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Expat living abroad Diff countries every 6 months do I pay taxes?

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Andy Bell

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I am a Canadian that loves to travel and I have been away from home for some years living off my drop-shipping business. I was wondering if anyone knew whether or not I should be paying taxes on my earnings.

I have checked the government website and they mention that after not living in your country for over a year you can file your last tax return and not pay taxes unless you are making Canadian revenue, on that revenue you do pay taxes.

Does this mean since i dont have permanent residency and i keep hoping countries I essentially do not have to pay taxes until I move back home or declare the assets like a house later on?
 

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Supercar

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It appears that if you are a Canadian, and your company that is paying your salary is registered in the Bahamas, then you would need to pay the Bahamian business and personal income taxes (if there are any).

If you had been a US citizen, then you'd still have to pay the US taxes too because the US government thinks they own you.
 

Andy Bell

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It appears that if you are a Canadian, and your company that is paying your salary is registered in the Bahamas, then you would need to pay the Bahamian business and personal income taxes (if there are any).

If you had been a US citizen, then you'd still have to pay the US taxes too because the US government thinks they own you.

Thank you thats what I had gotten out of it. It does bring up an interesting conundrum, if one of my biggest sites is using Shopify (based in Canada) does that mean a Canadian company is technically paying me and I need to declare these profits? Or since the majority of my customers are non Canadian are they the ones technically paying me and shopify is just a payment processor in the governments eyes?
 

Supercar

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Thank you thats what I had gotten out of it. It does bring up an interesting conundrum, if one of my biggest sites is using Shopify (based in Canada) does that mean a Canadian company is technically paying me and I need to declare these profits?
If Shopify is paying you directly and sending you the Canadian equivalent of Form 1099-Misc, then you are generating a Canadian income. But I bet things are different if Shopify is hosting a site of a foreign company incorporated in the Bahamas.

Disclamer: I am not a tax advisor, so be easy on me if it turns out that I know nothing about this subject :)
 

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Thanks for the call-out.

I focus on US taxes, so no help here. I would look for an accountant from your country that is familiar with international taxation.
 

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You're going to want to hire a CPA that specializes in expat taxes and ask him these questions. I say a specialist because most CPAs will have a very basic understanding on how taxes work for an expat work.

Granted it's probably easier because you're Canadian, but tax mistakes can get very expensive in a short amount of time. Definitely not something you want to get wrong.
 

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if one of my biggest sites is using Shopify (based in Canada) does that mean a Canadian company is technically paying me and I need to declare these profits?

They are one of your expenses not your employer. You are probably confusing that as they are processing your customer payments?

Living outside of Canada may be one requirement, have you checked what other boxes you might have to tick? Mind you, you don't have the biggest hurdle, being American where they own your arse tax wise regardless of where you live.

You say you have been a digital nomad for several years. How have you structured your business?

This video is speaking about Freelancers but there is a lot of cross over information here and he has a wealth of other video's about tax affairs for digital nomads. Well worth subscribing to. However you do need to find a qualified accountant as @CareCPA says.

View: https://www.youtube.com/watch?v=Su_PFohvIgo
 

splok

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I am a Canadian that loves to travel and I have been away from home for some years living off my drop-shipping business. I was wondering if anyone knew whether or not I should be paying taxes on my earnings.

I have checked the government website and they mention that after not living in your country for over a year you can file your last tax return and not pay taxes unless you are making Canadian revenue, on that revenue you do pay taxes.

Does this mean since i dont have permanent residency and i keep hoping countries I essentially do not have to pay taxes until I move back home or declare the assets like a house later on?

Not a lawyer or CPA, but a couple of points/questions that might help you run things down:
- If you have some Canadian sourced income but aren't a tax resident in Canada, do you have to file a return on your worldwide income, or just the Canadian sourced part of it?
- What exactly makes something "Canadian sourced" income? Shopify is essentially your payment provider, so there may be an argument for the location of the end buyer being the source. This is probably explicitly defined, so don't assume without being sure.
- In the US, to get the exclusion for living abroad, you need to establish a non-US tax base. You should find out if anything similar applies to you.
- It is common for other countries to consider you a tax resident after spending a certain amount of time there, but it's different for all countries, so be sure you know the tax rules of anywhere that you plan to spend much time. Whether they enforce it on a nomad is a different question, but playing it safe is probably a good idea with any country's taxman.
 

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As a Canadian you can easily structure your business and life to be 100% tax free.

There are several steps you need to take though to get a proper structure in place, file to renounce residency status, obtain residency in a country that does not tax worldwide income, etc.

If you don't make the changes you are taxable in Canada.

Pm me if you want to chat.

Sent from my VTR-L29 using Tapatalk
 

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Andy Bell

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Thanks everyone some amazing responses much more than I expected to be honest. This forum and community is amazing.

Regarding my business structure I have nothing yet. I started off doing some affiliate work with amazon and then started really making more in shopify, now getting to a point where I replaced my salary and the amount is getting too high not to get noticed by revenue Canada and I would prefer not to be audited!

So the business is just my online websites intellectual property it is not registered as a Corp or sole proprietorship.

I receive payment into my Canadian (US Currency) bank account from shopify.

I live abroad and cross a border once every 6 months to keep my tourist card legal. Technically I am an international citizen now since I have been abroad for more than 5 years.

From what I have seen now my next step is to file my final tax return and then its a bit muddy on if I can keep just crossing borders every 6 months and being a world nomad.

If anyone has a Canadian accountant that specializes as @RazorCut suggests or an idea where to look (bracing myself for "google it") haha let me know!
 

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