Hi, I have entered Canada last July and stayed there for 2 weeks. After the paper works, I returned to UAE and continue working here. I have a Canadian Driving License, Credit Card and Bank A/C. Should I have to file income tax?. Should I have to pay income tax for my earnings in UAE. I never worked in Canada and do not have income from Canada.

Regards

It is a very good question which I have asked time and again to various people and have never got a satisfactory reply. When I had landed in Canada in 1999 and then planned to go back after a couple of weeks like you have done, I was advised NOT to get all the things that you have got.

I have read the book Canadian Taxes for Dummies which gives very practical solutions and advice. According to that, Canada does not recognise residentship based on no of days stay in the country as most countries do - but rather on your ties with Canada.

According to that book, one becomes a resident the day he lands and does things that can prove ties to Canada which could include a lot of things - Driving Licence, SIN, bank account, credit card, rental or owned accomodation, children in Canadian schools etc etc. From the same book I understand that even if I get a term assignment outside Canada for say two years during which I will not be coming to Canada even for a day, I am considered a resident required to file IT return based on my TIES with Canada if I remain in possession of those documents that you have mentioned.

Theoratically it seems you have to file IT return in Canada as a resident - but this is something I would myself want a confirmed opinion on.

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Chandresh

Advice is free – lessons I charge for!!

Chandreshji,

Any update on this posting, any idea if we have to pay tax on the income earned outside Canada during the first three years after we land, when we are staying in Kuwait. As we are not paying any tax in Kuwait, so there is no question of double taxation benefit etc.

What if we do not file returns for the first three years and only file tax when we physically become a resident in Canada.

Does acquiring a PR card, SIN number and a bank account in Canada is sufficient ties that will make us liable for filing tax returns.

Does acquiring a PR card, SIN number and a bank account in Canada is sufficient ties that will make us liable for filing tax returns.

Ans - NO

But a drivers license comes in grey area , you should not have applied for a drivers licence if you did not plan on living in canada. As a drivers licence goes a great way in showing residency.hope you did not apply for MSP/OHIP which is for residents only .

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