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I am a Canadian citizen. I am toying with the idea of living and working in Scandinavia as a contractor for about a year. What are the tax implications? Will I be taxed once in Denmark and then again in Canada?

Also, legally, is it too complicated (expensive) to set up a corporation and is it better to just be an employee?

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    As a Canadian citizen who intends to return to Canada, yes, you do need to declare your world income to the CRA – karancan Aug 26 '15 at 23:43
  • I'm pretty sure you've talked about investments so don't forget departure tax! cra-arc.gc.ca/tx/nnrsdnts/ndvdls/dspstn-eng.html – brian Sep 13 '15 at 15:47
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Yes, because you intend to come back to Canada you will need to report your revenue to Canada also. You should double check by calling the revenue agency, but you should be able to deduce from your Canadian taxes what you already paid in taxes in Denmark. I know this is the case with the US because e have tax treaties with them. So again check with revenue agency to make sure it is the case with Denmark too.

The conditions not to pay taxes in Canada is to have the intention of permanently leaving the country. You also need to get rid of any significant link with Canada, you should not have an address there, no bank account, no furniture...

  • It doesn't matter if you intend to return, but rather how long you intend to stay away. travel.gc.ca/travelling/living-abroad/taxation . Many people do term/contract work abroad as non-residents of Canada but generally for more than 2 years. – brian Sep 13 '15 at 15:45
  • Thanks for the link Brian. It's not cristal clear (to me at least) what are the criteria to be considered aa factual resident. What I had been told by an official when asking about duration threshold was that it was more linked to the intent and links you keep in Canada then the duration. And that in fact when you talk about a finite duration you are considered temporary worker and therefore factual resident. – loopkin Sep 14 '15 at 22:24
  • Also I suppose Denmark has tax rate that is comparable to the one in Canada, so apart from the burden of filing an extra tax form I'm not sure you could save much on the financial side. – loopkin Sep 14 '15 at 22:28
  • Your right duration isn't mentioned, it's just pretty hard to leave for more than 183 days a year and sever most ties if you leave for less than 2 years. The intent to return can have no bearing on residency. Search Canlii for more info. The easiest thing is to fill out the NR73 form and get an answer. I know at least 10 people who did contract work for 2-3yrs and all were approved as NR. The jobs were specifically offered for terms > 2 yrs as a tax enticement. – brian Sep 14 '15 at 23:34

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