Tax for year 2017 (became PR in early 2017 but left immediately)

[ybjianada]

Hi,

I know the tax season is almost upon us. I have been reading the pages on the Canada Revenue Agency website, but everything is so very confusing. I was wondering if people can help me here, or direct me to appropriate sources. But let me first state my situation:

I became a PR of Canada in January 2017, but left immediately to return to Singapore to work. During my "short landing" in Vancouver, I opened a savings account at RBC, and the interests earned in 2017 were a little more than $400.

I have been working in Singapore since Jan 2017, and will be moving back to Canada in the middle of this year (that is, 2018). Canada and Singapore have an income tax treaty. I am a Singapore resident for both 2017 and 2018. This means that I will pay income taxes to the Singapore authorities for earnings in both 2017 and 2018. At the same time, I want to make absolutely sure that I fulfill my Canadian tax obligations, since I will be applying for Canadian citizenship once I become eligible. I have the following questions regarding my tax status for 2017, as well as the tax implications of the date of moving back to Canada in 2018 (this year).

1. Despite the interest earned on my RBC account, I assume I was a non-resident for 2017, since I lived in Canada for less than 183 days in 2017 and I had no significant residential ties to Canada in 2017. Is this the correct conclusion?

2. Do I need to file taxes to the Canadian Revenue Agency this April for year 2017?

3. I have the choice to move back to Canada this year (2018) either in the middle of June or earlier, or in early July. In the former case, I will then have lived in Canada in 2018 for more than 183 days; in the latter case, I will then have lived in Canada in 2018 for less than 183 days. If I wish to avoid being taxed for my Singapore income earned in 2018 (from January to when I leave Singapore and move to Canada), does it matter which date I choose, given the existence of the income tax treaty between the two countries?

Thank you so much!!

 

[alok4best]

CRA does not follow 183 days in a financial year rule for determining tax residency. The very fact that you have a bank account in Canada where income was generated makes you a tax resident.
So to answer your question.
1. Incorrect. You are a tax resident of Canada for 2017.
2. Yes. Get help from a reliable tax consultant who can make sure that you do not end up getting double taxed.
3. Won't make any difference, since you are already a tax resident in Canada. So your decision will be driven by how tax residency in Singapore works. If being there less than 183 days helps you avoid filing IT return in Singapore, then I think it will make sense to move earlier to Canada. It still does not make any difference to how much tax you will pay(due to the tax treaties), just makes your life easier.

 

[ybjianada]

CRA does not follow 183 days in a financial year rule for determining tax residency. The very fact that you have a bank account in Canada where income was generated makes you a tax resident.
So to answer your question.
1. Incorrect. You are a tax resident of Canada for 2017.
2. Yes. Get help from a reliable tax consultant who can make sure that you do not end up getting double taxed.
3. Won't make any difference, since you are already a tax resident in Canada. So your decision will be driven by how tax residency in Singapore works. If being there less than 183 days helps you avoid filing IT return in Singapore, then I think it will make sense to move earlier to Canada. It still does not make any difference to how much tax you will pay(due to the tax treaties), just makes your life easier.

Thanks for taking the time to type your reply. However, I do think that CRA does consider the length of residence (specifically, 183 days) an important criterion in determining tax residence status: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/non-residents-canada.html

 

[Investocrat]

I believe you will be considered tax resident in Canada for 2017. Since Singapore has a tax treaty with Canada, you should be able to avoid double taxation...may need an accountant to help you sort that out.

Hi,

I know the tax season is almost upon us. I have been reading the pages on the Canada Revenue Agency website, but everything is so very confusing. I was wondering if people can help me here, or direct me to appropriate sources. But let me first state my situation:

I became a PR of Canada in January 2017, but left immediately to return to Singapore to work. During my "short landing" in Vancouver, I opened a savings account at RBC, and the interests earned in 2017 were a little more than $400.

I have been working in Singapore since Jan 2017, and will be moving back to Canada in the middle of this year (that is, 2018). Canada and Singapore have an income tax treaty. I am a Singapore resident for both 2017 and 2018. This means that I will pay income taxes to the Singapore authorities for earnings in both 2017 and 2018. At the same time, I want to make absolutely sure that I fulfill my Canadian tax obligations, since I will be applying for Canadian citizenship once I become eligible. I have the following questions regarding my tax status for 2017, as well as the tax implications of the date of moving back to Canada in 2018 (this year).

1. Despite the interest earned on my RBC account, I assume I was a non-resident for 2017, since I lived in Canada for less than 183 days in 2017 and I had no significant residential ties to Canada in 2017. Is this the correct conclusion?

