Canada welcomes fully vaccinated Americans as border rules ease

As provinces across the country try to reopen their economies and some businesses ease the process of getting employees back to the workplace, an unintended consequence of the COVID-19 pandemic may continue into the foreseeable future.

A significant number of Canadians sent home to work remotely during the pandemic now want to continue to do so in a post-COVID-19 world, and many more businesses intend to allow them to do so.

A recent survey by Accenture found that more than 60 percent of Canadians now prefer some sort of hybrid or remote work model, as many organizations plan for employees to return to their workplaces.

In June, a survey by the Business Development Bank of Canada found that 74 percent of businesses would allow their employees to work from home after the COVID-19 pandemic, and more than half of all employees would like to work remotely. So much more than what you do.

KPMG partner Sonia Gandhi, who heads its Global Mobility Tax Services practice, said an increasing number of employees are now requesting to work at locations other than their physical workplaces.

"They're asking their employer, 'Can I work a month or more, like in Whistler or maybe in Florida, Portugal or Barbados? Gandhi said.

“We are seeing that companies across various industries are now considering 'work from anywhere' arrangements with their employees. Employees are demanding this flexibility and employers see it as an advantage to differentiate themselves in the market. are looking."

While some workers are enjoying the added benefits of remote working, some may ask how being hundreds or thousands of kilometers away from home will affect their taxes.

Tax rates vary greatly from province to province, so what happens when a person is initially employed by a business in Ontario and begins working remotely in BC. - All over the country on the west coast.

According to Gandhi, computing taxes from one province to another may not be as complicated as it seems. It clarified that according to the current Canadian tax system, an employee would be taxed only on the basis of which province they are a resident of.

This means that if someone who lives and is employed in Halifax decides to work remotely in Banff for several months, they will only have to pay income tax based on a request from the Government of Nova Scotia. The same goes for employers -- businesses are only required to calculate withholding tax, TPP and Social Security for the employee where their office is located.

Where it gets complicated, according to Gandhi, is when a company based in one province hires an employee living in another. The employer must withhold the tax base at the rate specified by his province, while the employee must pay the rate specified by his home province.

In that case, Gandhi said the employee would either have to pay that difference or get a refund when he filed his taxes in April.

Gandhi said, "Remote working is not really complicated from province to province, but where it gets a little more complicated is when the remote work is in a country other than the employer's location."

Many Canadians working remotely are now choosing to work not only outside their home province but also outside the country.

Gandhi said that when it comes to working internationally, the issue goes beyond taxes – Canadians planning to work abroad need to make sure they are legal and "immigrating". perspective" can do that.

"Many countries have called it 'nomadic visa', where they allow people to come into the country and work remotely," Gandhi said. "But other countries are not allowing it yet."

When it comes to taxing internationally, Gandhi said it would be on a case-by-case basis depending on which country you work in, warning that Canadians should " One should be wary of facing double taxation. need to live.

According to him, some countries may have a "tax treaty" - an agreement between countries on how employees will be taxable - to prevent doubling the tax payments already in place.

“If there is no tax treaty with Canada, you can pay taxes not only in Canada but also in that remote work country. You have to be very mindful of what the consequences may be, including a large Tax compliance burden is also involved,” she said.

Ultimately, Gandhi said that those wishing to work abroad should be very aware of what laws await them in their host country, whether it be employment or immigration laws or those for Canadians. Lack of a tax treaty to avoid doubling your taxes.