hi
i realize the new law allows one to be out for 3 years and maintain PR in Canada. during this 3 year period, can one also be NR for tax purposes or will that hurt the PR ?
for example working in US during this 3 yr period. is it ok to be NR for tax purposes during this 3 year period ?
NR and out of canada
Moderator: Mark T Serbinski CA CPA
This is fine.
Up until 2-3 years ago, maintaining sufficient residential ties to make you taxable in Canada was a co-requisite to maintaining your PR status. Some would even go to elaborate means to maintain fake ties.
Since Immig reform now allows you to be out of the country for long periods, this is no longer necessary.
So long as your home and dependants are not in Canada, you will be treated as a non-resident by CRA, ESPECIALLY if you go to a country with which Canada has a tax treaty.
<i>nelsona non grata</i>
Up until 2-3 years ago, maintaining sufficient residential ties to make you taxable in Canada was a co-requisite to maintaining your PR status. Some would even go to elaborate means to maintain fake ties.
Since Immig reform now allows you to be out of the country for long periods, this is no longer necessary.
So long as your home and dependants are not in Canada, you will be treated as a non-resident by CRA, ESPECIALLY if you go to a country with which Canada has a tax treaty.
<i>nelsona non grata</i>
Ah, hold on!
When I said 'go to a country with which Canada has a tax treaty' I meant BECOME A TAX RESIDENT of said ONE COUNTRY.
The spirit of the Article IV is that countries won't quibble that you are no longer resident, as long as they know that you will pay taxes in one place or the other.
My sense is that you may be skirting the residency rules in ALL these places, and this would not satisfy CRA (nor likely, the other taxing authorities.
CRA would NOT in such a case determine that you were non-resident.
<i>nelsona non grata</i>
When I said 'go to a country with which Canada has a tax treaty' I meant BECOME A TAX RESIDENT of said ONE COUNTRY.
The spirit of the Article IV is that countries won't quibble that you are no longer resident, as long as they know that you will pay taxes in one place or the other.
My sense is that you may be skirting the residency rules in ALL these places, and this would not satisfy CRA (nor likely, the other taxing authorities.
CRA would NOT in such a case determine that you were non-resident.
<i>nelsona non grata</i>
Ok. As long as you meet the austrian definition of resident.
In US for example, one must be in US for 183 days a year (or otherwise meet Substantial presence test) or be a green card holder or Citizen. Without that, CRA would not consider that you have moved to US, and would not 'release' you from Canadian tax residency. EVEN IF you worked 6 months a year in US, it would not necessarily be enough.
In Canada, one can be a tax resident after one day, so long as he has a place to live.
The point is that, if you were 'living' in US and spending as much time outside as you are outside Austria, you might very well fail the residency test. I'll leave you to determine whether or not you meet the Austrian rules for tax residency. Each country is different, as I have just illustrated.
But you need to actually meet the standard in one country, before CRA would grant non-resident status, unless you absolutely break all ties in Canada (no bank, no RRSP, no property, no business, no PO Box -- nothing).
<i>nelsona non grata</i>
In US for example, one must be in US for 183 days a year (or otherwise meet Substantial presence test) or be a green card holder or Citizen. Without that, CRA would not consider that you have moved to US, and would not 'release' you from Canadian tax residency. EVEN IF you worked 6 months a year in US, it would not necessarily be enough.
In Canada, one can be a tax resident after one day, so long as he has a place to live.
The point is that, if you were 'living' in US and spending as much time outside as you are outside Austria, you might very well fail the residency test. I'll leave you to determine whether or not you meet the Austrian rules for tax residency. Each country is different, as I have just illustrated.
But you need to actually meet the standard in one country, before CRA would grant non-resident status, unless you absolutely break all ties in Canada (no bank, no RRSP, no property, no business, no PO Box -- nothing).
<i>nelsona non grata</i>