasers that much money these days that they want to pay more taxes? I don't know about you, but I pay plenty of my hard-earned paycheck in taxes... and I don't think I'd consider FSP a gravy train.

My LDA is taxed as I'm posted to a field unit. Anyone posted to a ship has their SDA taxed. If you're posted OUTCAN, why should your FSP be a non-taxable benefit when everyone else has to pay tax because of where they are posted? If the guys that were in Camp Mirage were paying tax on their FSP/Risk/Hardship, there is no reason why someone in an Embassy or NATO headquarters shouldn't be paying tax on their FSP. This is especially true if we're getting more out of the same FSP that the DFAIT employees get. Why are you so special that they're taxed and you aren't while working side by side?