Hello all of you good people!

I'm a Canadian resident planning to go to Melbourne to work for a local company, then come back to Canada.

I'm having difficulty understanding the fiscal rules in my case, and was hoping someone would be so kind to share his personal experience on the matter.

I know that Canada and the UK most of you are from - are two separate countries with two different tax policies - but, I doubt there so much of a difference. At least, I need an ide how this whole thing work.

So, let's say I come to Australia in September, start working, get some income. Come January, I need to fill in my Canadian declaration. Obviously I have to declare both my Canadian income up to the day I left Canada AND the money I earned in Australia. Am I right up to that point.
Now, my would-be employer offers me a package consisting of the following components:
- Base Salary
- LAFHA
- Super
- Bonuses, commissions etc
My would-be employer would also withold taxes accordingly, I suppose.
In my Canadian delcaration, do I have to specify the full income, including all those components? And pay the tax on all of that? Or something will be honoured? I mean, how would this work for UR residents?

Then, come next July, my Australian declaration is due. What income should I specify there, bearing in mind that I would have some canadian income falling into Australian tax year (between 1/7 and the day I leave)? How the tax I already paid in Canada for the same period would affect my Australian taxes?

Next question is Medical insurance. Can I reduce my taxable income on the amount of it somewhere - in Canada, in Australia?

Superannuity. I was told that since I will be on 457, I can take it and use it rightaway. Is it true? Will it be taxable?

I would really appreciate your comments!

Hi there - interesting that no-one has responded to you. I was going to a while back but decided not to as I am no expert on taxation. However as no-one else has I will chuck my thoughts in now !

Does Canada's taxation system require you to declare your worldwide income ??? Australia does but the UK doesn't !

So to give you an example from our own experience, income derived in the UK (in our case rental income) is declared in the UK and if necessary tax paid in the UK. This satisifes the UK tax office.

However when you do your Oz tax return you must declare all foreign income as well. This means that you would effectively pay tax twice - but you get round this by claiming a tax credit for the Oz dollars equivalent of the Canadian dollar amount you paid in tax to the Canadian tax office.

However there is a catch. The Uk (and Oz) have a tax free amount - currently $6000 in Oz and about GBP5000 in the UK - does Canada have an equivalent ? Our rental income was less than GBP 5000 per year so we didn't actually pay any tax in the UK therefore no tax credit we could claim. However we still had to declare the income in Oz which meant we ended up paying tax on it here - in short you can only effectively benefit from a tax free amount in ONE country !

So in your case if Canada is like the UK and DOES NOT require you to declare your world wide income, then you would file your Canadian return as normal - with no reference to Oz income at all. However when you get to do your Oz return you will have to declare your OZ income and tax witheld as stated on the group certificate supplied by your Oz employer after the end of the tax year. Now this next bit is what I am not sure of, but this is what I did the first year I was here. My first Oz tax return only declared the income I earned in Oz from when I arrived to June 30th. It did not take into account any income I earned in the UK before I came to Australia, and I had no income in the UK after I came to Oz (the rental income I mentioned above was in my wife's name). The Oz return was done by an accountant so I assume it was done correctly and they were aware that I had been living in the UK and earning income prior to coming to Oz.

If Canada is like Oz and requires you to declare world-wide income then you need to seek professional help in Canada at least.

Medical insurance - dependent on your circumstances (income/single/married/kids etc) having medical insurance may or may not have a bearing on whether you pay Medicare Levy Surcharge (pretty much everyone pays the Medicare Levy of 1.5% irrespective of whether you have medical insurance or not). I dont think you can reduce your taxable income - at least not here in Oz.

Superannuation. This will be paid into a super fund by your employer but I beleive it will be repaid to you when you leave the country - but I believe there are conditions and tax is withheld.

http://www.ato.gov.au/super/pathway.asp?pc=001/007/126

I hope this is of assistance but please bear in mind it is from personal experience and I am not a taxation expert !

Thank you so much Colin! I really appreciate for sharing of your experience.

Canada does require declaring world income - for all citizens considered "factual residents". Which seems to be my case, no matter how strange it sounds. I'm going to "keep ties" with Canada - for instance, keep my house - and that automatically means, I'm subject to Canadian taxes as well as Australian. Fortunately, Canada and Australia have an agreement to prevent double taxation. Although I still don't understand how the whole thing works, in my particular situation. It seems I will only know it once - and if - I move to Australia. What makes things a little bit more complicated - I'm actually a resident of the province of Quebec here in Canada, which has its own Revenue Quebec and its own, separate, independent income bloody tax. So I'm not sure whether or not Quebec is aware of that agreement.
At this point I'm more and more convinced that I will be screwed one way or the other - just don't know exactly how deeply. We'll see...
Thanks again!

Remember that temporary visaholders in Australia are now exempted from the charge to Australian taxation on overseas derived investment income and capital gains:
http://www.ato.gov.au/individuals/content.asp?doc=/content/76537.htm

Maybe the tax position is not as bad as you thought ...?

Best regards.