TAX IMPLICATIONS

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DAKSHA
Member since: Mar 04

Posts: 34
Location: toronto
Post ID: #PID

Posted on: 15-11-04 02:31:33

I would like to know that in case the principal applicant doesnot move to CANADA
in the first three years while his family moves ,then will he be liable for the taxes in
CANADA for the income earned putside canada?
Then in case the principal applicant doesnot move to CANADA after three years and his PR card expires i.e. he remains no way connected to CANADA,while his family conyinues in CANADA then what are the tax implications?
Does that mean the principal applicant gets taxed for three years and not thereafter?

dp_jain
Member since: Jan 04

Posts: 418
Location: Brampton
Post ID: #PID

Posted on: 15-11-04 07:35:42

Yes, he would be subject to canadian income tax being resident canadian reason being his immediate family is staying back at canada. He gets foreign tax credit for the income tax he pays abroad.

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DAKSHA
Member since: Mar 04

Posts: 34
Location: toronto
Post ID: #PID

Posted on: 15-11-04 08:16:58

DEAR JAINSAAB,
Thanks for the prompt reply.

But the other half of my question is un answered,
could you please throw some light on that?

chandresh
Member since: Mar 03

Posts: 2606
Location: Toronto
Post ID: #PID

Posted on: 15-11-04 09:52:35

Quote:
Orginally posted by DAKSHA

Then in case the principal applicant doesnot move to CANADA after three years and his PR card expires i.e. he remains no way connected to CANADA,while his family conyinues in CANADA then what are the tax implications?

Unlike some other countries (like Singapore), the dependent applicants become independent PRs once landed - therefore the need of principal applicant is only till the time of landing. If the principal applicant loses his PR status later, his family members continue to be PRs of Canada and will be taxed accordingly.

Chandresh

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Chandresh

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DAKSHA
Member since: Mar 04

Posts: 34
Location: toronto
Post ID: #PID

Posted on: 15-11-04 12:31:43

Many thanks for the prompt reply.

But I would like to have your comments on the peculiar situation where
the principal applicant declares the global income and pays tax thereof
just because his family is in CANADA(and thus the ties) for 3 years
and then stops doing so as his PR lapses because he decides not to immigrate.

This appears to me little hard to believe.

Your comments please....

Smiley
Member since: Mar 03

Posts: 1185
Location: USA
Post ID: #PID

Posted on: 15-11-04 13:11:18

You pay your taxes for the 1st 3 years as PR of canada and because you have ties of family to canada and if you lose your PR status , you do not have to pay taxes as you are no longer the PR and no more a resident of canada although your family is.

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crenshaw
Member since: Sep 04

Posts: 914
Location: Toronto
Post ID: #PID

Posted on: 15-11-04 13:15:37

Daksha

This is a link to a bulletin from the CRA that deals with your situation.

http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.pdf

In particular, you might want to read paragraph 7 of the bulletin which relates to spouse and dependents in Canada.

The CRA also offers facilities where you can write to them for a determination of your residence status, this is a link to the form:

http://www.cra-arc.gc.ca/E/pbg/tf/nr74/nr74-03e.pdf

Hope this helps...

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