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Hiring foreign workers is one option to help remedy the qualified labour shortage.
During the international recruiting process, employers are concerned about several issues such as legal proceedings, welcome and social integration, but often forget the tax aspect, which can be a source of stress for immigrant workers.
Foreign workers and taxation in Canada and Quebec
It would be a mistake to think that once an employee is in service, there’s nothing more to do. There’s still work with regard to renewing the work permit and starting the process for employee to get their permanent resident status. Above all, it’s important to ensure that foreign workers comply with Canadian and Quebec tax requirements.
Who will notify employees of their tax obligations? Who will help them file their income tax returns? Employers are in the best position to inform newly arrived workers of their tax compliance obligations; when employers fail to do so, immigrant workers may not file their income tax returns on time and sometimes find themselves in trouble or lose out on tax benefits.
Tax obligations and tax credits
Many issues need to be assessed before filing foreign workers’ income tax returns.
- Is there a tax holiday for this type of worker?
- Will they be entitled to all of their tax credits?
- Are they considered a tax resident of Canada or a non-resident?
- Is there a tax treaty with their country of origin?
Only the aspects specific to the foreign workers situation will determine their tax obligations.
In light of the labour shortage, retaining foreign workers is key. Businesses won’t have any choice but to keep finding innovative retaining strategies for their specialized foreign workforce.
To make integration easier for foreign workers, it is essential for employers to guide them in adapting to their new social environment, but also in understanding our tax system, which can be complex.
Personalized training to your foreign workers
Our team of cross-border tax experts can guide you through this process by providing integrated consultation and tax compliance services for these foreign workers.
We can provide personalized help based on the needs and situations of each foreign worker. Contact our team to meet with our specialists.