Family in Canada when I work in Israel - can they be Canadians if I am not here?

[frege]

Since my wife does not work or speak English well I hope that is ok too. I plan to be not resident and family can stay in Canada resident to protect me from the taxes obligation. This CIC class is only when I arrive and once in I can leave according to an Angolan friend I have. Thanks Canada - better than Australian for my family to get citizenship.

It's a requirement of citizenship that your wife speak English or French. If she doesn't, then she should look into taking language courses as soon as possible to reach the required level of proficiency. See this: http://www.ontarioimmigration.ca/en/learn/OI_LEARN_IMPROVING.html

Currently, the CBSA records entries into Canada by permanent residents, as well as exits via the United States. This recording is likely to be very accurate if you use a travel document that has been connected with your PR card. It is uncertain to what extent data on exits via flights overseas are easily available to border guards at present, but soon (probably before the end of the year), all exits from Canada will begin to be recorded systematically.

You will not need a PRTD or an eTA if you enter from the United States via a land border. Also, before the exit recording system comes into force, you are probably less likely to face scrutiny about your residency obligation when entering via a land crossing (especially in a private or rented car). Buffalo and Detroit are close to Toronto and are natural points of entry.

 

[torontosm]

Here is what the CRA writes:http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html

Right, but even with the tie-breaker criteria, I think OP would be hard pressed to argue that his Centre of Vital Interests would be Israel, with his entire family living in Canada in a house that is in his name.

 

[frege]

Right, but even with the tie-breaker criteria, I think OP would be hard pressed to argue that his Centre of Vital Interests would be Israel, with his entire family living in Canada in a house that is in his name.

What you were saying before was that the treaty wasn't relevant.

There are a lot of things besides a spouse and children that are taken into account in the "centre of vital interests" test (and for all we know, there could be other children involved). With the information we have, it's not a slam dunk either way. If the "centre of vital interests" test is inconclusive, then the next tie-breaker is "habitual abode." So the best advice to the OP is to get advice from an accountant, particularly if he wants to plan things in advance so that a residency determination works out one way or the other, depending on what would be more advantageous.

 

[torontosm]

What you were saying before was that the treaty wasn't relevant.

There are a lot of things besides a spouse and children that are taken into account in the "centre of vital interests" test (and for all we know, there could be other children involved). With the information we have, it's not a slam dunk either way. If the "centre of vital interests" test is inconclusive, then the next tie-breaker is "habitual abode." So the best advice to the OP is to get advice from an accountant, particularly if he wants to plan things in advance so that a residency determination works out one way or the other, depending on what would be more advantageous.

I still maintain that the treaty is irrelevant as this is such a clear cut case that I doubt it would even come into play. The treaty would only be used on those marginal cases where it could go either way. In this case, the OP's wife is living in Canada, the kid(s) are going to school in Canada, etc. Someone has to pay for all that, right? Obviously taxes paid in Israel aren't going to fund any of those social expenses, regardless of tax treaties.

 

[Buletruck]

Having actually gone through the the song and dance with CRA, I can tell you that immediate family will automatically make you a resident of Canada. As will property. The test is really a guideline. He may not need to pay tax in Canada with the tax treaty, but his income will still need to be reported.

 

[frege]

I still maintain that the treaty is irrelevant as this is such a clear cut case that I doubt it would even come into play. The treaty would only be used on those marginal cases where it could go either way. In this case, the OP's wife is living in Canada, the kid(s) are going to school in Canada, etc. Someone has to pay for all that, right? Obviously taxes paid in Israel aren't going to fund any of those social expenses, regardless of tax treaties.

The treaty will be used in all cases where a taxpayer is considered a resident of Canada under Canada's domestic tax laws and a resident of Israel under Israel's domestic tax laws.
This is what can be found on the CRA website about this:

“If the individual has a permanent home in both Contracting States, it is necessary to look at the facts in order to ascertain with which of the two States his personal and economic relations are closer. Thus, regard will be had to his family and social relations, his occupations, his political, cultural or other activities, his place of business, the place from which he administers his property, etc. The circumstances must be examined as a whole, but it is nevertheless obvious that considerations based on the personal acts of the individual must receive special attention. If a person who has a home in one State sets up a second in the other State while retaining the first, the fact that he retains the first in the environment where he has always lived, where he has worked, and where he has his family and possessions, can, together with other elements, go to demonstrate that he has retained his centre of vital interests in the first State.”

http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html

This commentary identifies many criteria, of which the location of one's spouse is only one:
1. Family relations
2. Social relations
3. Occupations
4. Political activities
5. Cultural activities
6. Other activities
7. Place of business
8. Place from which property administered
9. Other

If all that mattered was where one's spouse was, then that would paradoxically make him a resident of Canada and her a resident of Israel!

