# Tax Advise for Expat in Canada



## integramania (Jan 18, 2016)

Hello Everyone,

Just realised there's a specific thread on taxes and I'm reposting it here.

This is a pretty good forum to get to know how things work being in a different country. Many knowledgeable people who are ever willing to help. Appreciate that.

Anyway I'm a new expat from Asia working in Canada and would like to seek some advise regarding taxes and see if anyone has been in my situation before. 

Basically I get a salary and company provides a house and car due to it being an overseas posting. They give me an allowance for the actual value of the house rent and car lease that is banked into my account. The house agent and car financing company just takes it off my bank account. So when the payroll is run by a third party agency it looks at everything being like salary. ie. the house and car becomes taxable benefits. This affects the actual take home salary.

My question is:
1. How can this be done in such a way that the company covers the tax portion of the allowances? So I only pay tax for salary.
2. I asked CRA if instead of the allowances being banked into my account and paid off, can the payment be taken off directly from the company's bank account instead. Their reply was it will still be tax since its a benefit for me

Anyone has a way to handle this? Tax is to be paid but how can it be done so that the company pays for that portion? Having a house and a car is a prerequisite for a foreign transfer here hence if the employee has to pay the tax for those it's not really logical.

Hope someone can share their experience. Thanks everyone.


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## Nononymous (Jul 12, 2011)

Rent and car allowance are a taxable benefit, it doesn't matter if it comes from your account or a company account, you'll owe tax for it. The only thing you could do, I imagine, is figure out how much that tax is going to be, then ask your company to reimburse you for the amount.


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## integramania (Jan 18, 2016)

Nononymous said:


> Rent and car allowance are a taxable benefit, it doesn't matter if it comes from your account or a company account, you'll owe tax for it. The only thing you could do, I imagine, is figure out how much that tax is going to be, then ask your company to reimburse you for the amount.


Hi there,

Thanks for your input. The only thing is how would that reimbursement be channel over? If its as a payment then it's taxable. If its an expense which is not taxable but I would imagine it needs to have some supporting receipt or else it would not qualify? Have been trying to figure that part out.

Also to see how others get this sorted out with their companies.

Cheers


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## Bevdeforges (Nov 16, 2007)

If your employer is paying for housing and a car, then the value of those services are considered income taxable to you no matter how you structure the actual payments. If they reimburse you for the additional tax those perks create, then the reimbursement is also income to you.

Some companies will offer an expat employee "tax equalization" which consists of a sort of grossing up of all the additional items of income, plus reimbursement of the additional tax (and of the additional tax on the reimbursement) so as to assure that the expat is on an equal basis with whatever his income situation was back in their home country. This is (as you may imagine) a very expensive proposition for the employer - usually it is organized through one of the large, international public accounting firms with expertise in this sort of thing. Oh, and the large, international public accountant then does your taxes for you (another expense that has to be lumped into the calculation because that, too, counts as income for tax purposes).
Cheers,
Bev


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## integramania (Jan 18, 2016)

Bevdeforges said:


> If your employer is paying for housing and a car, then the value of those services are considered income taxable to you no matter how you structure the actual payments. If they reimburse you for the additional tax those perks create, then the reimbursement is also income to you.
> 
> Some companies will offer an expat employee "tax equalization" which consists of a sort of grossing up of all the additional items of income, plus reimbursement of the additional tax (and of the additional tax on the reimbursement) so as to assure that the expat is on an equal basis with whatever his income situation was back in their home country. This is (as you may imagine) a very expensive proposition for the employer - usually it is organized through one of the large, international public accounting firms with expertise in this sort of thing. Oh, and the large, international public accountant then does your taxes for you (another expense that has to be lumped into the calculation because that, too, counts as income for tax purposes).
> Cheers,
> Bev


Thanks....yeah this seems like a very expensive way. 

Or is there some who actually put in a % to the total salary to try and cover all these additional taxes so that the nett pay is more appropriate?

Yeah would like to have the tax equalization done as well. Only can be done by the big boys accounting firms usually? How about the independent or smaller firms?

Thanks for your replies. Appreciate it


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