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Resident status

Discussion in 'Permanent Residency Obligations' started by ramysamir, Sep 13, 2019 at 5:29 AM.

  1. Hi
    I got my PR on 2017 and i do landing and return back home , i shifted my family to live in canada on august 2018 , my kids start school and we apply for child benefit but i was still working out of canada and visit them every 3 months , my question shall i will be considered as non resident , do i have to declare my inaternational income,,,,, also i start transfer my saving from overseas to our joint acount with my wife but i didnt declare for my bank savings at the time of landing shall be any taxes for these transfers my transfer was less than 100 k
     
  2. I don’t understand.

    Are your kids living in Canada? You said you shifted them to Canada and then said you visit them. So what is it?
     
  3. If your family is residing in Canada, then you are a deemed resident for tax purposes, and need to declare your foreign income. It's pretty simple actually...your kids are going to school for free, your family is using the social services, etc. so why would you not have to pay for it?
     
    canuck78 and Buletruck like this.
  4. Based on the information you've provided, you are a non-resident.

    Assuming your wife lives in Canada with your children, she will need to file taxes in Canada and will need to include your worldwide income in her tax return.
     
  5. If his spouse and children are in Canada, then he has significant residential ties in Canada and would be considered a resident for tax purposes. Being as that isn’t completely clear, I’d suggest you take the time to consult with a tax lawyer to clarify your status (depending on where your family is living).

    https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html
     
  6. I agree with suggestions to consult with tax professionals when preparing and filing tax returns.

    HOWEVER, if a spouse in Canada personally does NOT need to file a return under the applicable rules, such as a spouse with NO personal income, there is NO requirement to file a return REGARDLESS how much income the non-resident spouse gets. Of course this will constitute surrendering any claim to credits for which a tax return is required.

    And I am quite sure that the spouse of a non-resident does not necessarily need to include the non-resident's world-wide income in the tax return. Although not referencing the non-resident spouse's income likewise has consequences . . . Not including a non-resident spouse's income in the part of the return which asks for that information (a single entry in the forms which asks for total net income with no underlying detail, even as to whether it is earned income or the source) will affect credits and deductions that depend on the calculations requiring both spouse's incomes.
     
  7. If the spouse of a non-resident files taxes, they 100% must declare the income of the non-resident spouse. Failure to do so is tax fraud. There are no taxes paid on it but most benefits/credits are based on family income and therefore require the entire family income, whether it was earned in Canada or not.
     
  8. Since your family is in Canada you would be a resident for tax purposes but you should check your status by calling CRA. Your wife should be the one claiming child benefit since she is the one living with the children. Think you need to invest in accountant or just do some research. You should be proactive and solve these issues.
     
  9. Speaking from personal experience with nonresidency, Since the OP/spouse have applied for CCB, they are required to submit a tax return, income or not. As the OP has significant family ties to Canada, he is a factual resident of Canada and filing taxes would be required as well. This isn’t to say taxes would necessarily have to be paid to both countries, but it does have to be reported.
     
  10. To be clear, the Canadian resident spouse ONLY needs to file a tax return IF the CRA rules require that spouse to file a return. Being married to a non-resident spouse is NOT something that triggers the requirement to file a return, REGARDLESS of the non-resident spouse's income.

    And as I clearly stated, if the resident spouse does file a Canadian tax return, the resident spouse does not necessarily need to enter the non-resident spouse's income. (For example, the resident spouse can indicate the non-resident spouse's income is unknown and enter NO amount for this line in the tax return . . . which is NOT the same as entering zero.) BUT as I further noted, not including the non-resident spouse's income has consequences in terms of qualifying for credits/benefits.

    In particular, if the Canadian resident spouse files a tax return and does NOT include the non-resident spouse's income that is NOT in itself tax fraud. (Contrary to misinformation commonly posted here by some forum-resident, self-appointed, unofficial, and often nowhere near accurate apparent benefits-police.) Not including the non-resident's income at all simply precludes qualifying for those credits/benefits which depend on calculations taking into account both spouses' income.

    Under-reporting, or purporting to include a spouse's income without actually disclosing the actual income, is DIFFERENT than overtly NOT reporting the spouse's income. Yes, that would be submitting false information. Submitting false information is tax fraud.

    So sure, if a resident spouse submits a tax return PURPORTING to be eligible for certain credits/benefits or deductions, and PURPORTS to be reporting the non-resident's spouse income but does NOT actually report it, yeah, fraud. (Or misrepresents other material information, including by omission, that too would be fraud . . . such as dishonestly reporting marital status.)

    But again, there is NO obligation to file a return at all UNLESS the resident-spouse is personally obligated to file a return . . . and the non-resident spouse's income is NOT something which triggers a resident spouse's obligation to file a return.

