My sister has been living in Central America since late 2002. She worked at small jobs to stay afloat, but didn't file taxes from 2003 onward. Now she is starting to pull in some proper writing jobs and wants to straighten things out. Any ideas on how to go about this? I don't think she has any proper records of money earned for most of that time because it was in cash or trade.

I suggested finding a good accountant, but she doesn't have enough money to pay someone thousands to fix this situation.

  • Did your sister maintain any ties with Canada, e.g. driver's license, health card, property of any kind? Residency vs. non-residency has an effect on the tax situation for Canadians. – Chris W. Rea Jan 31 '13 at 19:16
  • This. Most countries generally require you to either make the money in that country or bring it to that country before it's subject to taxes in that country; otherwise you start getting into sticky international sovereignty messes trying to collect taxes on money from another country. Citizenship or residency kind of plays into it but only if the country remained your sister's primary residence. – KeithS Feb 6 '13 at 1:16

Canada doesn't tax non-residents on income earned/incurred outside of Canada.

So, your sister should start with this page to determine the residency status. If she is indeed determined to be non-resident - she should look here to see her obligations. If all she earns she earns outside of Canada - her obligations will be very little, if at all.

This is similar to almost any other country in the world, with the notable exception of the United States of America. US citizens are taxed regardless of their residency status, everywhere in the world on worldwide income (unless tax treaty says otherwise).

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