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Income tax on world income

Discussion in 'Settlement Issues' started by FReza, Aug 23, 2017.

  1. Greetings,

    I am planning to make a short landing in Mar-18 and then return back to UAE where i am currently working. My query is that will i have to pay tax on the income that i earn in UAE once i go back to Canada for that particular year? Will i be treated as resident for tax purpose?

    Appreciate a reply on this.

    Thanks in advance
     
  2. Usually the expectation for you to pay taxes in a country is dependent on how long you live (in a particular year) in the country. Usually more than 6 months. There are also typically some agreements between countries about taxes paid on income in other countries. It would be worth spending some time with an accountant that has experience in international tax issues. Good luck
     
  3. So long as you don't establish ties to Canada (i.e., if you don't buy a house, if your family is not living in Canada, etc.), you will be a non-resident for tax purposes and will not have to pay any income tax on your Middle Eastern earnings.
     
  4. this is the right answer. tax residency works a bit differently in Canada. Your ties to Canada are more important than how much time you spend here. So if you had a drivers license or a home, and lived whole year outside Canada, you would still need to pay income tax on world income.
     
  5. What about opening a Canadian bank account and transferring money to it for a period of 6 months while being outside of Canada?
     
  6. That's fine. You will be subject to tax on any interest earned on the account, but the rest of your income will not be taxed
     
  7. Are you sure about it. Having a bank account is considered a secondary tie. So it can go either way.

    From 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

    Secondary residential ties
    1.14 Generally, secondary residential ties must be looked at collectively in order to evaluate the significance of any one such tie. For this reason, it would be unusual for a single secondary residential tie with Canada to be sufficient on its own to lead to a determination that an individual is factually resident in Canada while abroad. Secondary residential ties that will be taken into account in determining the residence status of an individual while outside Canada are:

    • personal property in Canada (such as furniture, clothing, automobiles, and recreational vehicles);
    • social ties with Canada (such as memberships in Canadian recreational or religious organizations);
    • economic ties with Canada (such as employment with a Canadian employer and active involvement in a Canadian business, and Canadian bank accounts, retirement savings plans, credit cards, and securities accounts);
    • landed immigrant status or appropriate work permits in Canada;
    • hospitalization and medical insurance coverage from a province or territory of Canada;
    • a driver's license from a province or territory of Canada;
    • a vehicle registered in a province or territory of Canada;
    • a seasonal dwelling place in Canada or a leased dwelling place referred to in ¶1.12;
    • a Canadian passport; and
    • memberships in Canadian unions or professional organizations.
     
  8.  
  9. When we say Canadian driving license does it refers to G level license or G2 as well.

    My plan was to open a bank account, apply for SIN & health Card and clear the G2 license on my initial 2-3 weeks time. Does this proves to be a strong secondary ties?
     
  10. You are not eligible for a health card until you move to Canada, and obtaining one prior to settling is illegal. Further, this is another secondary tie by which you are potentially subjecting yourself to income tax.
     
  11. Having a driving license will certainly make it more likely for you to be deemed a resident. Also does not matter whether it's a G1, G2, or full G license.
     
  12. Hey Freza, What did you do for this? appreciate if you can share your experience.
     

  13. Hi,
    Well i tried my best to keep my ties to the minimum. I just opened a current bank account and applied for SIN. I stayed a total of 16 days in 2018 calendar year. I filed my 2018 tax returns as a non resident and the returns got accepted.

    Hope this helps
     
  14. Hi,
    please which previous salary in UAE did you declare for CCB purpose the basic salary or basic salary with allowances (housing alllowance+transportation allowance..).

    thank you in adavance
     
  15. You need to declare everything.
     
    looking forward likes this.

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