Do sponsored parents have to file tax returns?

[nush78l]

I sponsored my parents and they got their PR in Oct 2017.

They have no income in Canada and are totally dependent on me.

Their income in their home country is only a modest cash rental income.

For now, their plan is to stay the minimum 183 days in Canada and the rest of the year in their home country.

Do my parents need to file a tax return in Canada every year?
If yes, there is no documentary evidence of their rental income in their home country. Will this be an issue?

 

[torontosm]

I sponsored my parents and they got their PR in Oct 2017.

They have no income in Canada and are totally dependent on me.

Their income in their home country is only a modest cash rental income.

For now, their plan is to stay the minimum 183 days in Canada and the rest of the year in their home country.

Do my parents need to file a tax return in Canada every year?
If yes, there is no documentary evidence of their rental income in their home country. Will this be an issue?

If they have overseas income, they should file a return. Even without documentary evidence, they can declare the income and the taxes paid in their home country, if any.

 

[Rob_TO]

I sponsored my parents and they got their PR in Oct 2017.

They have no income in Canada and are totally dependent on me.

Their income in their home country is only a modest cash rental income.

For now, their plan is to stay the minimum 183 days in Canada and the rest of the year in their home country.

Do my parents need to file a tax return in Canada every year?
If yes, there is no documentary evidence of their rental income in their home country. Will this be an issue?

If they spend 183 days in Canada then they will be considered tax resident for the entire year. Also having family and any other ties to Canada (like being a PR, intending to return, any accounts, etc) will also strengthen their status of tax residents.

If this is the case, then yes they need to file Canadian tax returns AND they need to claim their rental income and pay Canadian income tax on it.

Read here: https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-1-residency/income-tax-folio-s5-f1-c1-determining-individual-s-residence-status.html

 

[torontosm]

I sponsored my parents and they got their PR in Oct 2017.

They have no income in Canada and are totally dependent on me.

Their income in their home country is only a modest cash rental income.

For now, their plan is to stay the minimum 183 days in Canada and the rest of the year in their home country.

Do my parents need to file a tax return in Canada every year?
If yes, there is no documentary evidence of their rental income in their home country. Will this be an issue?

Also, on another note, there is no requirement for your parents to stay in Canada for 183 days per year. Rather, to maintain their PR, they must live here for 2 years out of every 5, which is much more flexible.

 

[nush78l]

Also, on another note, there is no requirement for your parents to stay in Canada for 183 days per year. Rather, to maintain their PR, they must live here for 2 years out of every 5, which is much more flexible.

You are right, PR residency requirement is more flexible. However, in order to maintain their Ontario health insurance (OHIP) they have to stay 153 days in a 365 day period.

 

[Rob_TO]

You are right, PR residency requirement is more flexible. However, in order to maintain their Ontario health insurance (OHIP) they have to stay 153 days in a 365 day period.

Maintaining OHIP is a big tie for tax purposes as well (see my link above). As I mentioned, they should be prepared to file income tax returns and claim any worldwide income as well.