There are many different options available to people who are looking at offshore investments to help them reduce the tax that they will have to pay in a country. But one as to ensure that only legitimate route is chosen as there are many illegitimate activities that can be done when we consider offshore tax planning. It is also known as international tax planning as you take your funds to an international location to operate a business or to invest in an existing business.

If you are a Canadian Resident, then you are taxed on your worldwide income and filing of returns to the Canadian Revenue Agency (CRA) is mandatory. If you are a non-resident, the taxation policy is different and you have to declare all Canadian income while filing the returns. But to know how to file your taxes, you first need to determine your residency status for tax purposes.

If you are planning on doing some offshore tax planning, by investing some money offshore, then you should be aware that almost all countries have signed tax treaties with Canada, and if you are a Canadian Resident, then income from these investments will also be calculated and considered as income and will have to be declared while filing the income tax returns. But if you are a non resident of Canada, there are options for you to do some international tax planning, but it is always better to avail the services of an income tax expert to help you.

There is a basic thought among tax payers that using tax haven countries is a form of international tax planning and that they will be able to project them offshore investments if they are brought up by the tax authorities. The fact is that international tax planning is very complex in nature as it will involve a lot of procedures and approvals to be put in place in a legitimate way and it is definitely not in any way related to the countries that provide a haven for people who are looking to save tax in an illegal way. International tax planning is considered to be a legitimate way to enhance your business and personal assets while ensuring safety of the assets.

It’s a recognized proven fact that absolutely no taxation foibles tend to be clear to see, so it’s usually easier to look for the aid of an income tax expert that will help you using the taxation methods. Likewise non-resident taxes advantages aren’t simple because there are plenty associated with clauses as well as rules involved with all of them. Consequently in order to take full advantage of the advantages that you’re walking to be the no citizen of your house nation, get the actual providers of the taxes advisor who’s a specialist within just offshore taxation.

In most countries there are different types of taxes and levies that must be paid. There are often many variations that exist in states, countries and provinces all around the world. Taxes in Canada are no exception, as there are several sorts that exist that must be followed.

Companies and corporations pay tax on profit income and on capital. These make up a relatively small portion of total tax revenue. Tax is paid on corporate income at the corporate level before it is distributed to individual shareholders as dividends. A tax credit is provided to individuals who receive dividend to reflect the tax paid at the corporate level. This credit does not eliminate double taxation of this income completely, however, resulting in a higher level of tax on dividend income than other types of income. (Where income is earned in the form of a capital gain, only half of the gain is included in income for tax purposes; the other half is not taxed.) Corporations may deduct the cost of capital following capital cost allowance regulations.

Corporate tax is collected by the CRA for all provinces and territories except Quebec and Alberta. Provinces and territories subject to a tax collection agreement must use the federal definition of "taxable income", i.e., they are not allowed to provide deductions in calculating taxable income. These provinces and territories may provide tax credits to companies; often in order to provide incentives for certain activities such as mining exploration, film production, and job creation.

All resident corporations have to pay Canadian corporate tax and file the T2 return except charities that are registered. T2 return has to be filed by the corporation even if they have no corporation tax to pay and non-profit organizations, inactive corporations and tax-exempt corporations should file the returns mandatorily.

If you want to pay your corporation tax promptly and file the T2 return on time, you need to know the tax year end of your corporation. The fiscal period of a corporation or the corporation's tax year has to be less than 53 weeks. New corporation can choose the tax year end while filing the first T2 return and the subsequent tax year can be calculated according.

The final area of concern will be the importance of hiring a professional accountant. As a business owner, the CRA doesn't look kindly on businesses preparing their own taxes. You should have a professional accountant manage all of your books each and every year. In addition to professionally filing your corporate tax return, they will also be able to provide you with important tax advice that you should take advantage of.

Nonresident tax is levied only on the income that is received from sources in Canada and the worldwide income of the nonresident is not considered for taxation. For most of the nonresidents that income tax is deducted at source from the gross pay when being paid to them by the employer and the tax that is deducted is deposited by the employer to the Canadian Revenue Agency (CRA). You will first have to determine your Canadian residency status with regard to taxation to know if you are liable to pay non-resident tax.

You will require obtaining a few forms like the Canadian T4 form that is supposed to be given to you by the Canadian employer if you have to file nonresident tax. The T4 form will have a summary of all your earnings and deductions that have been made by the employer and are usually mailed to the address that is given by the nonresident to the employer. These forms are important for international tax filing and therefore ensure that the correct address is given to the employer to receive them. Employers will issue the T4 form generally between January and March so that you can file the non-resident tax return by April 30th.

Non-resident corporations who have business interests in Canada and generate revenue from a business that is located in Canada will have to pay corporate tax to the Canadian Government. The clauses that govern the corporate tax in Canada are a bit complicated and the complications will only increase if you are a non-resident. If you are carrying on business in Canada either directly or indirectly then the profit that is earned out of the business will be subject to taxation. Like in income tax, the residency status of the corporation will have to be determined and the corporate tax that is levied will be based on the residency status of the corporation.