I would say that if one consistently spends more than eleven months a year in Israel and one has a permanent home there, then it is far from clear that one is a resident of Canada. And it is sufficient for the "centre of vital interests" test to be unclear for residency to default to "habitual place of abode."

Here is an example of a decision in which it was determined that, although a taxpayer had his family in the US, the centre of vital interests was unclear. Since he spent most of his time in Canada, he was determined to be a resident of Canada under the "habitual abode" tiebreaker.
http://canlii.ca/t/fqts4

 

[torontosm]

Here is an example of a decision in which it was determined that, although a taxpayer had his family in the US, the centre of vital interests was unclear. Since he spent most of his time in Canada, he was determined to be a resident of Canada under the "habitual abode" tiebreaker.
http://canlii.ca/t/fqts4

The case you quoted is completely irrelevant. In that instance, the individual was working in Canada, spending over 330 days out of the year in Canada, earning income in Canada, owning and renting property in Canada and then didn't want to pay taxes in Canada. Of course the courts were going to rule that his grounds were nonsensical and he had to pay tax here.

As for the treaty, I haven't read it but I can guarantee you that there is nothing that excuses people from paying taxes in Canada if they are deemed residents of Canada. Treaties such as the one you mentioned will be used in those cases that are marginal where arguments can be made both ways. That is reinforced in the text that you posted. While all the criteria you mentioned CAN indeed be examined, some are afforded higher weightings than others. Family relations, property and clear social ties rank very high on the list, and as mentioned by Buletruck, there is no getting around this.

Conceptually, this makes perfect sense. Otherwise, everyone could park their families in Canada, pay zero tax and allow their families to take advantage of free schooling, free healthcare, welfare, social benefits, etc. That makes zero sense and would never be allowed by CRA, regardless of what country the person was a citizen of.

 

[frege]

The case you quoted is completely irrelevant. In that instance, the individual was working in Canada, spending over 330 days out of the year in Canada, earning income in Canada, owning and renting property in Canada and then didn't want to pay taxes in Canada. Of course the courts were going to rule that his grounds were nonsensical and he had to pay tax here.

As for the treaty, I haven't read it but I can guarantee you that there is nothing that excuses people from paying taxes in Canada if they are deemed residents of Canada. Treaties such as the one you mentioned will be used in those cases that are marginal where arguments can be made both ways. That is reinforced in the text that you posted. While all the criteria you mentioned CAN indeed be examined, some are afforded higher weightings than others. Family relations, property and clear social ties rank very high on the list, and as mentioned by Buletruck, there is no getting around this.

Conceptually, this makes perfect sense. Otherwise, everyone could park their families in Canada, pay zero tax and allow their families to take advantage of free schooling, free healthcare, welfare, social benefits, etc. That makes zero sense and would never be allowed by CRA, regardless of what country the person was a citizen of.

I'm not going to keep arguing about this, so I'm afraid we're going to have to agree to disagree. My advice to the OP stands.

 

[zawan12]

When is Canada going to close this loophole? Never.. - this weekend a Zimbabwe friend said he is going to do the same - leave wife and four 4 children aged 5 6 9 and 11 in Edmonton or Grand Prarry and leave to work in Guatemalea or Belize ? for them to become Canadians. Never is the answer ! That's why we love the new Liberal government. No checks and balances ! Express entry without any following if they follow the rules. Love Canada for their laziness on immigration.

 

[torontosm]

When is Canada going to close this loophole? Never.. - this weekend a Zimbabwe friend said he is going to do the same - leave wife and four 4 children aged 5 6 9 and 11 in Edmonton or Grand Prarry and leave to work in Guatemalea or Belize ? for them to become Canadians. Never is the answer ! That's why we love the new Liberal government. No checks and balances ! Express entry without any following if they follow the rules. Love Canada for their laziness on immigration.

You could always report him if you have his full name:

http://www.cra-arc.gc.ca/leads/

CRA is pretty good about following up on these matters