    AND even if the resident spouse files a return, he or she can do so and elect to NOT include the non-resident spouse's income, recognizing this results in NOT being eligible for certain credits/benefits and deductions. That is NOT fraud.

    As an aside, I realize that there is probably a significant amount of benefits fraud perpetrated by SOME immigrants. And some obtaining of benefits by those who do not actually qualify but who are not informed of the rules sufficiently.

    But there is NO hint the query here in anyway was asking about how to get away with defrauding Canada Revenue or government benefit programs. The insinuations of fraud are gratuitous. Unwarranted.

    The basic questions are NOT complicated, BUT who must file a return and what must be reported in the return are dictated by Canada Revenue and Tax law. NOT immigration law or immigration status. And @Buletruck gets it right (well almost right):

    I noted "almost right" since just because a non-resident has a spouse and dependent children in Canada does NOT, not in itself, make that individual a resident of Canada for tax-purposes . . . generally that alone will NOT make an individual a resident for tax purposes, and beyond that it can be a lot more complicated than that (and remember even if an individual meets certain criteria that would ordinarily make that person a resident of Canada for tax purposes, IF that individual is otherwise a resident for tax purposes of another country with which Canada has a treaty governing these matters, he or she might NOT be a resident of Canada for tax purposes, subject to the individual meeting all tax filing obligations otherwise, noting that there circumstances which require a non-resident to file a non-resident return, but also including meeting the tax filing obligations of the other tax treaty country, the latter being a requisite to qualify for non-resident of Canada for tax purposes).

    Beyond that, as a general proposition (subject to applying the applicable rules to the particular facts in individual cases), persons asking for or otherwise receiving certain credits/benefits generally must meet all the rules for qualifying for those benefits, including filing accurate tax returns. BUT persons who are NOT asking for or receiving such credits/benefits do NOT need to file any return unless there are other rules pursuant to which they are required to file a return, AND even if they file a return they do NOT need to report a non-resident spouse's income.

    Which leads back to the response by @Buletruck referring to aspects of the OP's query not clearly showing just what the individual's residency status is, let alone other factors relevant to collateral issues, such as qualifying for this or that credit or benefit.

    Blanket misstatements that a resident spouse must file a Canadian tax return AND report a non-resident spouse's worldwide income are all too common in this forum. IT depends. And it depends on a lot more than just marital status and immigration status. Perhaps discussions in the conference about Settlement Issues, at https://www.canadavisa.com/canada-immigration-discussion-board/forums/settlement-issues.14/ , are more focused on such matters and include more accurate observations, but QUALIFIED TAX PROFESSIONALS, or at least reputable sites where tax-related questions are more reliably discussed, are a FAR better source for questions about tax filing obligations, including issues like residency for taxation purposes, and especially questions about what information must be reported in a tax return. Particularly since this forum has been corrupted by more than its share of misinformation regarding these matters.
     
  11. Well, having lost this argument to CRA in tax court recently (I had cut all ties to Canada including property, banking, RRSPs, health care, drivers licenses for close to 10 years......except for children from a previous marriage), I can tell you that, with few exceptions, even with a tax agreement in place, a spouse and/or family in Canada will most likely make you a “deemed resident of Canada for tax purposes” as it’s considered a significant tie. The OP should be filing taxes particularly since they have/ are claiming CCB...it’s clearly stated on CRA’s website.....not a lot to discuss.

    Note: Filing taxes is not the same thing as paying taxes.....

    File a return for 2018 if:

    https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/you-have-file-a-return.html
     
    torontosm likes this.
  12. The first sentence of my post was "IF the spouse files taxes". I never said in any way, shape or form that being married to a non-resident requires someone to file taxes.

    People either state no spouse and claim the benefits/credits or they state they have a spouse and give the income, usually still resulting in qualifying for some benefits/credits because the cap is quite high. We are not dealing with situations where people state that they have a spouse with unknown income, case in point, the OP and spouse receiving CCB; she has either not declared OP and his income or she has and still qualifies for benefits/credits. The fact that OP is asking whether his income should be reported indicates it is likely the former.

    I never said there was any fraud happening in OP's situation and no one made any insinuations that OP is asking how to get away with fraud. Are you referring to me as a "forum-resident, self-appointed, unofficial, and often nowhere near accurate apparent benefits-police"? If so, state that directly instead of passive-aggressively trying to allude that in a comment in brackets.

    No one said that immigration law or status dictates tax residency.

    Everything else aside, CRA is very likely to determine OP a deemed resident and required to file taxes anyways.
     
    Buletruck likes this.
  13. Are you going to appeal?