The nonresident taxation policy in Canada considered 15% tax deduction at the source to be a rough estimate of the nonresident tax liability of the person. If you are covered by treaty protection or can show that your expenses are bound to be more you can apply for a waiver or tax reduction request to the concerned department. A waiver application will have to be filled and submitted to the tax services office that is responsible for tax related functions in the area that you provide services in.

Many find the process of preparing for, and filing their taxes bothersome, and for these individuals, the best advice one can give would be to seek the advice of a professional, whose job it is to be aware of the latest changes in tax laws. A certified tax accountant is trained to know how to best reduce your tax burden, or increase your refund, all while reducing the stress of tax season.

On becoming a resident of Canada, an individual’s world income is automatically subjected to Canadian tax. However, there is a specific exception, when an immigration trust is used to hold foreign investment assets. For many years, Canada has been a tax haven for high net worth individuals who chose to immigrate to Canada through the establishment of so-called “immigration trusts”.

The Income Tax Act (Canada) allows a new resident of Canada to establish an offshore trust for up to five taxation years during which time the income earned within the immigration trust structure escapes Canadian taxation even if capital distributions are made back to the immigrating settler of the trust. This has been a very attractive vehicle for wealthy individuals to utilize in order to come to Canada to obtain a Canadian passport since the residency requirement for such a passport is only three years.

However, the protected status enjoyed by immigration trusts has survived, offering new residents to Canada a significant tax-savings opportunity in their transition to Canadian tax residency. An immigration trust is simply a non-resident trust, established in a foreign tax jurisdiction that holds foreign investment assets.

An immigration trust can be established prior to the individual becoming a resident of Canada or at any time within the first 60 months of Canadian residency. However, because the 60-month tax-free period commences at the time Canadian residency is established, the tax-free accumulation of income and capital gains in the trust is maximized when the trust is set up prior to becoming a resident of Canada.

Even after the five year exemption is over and the immigration trust becomes subject to tax in Canada, it may continue to serve as an asset protection trust for the benefit of multi-national families residing in and outside Canada.

Once the trust is established, the immigrating individual can transfer various foreign assets to the trust, including an investment portfolio or real estate. During the first five years of the immigrant’s Canadian residency, income and capital gains can accumulate tax-free in the trust. At the end of this period, if the trust is still in existence, it loses its tax-free status and is treated in the same manner as a Canadian resident trust.

In addition to the tax savings, immigration trusts can provide other benefits, including creditor protection for trust assets, reduction of taxes and probate fees on death, and privacy and confidentiality of personal financial information.

Systems of taxation vary among countries, making generalization difficult. Specifics are intended as examples, and relate to particular countries and not broadly recognized multinational rules. Taxes may be levied on varying measures of income, including but not limited to net income under local accounting concepts, gross receipts, gross margins (sales less costs of sale), or specific categories of receipts less specific categories of reductions.

The tax is imposed on the residents of a particular country earning an income and residing in that country, both as an employee and as self-employee, engaged business operations to make profits and corporations and commercial organizations based in that country, commercial organizations and foreign-based corporations but engaged in business operations to make profits within the territories of that country.

Thereby, it is important that you understand the tax related laws and rules of your home country as well as of the new country, where you are planning to settle. In addition, you will need to focus more towards international tax planning.

Offshore tax strategy is not necessarily as daunting as it may seem. An experienced corporate tax-planning advisor will guide you through all the required steps. It is important to consider different options and such as advisor should assist you do this and develop a suitable strategy. Your strategy should be formed with full awareness of the advantages or benefits, as well as disadvantages, and risks, of each the different options available to you.

An effective, well-structured international tax planning can legally benefit an international business in a number of areas. It can be a complex process, especially when multiple jurisdictions are involved. There are a number of fundamental issues to consider before deciding on an optimum strategy.

In order to carry on an international tax planning appropriately, an organization needs to develop a sound global tax strategy that helps in catering to global business objectives. The process begins with setting up a consolidated understanding of an enterprise's business and financial condition, its international operating strategy and where and how it plans to function. With these relevant inputs an international tax consultant can assist a company to come up with an overall global tax strategy that is practicable and has sound business sense. Global tax planning for certain cases can be approached in a compact manner considering the organization's broader global tax and operating strategies.

A simple search through the net is enough if you want to get associated with professionals for suitable international tax preparation strategies. Apart from corporate houses, individual accountants are also come up in the online as well as offline market to help you out in this regard. To come across with a branded and esteemed company or authentic accountant, all you are advised to do is make online search. So, do not waste your time? For exclusive services by professionals at discount rates, get in touch with a reputed and known company.