Canada tax residency status while working in UAE

[Live life]

hi all,

Anyone has experience of getting confirmation on Canada tax residency status for someone who is a Canadian PR but continues to work in the UAE.

A Friend is in this situation and is unable to find suitable employment in Canada and is compelled to continue working in emirates. His family is residing in Canada to fulfil the RO for citizenship. For all the years he is in the UAE will he file taxes as a tax resident or non resident in Canada ie his worldwide income will be taxed in Canada or not?

Any help will be appreciated

 

[zardoz]

hi all,

Anyone has experience of getting confirmation on Canada tax residency status for someone who is a Canadian PR but continues to work in the UAE.

A Friend is in this situation and is unable to find suitable employment in Canada and is compelled to continue working in emirates. His family is residing in Canada to fulfil the RO for citizenship. For all the years he is in the UAE will he file taxes as a tax resident or non resident in Canada ie his worldwide income will be taxed in Canada or not?

Any help will be appreciated

With family residing in Canada, he may well be deemed to be a tax resident of Canada, resulting in the assessment of the foreign income for tax purposes. Contact the CRA for an explicit assessment of the tax residency status.

 

[keesio]

If he has a spouse and dependents (children) in Canada, then he is considered to have "strong" ties to Canada and is likely considered a tax resident of Canada.

 

[Live life]

If he has a spouse and dependents (children) in Canada, then he is considered to have "strong" ties to Canada and is likely considered a tax resident of Canada.

Thanks for your feedback. Does it make a difference to the status ( resident /non resident) depending on the country of residence ( eg singapore or Dubai)? Any view of this

 

[Zmaqsood]

Thanks for your feedback. Does it make a difference to the status ( resident /non resident) depending on the country of residence ( eg singapore or Dubai)? Any view of this

Ur residence country does matter to the fact that what kind of treaty canada has with that co8ntry allowing u to claim certain foreign tax credits when filing return in canada. As to country having impact on u being resident or not it does have no impact. Only thing which matters is ur primary ties with canada or in absence of primary ties they will look for secondary ties. As ur family is here and so will be a house they reside in u will be a deemed resident and will have to file tax in canada

 

[Live life]

Ur residence country does matter to the fact that what kind of treaty canada has with that co8ntry allowing u to claim certain foreign tax credits when filing return in canada. As to country having impact on u being resident or not it does have no impact. Only thing which matters is ur primary ties with canada or in absence of primary ties they will look for secondary ties. As ur family is here and so will be a house they reside in u will be a deemed resident and will have to file tax in canada

Actually this person has already been declared as deemed non resident based on his ties etc by cra in their response to his filing nr 74. The only change now is that the person is working in Dubai instead of Singapore. Would he need to reconfirm his status with CRA or can it be taken as no change in status. Thanks on advance

 

[zardoz]

Thanks for your feedback. Does it make a difference to the status ( resident /non resident) depending on the country of residence ( eg singapore or Dubai)? Any view of this

Actually this person has already been declared as deemed non resident based on his ties etc by cra in their response to his filing nr 74. The only change now is that the person is working in Dubai instead of Singapore. Would he need to reconfirm his status with CRA or can it be taken as no change in status. Thanks on advance

That seems very unusual. He should recheck based on the passage of time and the changes in circumstances. CRA could review at some point in the future and land him with a massive retrospective tax bill.

 

[Zmaqsood]

Actually this person has already been declared as deemed non resident based on his ties etc by cra in their response to his filing nr 74. The only change now is that the person is working in Dubai instead of Singapore. Would he need to reconfirm his status with CRA or can it be taken as no change in status. Thanks on advance

Well in that case i believe u r still non resident if ur situation inside canada hasnt changed like ur ties to canada. But u can request another ruling from CRA

 

[Live life]

That seems very unusual. He should recheck based on the passage of time and the changes in circumstances. CRA could review at some point in the future and land him with a massive retrospective tax bill.

Can CRA change their opinion with no change in the applicant’s circumstancees? This is quite strange if they can change their view retrospectively.

However will advise this person to file another NR 74 should his working destination change to Dubai. Thanks

 

[Zmaqsood]

That seems very unusual. He should recheck based on the passage of time and the changes in circumstances. CRA could review at some point in the future and land him with a massive retrospective tax bill.

Well i agree that seema very astonishing to me as to how come when a person has clear social ties and that too primary ones with canada in shape of having his family and spouse in canada he is declared deemed non resident by CRA

 

[Live life]

Well i agree that seema very astonishing to me as to how come when a person has clear social ties and that too primary ones with canada in shape of having his family and spouse in canada he is declared deemed non resident by CRA

That’s because he is a tax resident in a country that has tax treaty with Canada

 

[keesio]

That’s because he is a tax resident in a country that has tax treaty with Canada

It doesn't matter if there is a tax treaty or not. There are certain parameters that dictate if you have strong tax ties to Canada regardless of any tax treaty. Owning a home in Canada is considered a strong one. Having your spouse and dependents living in Canada is another strong one.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html

The most important thing to consider when determining your residency status in Canada for income tax purposes is whether or not you maintain, or you establish, residential ties with Canada.

Significant residential ties to Canada include:

• a home in Canada
• a spouse or common-law partner in Canada
• dependants in Canada

 

[Zmaqsood]

That’s because he is a tax resident in a country that has tax treaty with Canada

Having tax treat gives u special benefit of getting foreign tax credit (reduce taxes u have to pay by deducting what taxes u paid in country u r working in).

And i agree with keesio being working in country u have tax tr3aty with doesnt make u non resident unless there is something we r missing here.

Did the person informed CRA of his family and spouse being in canada? Or that he owns or rent a house? Or he has a bank account?

 

[keesio]

Did the person informed CRA of his family and spouse being in canada? Or that he owns or rent a house?

These are the key questions I have also. As long as it was clearly communicated to CRA that his family is living in Canada when he was granted non-residency status, then he is (likely) fine.

 

[canuck78]

CRA customer service is often wrong unfortunately. It seems highly likely that he has been a tax resident since moving abroad and leaving his family in Canada. If your family is in Canada benefitting from things like education and healthcare parents are expected to contribute into the tax base if they are PRs or citizens. Seems logical. I would call CRA a couple of times to see if you Geta consistent answer or just ask an accountant,