I am a US citizen that has been living in Canada for the past 4.5 years (I am currently a Canadian permanent resident). I am considering applying for citizenship in Canada because I beleive that in my future I may want to move my residence back to the USA for a period of time, and then return to Canada later on in life. My exact plans arn't clear to me at this point, but I'd like to have the freedom to move back and forth as I please.
My question is, is there any tax implications that I should be worried about that stem from having canadian citizenship that are different from permanent residency? Will I be subject to extra taxes if I leave Canada to live in the USA for a prolonged period of time if I have dual citizenship (and vice versa if I return to reside back to Canada later on)?
Right now permanent residency meets my needs, but I am just thinking if I have a gap of 5-10 years of not living in Canada I would like the option to return without having to go through the work permitting and PR process again.
I dont own any real estate now, and most of my investments (stocks and bonds) are located in the USA, though I do have some US traded stocks in US dollars held in my Canadian investment account as well as an RRSP that holds canadian mutual funds.
Help me make a descision on the most wise thing to do!
Should I apply for Canadian Citizenship?
Moderator: Mark T Serbinski CA CPA
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CdnAmerican
- Posts: 245
- Joined: Tue Aug 30, 2011 12:15 am
Hi devoidbmx, this is a really personal decision, but I can share my experience. I'm also a USC who has lived in Canada for the past 10 years (and about 8 in a prior stint). I applied for Cdn citizenship and have been a citizen for about 4 years.
As far as I can tell, there haven't been any tax implications for us in doing this. Canada taxes based on residency rather than citizenship, and I didn't see any differences between being a PR and a citizen.
It struck me as reasonable too to have dual citizenship to allow for easier movement between the countries. There wasn't any obvious downside, other than a long wait and a fair bit of paperwork (and a bit of money, but not a huge amount).
So, I don't have any real reason to not do this ... maybe others have other ideas, but I don't see a downside. Good luck!
As far as I can tell, there haven't been any tax implications for us in doing this. Canada taxes based on residency rather than citizenship, and I didn't see any differences between being a PR and a citizen.
It struck me as reasonable too to have dual citizenship to allow for easier movement between the countries. There wasn't any obvious downside, other than a long wait and a fair bit of paperwork (and a bit of money, but not a huge amount).
So, I don't have any real reason to not do this ... maybe others have other ideas, but I don't see a downside. Good luck!
Not a professional opinion.
I agree with all of the comments above. There is no downside. I was in exactly the same scenario as the OP in the mid 90s. I came close to returning, but ultimately did not. Going through that process is not without an emotional element. You may feel more Canadian, whether you want to or not, while still being American. I think that's a good thing.
As a Canadian citizen who came down to the U.S. many years ago and became a USC 10 years ago, IMO, another good reason to get your Canadian citizen is so you can vote and take part in the political process. Personally, I don't think guests of a country have a (moral) right to criticize the government of that country.
I am a USC who moved to Canada in the early 70s, took out Cdn citizenship 20 years later, then moved back to the US after retirement last year. The only minor problem that I am aware of caused by Canadian citizenship is that the US passport renewal application asks if the applicant has taken out foreign citizenship since acquiring US citizenship, and if so, attach an explanation. This has caused no problems whatsoever.
My 2015 taxes (the year I moved back to the USA) have not yet been assessed in either country, but as far as I can tell Cdn citizenship will not have any tax implications. The major practical advantage of dual citizenship is mobility. If a former permanent Cdn resident who is not a citizen decided to re-immigrate to Canada after becoming a resident of another country I am guessing that approval of Cdn immigration would be required.
My 2015 taxes (the year I moved back to the USA) have not yet been assessed in either country, but as far as I can tell Cdn citizenship will not have any tax implications. The major practical advantage of dual citizenship is mobility. If a former permanent Cdn resident who is not a citizen decided to re-immigrate to Canada after becoming a resident of another country I am guessing that approval of Cdn immigration would be required.