GST is handled completely separately than income tax, despite the fact that you call the same number to ask questions. There are different rules regarding residency status for GST. Meaning you may be a non-resident for income tax purposes but a resident for GST purposes. And residents need to collect and remit GST.

The rules here are a little easier to follow. If you expect to make more than CDN$30,000 in a given year while in Canada, then you need to charge GST. For most consultants, that’s ‘twixt two and four months worth of work so chances are, you’ll need to file.

To collect GST, you need a Business Number which is easy enough to get. Call up CRA at 1.800.959.5525 and they should be able to give it to you over the phone. Here is the gist of what to tell them:

• I am not a Canadian resident but I *am* a Canadian citizen. I will be working in Canada for a period of X months and expect to make over $30,000 during that time. I’d like to apply for a Business Number for GST for the period that I am in Canada.
• I will file GST annually
• I do not need a payroll account
• I am a sole proprietor

They may try to tell you that you need to call the International Tax Office but that’s wrong. The International Tax Office doesn’t deal with GST at all.

Grey areas:

Should I keep my Business Number active after I leave the country?
Probably not. In my experience, it’s pretty easy to deactivate and reactivate it so it’s worth the phone call to deactivate it when you leave. And that’s all you need to do. There’s no paperwork involved. And you do *not* charge GST for any work you perform outside Canada.

Should I incorporate?
My opinion is no, you shouldn’t. The major advantage of incorporation is to lower your taxes which isn’t really an issue for non-residents. More importantly, with you as the major shareholder, it constitutes a major residential tie to Canada, something you should avoid.

** UPDATE ** Setting up a corporation in Canada means the corporation will pay tax in Canada. In my experience, *EVERY* contracting agency will try to pressure you to incorporate. Fair enough, they don’t want to rock the boat any more than you do and dealing with a foreign entity is a warning flag. But stick to your guns. I had to go through three agencies in my last contract before I found one that would accept me. And even then, I had to sub-subcontract.

http://codebetter.com/blogs/kyle.baley/archive/2008/06/17/rehash-canadian-taxes-for-non-residents.aspx

• What habits do you see that originate from your childhood? Well, since I have done a great deal of work on my relationship to money through working with my Coaches over the last two decades, I am finding that I have a great deal of peace in my relationship to and with money today.   I notice abundance everywhere, I celebrate......
• Tax Time Blues It is that dreaded time of year yet again...Tax time. For most, it is simple. They are W2 Employees, taxes are taken out of their paychecks each month, and tax time is just paperwork in which at the end they may get a bit of a refund. This is not......
• Canadian Coins Coins and Paper Money -> Coins: Canada -> Commemorative Whether you are from Canada, or just interested in collecting Canadian coins, there are plenty of options out there and many of these coins are actually quite valuable. Before you get started with your collection, it’s a good idea to know......
• 3 Things You Should Know About Canadian Coin Collecting Coin collecting is something which happens all over the world and has happened all throughout time. It is no surprise there are people who enjoy Canadian coin collecting. These do not have to be strictly for people from Canada. This can include anyone who enjoys collecting coins as there are......
• Comparatively Speaking A Million Dollars is Still a lot of Freaking Money I read a news story recently that reminded me that I hate when I hear, “a million dollars is not what it used to be.”    Well duh!  But come on it is still a lot of money, and it is hard to save and frugal yourself to a Million Dollars.  Increase......

Canadian Taxes for Non-Residents

Hillbilly’s not in much of a position to wax technical this week as he babysits budding economists in an oil & gas course in London. There’s a story behind why I’m doing that but it’s nowhere near as interesting as the one you’ve just made up in your head so I’ll let that add to the perceived mystique that is my life. (Seriously, the Bahamas isn’t *that* great.)

In any case, I got tired of counting the number of times the instructor would say “consequently” (at last count, eighty-fi–er….eighty-six). So I went trolling through my old blog for something that was worth repeating to a larger audience. Slim pickings, let me tell you. But found one that has some uncharacteristically useful information. I’ve updated it with some recent experiences as well so for those that read the original, don’t forget to pay for the upgrade.

The topic is tax implications of non-residents working in Canada. It’s specific to the Bahamas, which doesn’t have a tax treaty with Canada. So, let’s start off by coverin’ my hillbilly butt

http://codebetter.com/blogs/kyle.baley/archive/2008/06/17/rehash-canadian-taxes-for-non-residents.aspx

• Income Tax Refunds and Your Retirement Plan Federal income tax refunds present two problems for the retirement saver. That's right, problems. Let me explain, in just a few words. The first problem is one of tax planning. If you regularly receive a tax refund, you are not planning properly. Rather, you are extending an interest free loan......
• Canadian Royalty Trusts The instability of the stock market has investors looking for stable high yield investments. Canadian Royalty Trusts are a great alternative to traditional stocks. A Canadian Royalty Trust, also known as a CanRoy, is a corporate trust that is set up to legally bypass high corporate taxes in order to......
• 16 Ways Not To Blow Your Tax Refund It's that time of year again. That time when Uncle Sam returns some of your hard-earned tax dollars that he's been borrowing at zero-percent interest. Tax refunds are sort of a forced savings account for many people. And while I personally aim to avoid receiving a tax refund, there are......
• 5 Tips for Popular Blog Posts The internet may be a fast paced environment, but there are some blog strategies that remain the name even when it becomes harder and harder for average bloggers to keep up. Here is a reminder of some of the tips that don't change when it comes to blogging. When posting,......
• Make Your January 1, 2009 Home Mortgage Payment Today to Cut Your 2008 Taxes I know I should have thought to post this earlier, but only just remembered to pay my own mortgage now instead of tomorrow. If you own a home and have not yet made your mortgage payment due on January 1, 2009, do it now before 2008 is over. This......