Non-resident of Canada since 2021, now living in Poland (Canada-Poland have tax treaty). In 2023, I only had an RRSP remaining in Canada, decided to withdraw all my funds and close the account. I was charged 30% withholding rate. I called CRA, I was told to file a Non-resident return to get refund. Do I need to also list all my foreign income for the year? (And if so, on which forms?) My only other income for the year:(Business registered in Poland) self-employment/business income of CAD $4500,(Capital Gains filed in Poland) cryptocurrency profits of $0 (after subtracting from losses in 2022).Also, my accountant in Poland was asking if I could just request to have the tax obligation moved to Poland, to pay the full taxes on the T4RSP income in Poland instead of Canada. Is that an option?

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ForeignUser

Question

What forms to fill for a Non-Resident filing to fix a T4RSP withholding error?

Forum|Forum|2 years ago
March 27, 2024
1 reply
0 views

Non-resident of Canada since 2021, now living in Poland (Canada-Poland have tax treaty).

In 2023, I only had an RRSP remaining in Canada, decided to withdraw all my funds and close the account. I was charged 30% withholding rate.

I called CRA, I was told to file a Non-resident return to get refund.

Do I need to also list all my foreign income for the year? (And if so, on which forms?)

My only other income for the year:

(Business registered in Poland) self-employment/business income of CAD $4500,
(Capital Gains filed in Poland) cryptocurrency profits of $0 (after subtracting from losses in 2022).

Also, my accountant in Poland was asking if I could just request to have the tax obligation moved to Poland, to pay the full taxes on the T4RSP income in Poland instead of Canada. Is that an option?

TurboTaxSusan

When you file your income taxes, the withheld amount will be applied against any income tax owed on your taxable income, including the RRSP withdrawal. If the withheld amount is more than the income tax owing, you'll get a refund.

Yes, you would need to enter your worldwide income, though you will not be taxed on it.

You would have to contact the CRA to see if your tax obligation can be moved to Poland.

ForeignUserAuthor

Thanks, that's what I suspected.

Where would I report "foreign business income", do I need to put that on a T2125? When I added $4500 of foreign income using a T2125 (which required entering my business name, foreign address, but skip the GST/PST since my business is not situated in any province), it reduced my return by about -$1000.

Would such a small increase in overall income really cause -$1000 change, or am I doing something wrong? That looks more like I was being taxed on the foreign income itself.

What about for foreign capital gains (for which I filed in Poland already). My gains in 2023 were lower than my 2022 losses (carried-over), so I don't pay any tax on that in 2023 in Poland. So would I need to list that in the return?

GHarpe

Because we are in a public forum and due to the many factors and information required to accurately answer you, please contact the Canada Revenue Agency (CRA) by calling them at 1-800-959-8281 so they can review your information and guide you correctly.

Thank you for choosing TurboTax.