    Since even before disclosures like the Panama Papers, CRA has been looking at offshore tax evasion. It is a common occurrence for people who come under such audits to then claim non-residency in order to avoid paying taxes on their foreign income. The rest of the family (spouse and children) is usually living in Canada, going to school, claiming benefits, using healthcare etc. In this situation, CRA almost never accepts the non-residency argument. These people tend to be very high income, which is generally why they come to the attention of CRA in the first place.

    Unfortunately, that means that people such as yourself, where you genuinely cut all possible ties and where you (I'm assuming ;)) are not a very high income earner purposefully trying to avoid taxes, get grouped in and treated the same.
     
  14. Some tax-related queries are not particularly complicated. Easy to inform someone who is living and working in Canada, earning an income in Canada, they are obligated to file a Canadian tax return.

    But beyond the easy, FAQ-like Q&A, the answer to tax related questions are not readily stated by reference to definitive rules. The answer will often vary, and commonly vary widely, DEPENDING on a lot of particular facts and circumstances in the individual case.

    THERE ARE VERY GOOD REASONS FOR CAUTIONING THOSE WITH TAX-RELATED QUESTIONS TO SEEK ANSWERS FROM MORE RELIABLE SOURCES. Tax professionals preferably.

    What concerns me about many of the tax related observations offered in this forum is the extent to which they declare definitive rules, in the form "if X, then Y" (whether the author explicitly intends it to be definitive or not), WHEN applying the rules is NOT nearly so definitive but subject to a lot of It-Depends factors.

    The more common such expressions include:
    -- if you are a resident in Canada, then you must file a tax return (not always true; it depends)
    -- if you are a non-resident of Canada whose family is residing in Canada, then you must file a Canadian tax return (not always true; it depends), and
    -- -- some even assert it must be a RESIDENT tax return​

    There is a vast array of possible scenarios in which these statements are NOT true. For example, even though most Canadian residents are obligated to file a return, NOT all are obligated to file a return. As usual, IT DEPENDS. It depends on the particular facts and circumstances in the specific individual's case.

    For a non-resident of Canada, the vast majority have no obligation to file a Canadian tax return, neither a resident return nor a non-resident return. In addition to the billions of people in the world for whom this is the case, it appears there are tens of thousands of PRs and Canadian citizens living abroad who are not obligated to file a Canadian tax return, neither a resident return nor a non-resident return. But there are also many with widely varying situations which involve facts and circumstances which can trigger an obligation to file a return . . . a non-resident return for some, or even a resident return for those who are DEEMED a Canadian resident for tax purposes.

    And of course there are some key factors which have significant weight in determining when a person (PR or otherwise) residing in another country will be obligated to file a tax return, and sometimes even a Resident-return. Some are definitive. For example, Canadian source income requires filing a return; whether that needs to be a Resident-return or not still DEPENDS on additional facts and circumstances.

    Many of the factors are NOT definitive. The fact a non-resident of Canada has a spouse and family in Canada is NOT a definitive factor. Whether such a non-resident must file a return DEPENDS on additional facts and circumstances. And here too, some who may be obligated to file a return will be DEEMED a Canadian resident for tax purposes and must file a Resident-return, while in contrast, DEPENDING on the particular factors, others may only need to file a non-resident return.

    Of course there is also the problematic tendency to extrapolate a rule based on this or that individual experience, even though the individual experience often depends on numerous specific factors in that individual case, AND there is a wide, wide range of variables which can lead to a very different result for some other individual. This forum is rife with this sort of flawed reasoning . . . a lot of "I was OK in this situation, so you will be OK," or the converse, "I was not allowed this, so you will not be allowed this." Sometimes such observations correlate to what usually happens, but even then what might otherwise happen can loom very large, and can be extremely important, in another person's particular situation . . . as always DEPENDING on the particular facts and circumstances in that individual's case.

    I am NO tax expert, not anywhere near the outside lots let alone in the ballpark. But I am well enough informed to see a lot of flawed observations about Canadian tax obligations repeatedly posted here. Much is flawed merely to the extent it over-generalizes (a very common problem in this forum, much like any forum of this sort), which anyone looking for information here should be wary of anyway. BUT overall there is no indication, in this conference about PR Obligations anyway, that what is available here is of much use in resolving any tax questions other than the easy FAQs.

    Unlike many immigration issues for which professional help is only rarely needed, those with tax questions should be directed to seek OTHER MORE RELIABLE SOURCES OF INFORMATION. It is particularly misleading to give an answer which suggests the question is easily answered when it is not.
     
  15. Undecided, but I’m leaning towards not appealing. The penalty and taxes aren’t significant (as you said, I wouldn’t call it exceptionally high earner) due to the mutual tax agreements and taxes already paid in other countries. But don’t ever doubt that if CRA feels there is money owed, regardless of the amount, they will recieve their pound of flesh. They had notices to me within a month of starting work again in Canada for tax filing for the years I was out of the country.
     

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