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Originally posted by web2000


That is true but it is also true that 99.9% you will have ties with Canada if u have either PR or Canadian passport. If any of the following is true then you have ties with Canada and hence pay tax on worldwide income:

1. Health card
2. Driving license
3. Apt or house [Even a vacation home develops a tie]
4. Car or furniture even if it is kept in a storage room.
5. Spouse or Common-law partner in Canada
6. Dependents
7. Canadian bank account,credit cards or security accounts
... and more


This means once you hold PR or Canadian passport, you develop ties with Canada. Practically I don't see anybody can easily break these ties unless you landed with PR and returned back next day. The concept of ties is all meaningless.

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Dimple2001

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Originally posted by dimple2001

Quote:

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Originally posted by web2000


That is true but it is also true that 99.9% you will have ties with Canada if u have either PR or Canadian passport. If any of the following is true then you have ties with Canada and hence pay tax on worldwide income:

1. Health card
2. Driving license
3. Apt or house [Even a vacation home develops a tie]
4. Car or furniture even if it is kept in a storage room.
5. Spouse or Common-law partner in Canada
6. Dependents
7. Canadian bank account,credit cards or security accounts
... and more


This means once you hold PR or Canadian passport, you develop ties with Canada. Practically I don't see anybody can easily break these ties unless you landed with PR and returned back next day. The concept of ties is all meaningless.

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There are many, many Cdn citizens who live in the US permanently as GC holders (or otherwise) and without any ties to Canada (including all of the above list). I personally know few who don't have any of the above in your list and live in CA, IL and TX. So, it is possible (and many have done it) to permanently move out, severe ties and legally declare emigration from Canada for tax purposes (note I keep emphasizing for tax purposes).

What MIGHT impact these tax non-residents are the tax obligations of a non-resident. These could be:

* dividends;
* rental and royalty payments;
* pension payments;
* Old Age Security pension;
* Canada Pension Plan and Quebec Pension Plan benefits;
* retiring allowances;
* registered retirement savings plan payments;
* registered retirement income fund payments;
* annuity payments;
* management fees.

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html?=slnk

Even the above list has exemptions per the link attached as far whether or not one has to file taxes.

In any case, good professional advice must be sought before declaring oneself as non-resident because there are issues of "ties" and then there are issues of "obligations" which are two different things.

In very simplistic terms, ties may require declaring worldwide income while obligations would only require one to fulfill only the Canadian source obligations.

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* normally, customarily, or routinely live in another country and are not considered a resident of Canada for the tax purpose;

I hope this is more clear.

I went through this process. I came to Canada on Work Permit. I applied to CRA for the determination of my residency for the tax purpose and I was declared as "resident of Canada" for tax purpose even though I was still on work permit at that time...

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Originally posted by john26

* normally, customarily, or routinely live in another country and are not considered a resident of Canada for the tax purpose;

I hope this is more clear.

I went through this process. I came to Canada on Work Permit. I applied to CRA for the determination of my residency for the tax purpose and I was declared as "resident of Canada" for tax purpose even though I was still on work permit at that time...

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Dimple2001

Quote:

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Originally posted by dimple2001

Quote:

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Originally posted by john26

* normally, customarily, or routinely live in another country and are not considered a resident of Canada for the tax purpose;

I hope this is more clear.

I went through this process. I came to Canada on Work Permit. I applied to CRA for the determination of my residency for the tax purpose and I was declared as "resident of Canada" for tax purpose even though I was still on work permit at that time...

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That's correct. You were a resident since you "routinely, normally, etc, etc..." lived in Canada during the work permit time period and possibly developed ties as defined by the tax rule (bank account, apartment lease, etc).

That's why the immigration and citizenship status is not the driving factor for tax residency.

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Originally posted by web2000


If someone who is holding PR "routinely, normally, etc, etc..." live in India but has Canadian bank accounts and driving license, will he/she be considered a tax resident in Canada? When we talk about "routinely, normally, etc, etc..." why there is no explanation of how long to stay in and out of Canada. I can't translate the word "routinely, normally.." into real period in a given financial year in order to determine if a person is tax resident or not. I don't think there is any written rule which can help to determine if a person is tax resident in Canada if he/she lived X months in Canada and Y months in India in a given financial year.

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Dimple2001

Quote:

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Originally posted by dimple2001

Quote:

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Originally posted by web2000


If someone who is holding PR "routinely, normally, etc, etc..." live in India but has Canadian bank accounts and driving license, will he/she be considered a tax resident in Canada? When we talk about "routinely, normally, etc, etc..." why there is no explanation of how long to stay in and out of Canada. I can't translate the word "routinely, normally.." into real period in a given financial year in order to determine if a person is tax resident or not. I don't think there is any written rule which can help to determine if a person is tax resident in Canada if he/she lived X months in Canada and Y months in India in a given financial year.

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Per CRA, if someone maintained a Cdn driver's licence and bank accounts, they might be considered a tax resident because that someone chose to maintain ties in Canada. Routinely and normally living outside Canada is only one factor among many to help determine tax residency.

A tax non-resident is defined as someone and I quote from CRA:

You are a non-resident for tax purposes if you:

A * normally, customarily, or routinely live in another country and are not considered a resident of Canada;

OR

B * do not have residential ties in Canada; and
o you live outside Canada throughout the tax year; or
o you stay in Canada for less than 183 days in the tax year.

In the above this or that condition, if "A" is ambiguous or confusing (which I agree is), you simply check to see if you'd satisfy "B".

The rule is - according to "B" - Cdn driver's licence and bank accounts make you have residential ties. In other words, for one to be a non-resident, you must satisfy BOTH the conditions - (1) not have any residential ties (items defined by CRA) AND (2) stay in Canada for LESS than 183 days in the tax year or stay out for the whole year.

In your question, that someone does not satisfy one of the 2 required conditions, namely, not maintaining residential ties. Therefore, even if the person lives outside of Canada, the residential ties (licence, etc) will make him/her a tax resident.

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