**We are not tax experts. If you have any doubts or questions, please check directly with a tax professional. **
It’s April! It’s tax season for Canadians and you’re confused as to what to do. Have no fear because the process is actually much simpler than you might think.
Things to Know
- Canadians in Japan on the JET Programme are considered “Factual Residents” of Canada. This means you are considered, by the Canadian government, to be residents of Canada because you are in Japan on a temporary basis. (This is because the JET Programme is a temporary program.)
- As per Article 18 of the Japan-Canada Tax Treaty, individuals in Japan on the JET Programme are exempt from paying taxes in Canada.
- You must still report your Japanese income.
- If you leave the JET Programme things change! This guide is only applicable for Canadian JET Programme participants.
How to File
If you have family willing to file on your behalf back home that’s great! But what about if you have to file yourself?
You are a Factual Resident, which means you can file online! You need to report your place of residence, which would be your home Province. (For example, if you came from Ontario you would put that as your place of residence.) The government is not asking where you physically live but what Province you are filing taxes for, so use your home province. SimpleTax (https://simpletax.ca/) and UFile (https://www.ufile.ca/) are two great online filing programs that guide you through the entire process step-by-step.
What and Where to Report
- The section you’re looking for is titled: “Foreign income or foreign property”
- Then, locate either the sub-heading Line 104 (“Foreign Income”) or Line 130 (“Foreign income – other”)
- Report how much tax you paid in Japan. On your Japanese tax slip you’ll see several tax amounts. It can be very hard to know and there seems to be no official recommendation. I typically use the column “Total Amount of Deductions from Income”.
- Then on Line 256 (“Income Exempt Under Tax Treaty”) you will report the same amount that you put on Line 104/130
- Essentially what you are doing is indicating how much you made in Japan and then indicating that none of this amount is taxable in Canada
BE MINDFUL! – Be sure you’ve got the conversion rate in order! The annual rate of exchange can be found with the Bank of Canada. (https://www.bankofcanada.ca/rates/exchange/annual-average-exchange-rates/)
Oh No! I’ve Been Audited!
There’s a chance the CRA is going to want proof of your income. This appears to be completely random and what they ask for, or accept, might also be different from year to year. I recommend sending what they request online as a pdf through the CRA website.
What you’ll need to do is get a translation of your Japanese tax slip (Gensen-Chōshū-Hyō) and send it along with a copy of your Japanese tax slip. If you can do this yourself that’s great! You can create a template on Microsoft Excel with the translation and send this in.
※Attaching only the page from the JET Information Handbook is NOT sufficient in this case. The CRA will likely not accept it.※
The CRA might accept your own translation and that’s that. However they might demand that you get it officially translated by a translator that’s certified in Canada. In order to have this done you can find one in your home province at the following link:
http://www.cttic.org/certification.asp (Select the column “Looking for a Certified Translator” and select your home province)
Certified translators will translate your document for a fee and provide you with a pdf. You can provide them your Japanese tax slip via email. This process can take a few days and can cost $90 or more.
It is also highly recommend that you attach a letter detailing that you are part of the JET Programme. You can write one yourself or you can ask your CO to provide one. It might take a couple of weeks for a CO to provide it as it will need to get approved by several people. They should be able to, especially if you explain it’s for taxation purposes in your home country.
If worse comes to worst do not hesitate to call the Canadian Revenue Agency at the phone number they provide you in their messages. Skype can be used to make international calls for a very affordable fee. If you call right when they open you will likely get someone right away. Be polite on the phone, document who you spoke to and the date and time you spoke to them.
The auditing process can take an exceedingly long amount of time. You may be audited in June and not receive any information back until December, or longer.
That’s how taxes are done for Canadians on the JET Programme. Best of luck to all of you!
Thanks to Julianne Streeter for contributing this article. (March 2020)