Canada Australia tax obligations

[auscanada]

I am planning to apply for a Canadian PR in the coming months. If I get it, I'll visit Canada sometime next year to activate it and maybe open a bank account and return to Australia. I will be moving to Canada 3 years from then. Have some family commitments in Australia.

I've a bunch of questions.
1) Australian "tax residents" are taxed on their worldwide income. I understand it is the same in Canada. Do Canada and Australia have some kind of agreements that'll separate Australian income/assets from Canadian income/assets?
2) I assume that I won't be considered to be a tax resident of Canada during the first 3 years. Is that correct? So I'll only be taxed on my Canadian income/assets, if any and not touch my Australian income/assets?
3) Would that make any difference if my partner is a Canadian citizen?
4) Until I become a tax resident in Canada. Do I have to file tax returns or declare anything to Canada's tax office?
5) Any other potential gotcha's that I should look out for?

Cheers.

 

[Amadan123]

Hello auscanada,

1) please peruse through the Australia/Canada tax treaty here to determine any such case. The language, admittedly, is convoluted, but a chat with an international CRA representative can help.

http://www.fin.gc.ca/treaties-conventions/austral2-eng.asp
CRA international tax service: 1855-284-5942

2) You will be a resident of Canada for tax purposes as of the day you enter Canada, and establish residency ties (possession of a home, spouse and dependants in Canada). From that point on, you will be taxed in Canada on your worldwide income.

3) If your spouse is a resident of Canada for tax purposes, then you will be considered one as well, as that is a primary residency tie.

4) As a non-resident of Canada for tax purposes, you only have reporting obligations for your activity within Canada, such as employment, investments, dispositions of property, etc. Assuming that you won't have these activities, and until you become a resident for tax purposes, you won't have to file or report anything to the CRA (concluded based on the information provided).

5) You should study residential ties because that determines whether one will be taxed in Canada. You can do that here: http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

Madan Chartered Accountant team
www.madanca.com