Can someone explain the Overseas tax credit in plain terms?

Question

My hubby is going to be working overseas in the oil and gas industry and we looked into the overseas tax credit but the mumbo jumbo was confusing and I was wondering if anyone can explain it in normal terms??

He will make aprox 110 K per year overseas and will be gone 35 on 35 off and will remain residency in Canada....any ideas of how much money we will save???

Thanks

Answer 1

Will all or substantially all (90%) of his income be from work overseas?  Is he working for a company resident in Canada?

If so, he can receive a tax break of 80% of the tax normally payable on the first $100 k of income.  That's about all you need to know.  If he works only part of the time overseas, he will not qualify.  Nor will he if the work is not performed by a Canadian resident company.  So in other words, if he works for XYZ Drilling, resident in Edmonton, he's good.  If he is working for ABC Drilling in Abu Dabi, he does not qualify.