2. Do I need to file taxes to the Canadian Revenue Agency this April for year 2017?

3. I have the choice to move back to Canada this year (2018) either in the middle of June or earlier, or in early July. In the former case, I will then have lived in Canada in 2018 for more than 183 days; in the latter case, I will then have lived in Canada in 2018 for less than 183 days. If I wish to avoid being taxed for my Singapore income earned in 2018 (from January to when I leave Singapore and move to Canada), does it matter which date I choose, given the existence of the income tax treaty between the two countries?

Thank you so much!!

 

[canuck_in_uk]

Hi,

I know the tax season is almost upon us. I have been reading the pages on the Canada Revenue Agency website, but everything is so very confusing. I was wondering if people can help me here, or direct me to appropriate sources. But let me first state my situation:

I became a PR of Canada in January 2017, but left immediately to return to Singapore to work. During my "short landing" in Vancouver, I opened a savings account at RBC, and the interests earned in 2017 were a little more than $400.

I have been working in Singapore since Jan 2017, and will be moving back to Canada in the middle of this year (that is, 2018). Canada and Singapore have an income tax treaty. I am a Singapore resident for both 2017 and 2018. This means that I will pay income taxes to the Singapore authorities for earnings in both 2017 and 2018. At the same time, I want to make absolutely sure that I fulfill my Canadian tax obligations, since I will be applying for Canadian citizenship once I become eligible. I have the following questions regarding my tax status for 2017, as well as the tax implications of the date of moving back to Canada in 2018 (this year).

1. Despite the interest earned on my RBC account, I assume I was a non-resident for 2017, since I lived in Canada for less than 183 days in 2017 and I had no significant residential ties to Canada in 2017. Is this the correct conclusion?

2. Do I need to file taxes to the Canadian Revenue Agency this April for year 2017?

3. I have the choice to move back to Canada this year (2018) either in the middle of June or earlier, or in early July. In the former case, I will then have lived in Canada in 2018 for more than 183 days; in the latter case, I will then have lived in Canada in 2018 for less than 183 days. If I wish to avoid being taxed for my Singapore income earned in 2018 (from January to when I leave Singapore and move to Canada), does it matter which date I choose, given the existence of the income tax treaty between the two countries?

Thank you so much!!

Hi

1. Correct, you are not a resident for tax purposes. It takes far more than just a bank account to be considered resident.

2. No, you don't need to file a 2017 return.

3. The 183 days really doesn't matter once you actually move to Canada; you will be establishing residential ties and therefore will be considered a resident for tax purposes. However, any income made BEFORE you became resident will not be taxed in Canada. Only income made after you move to Canada will be taxed here.

 

[ybjianada]

Hi

1. Correct, you are not a resident for tax purposes. It takes far more than just a bank account to be considered resident.

2. No, you don't need to file a 2017 return.

3. The 183 days really doesn't matter once you actually move to Canada; you will be establishing residential ties and therefore will be considered a resident for tax purposes. However, any income made BEFORE you became resident will not be taxed in Canada. Only income made after you move to Canada will be taxed here.

Thank you! I believe your analysis is correct . And this indeed puts my mind at ease.

 

[alok4best]

Hi

1. Correct, you are not a resident for tax purposes. It takes far more than just a bank account to be considered resident.

2. No, you don't need to file a 2017 return.

3. The 183 days really doesn't matter once you actually move to Canada; you will be establishing residential ties and therefore will be considered a resident for tax purposes. However, any income made BEFORE you became resident will not be taxed in Canada. Only income made after you move to Canada will be taxed here.

He not only has a bank account here, but he generated income in Canada as well. My understanding is that he is a tax resident. Anyway, I strongly suggest that OP take help of a qualified CA.

 

[alok4best]

Thank you! I believe your analysis is correct . And this indeed puts my mind at ease.

You believe it is correct because your confirmation bias is dictating so. I strongly suggest you seek help of a qualified CA. I strongly believe you were a tax resident of Canada in 2017. You generated income here. Anyway, it is eventually your decision how you wish to proceed.

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

You are going to be covered under secondary ties to Canada. Just being away from Canada for 183 days does not matter. You can still be considered tax resident, even if you have lived abroad for many many years based on what sort of ties you have with Canada.

 

[ybjianada]

You believe it is correct because your confirmation bias is dictating so. I strongly suggest you seek help of a qualified CA. I strongly believe you were a tax resident of Canada in 2017. You generated income here. Anyway, it is eventually your decision how you wish to proceed.

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

You are going to be covered under secondary ties to Canada. Just being away from Canada for 183 days does not matter. You can still be considered tax resident, even if you have lived abroad for many many years based on what sort of ties you have with Canada.

“You are a non-resident for tax purposes if you:

• normally, customarily, or routinely live in another country and are not considered a resident of Canada; or
• do not have significant residential ties in Canada; and
  • you live outside Canada throughout the tax year; or
  • you stay in Canada for less than 183 days in the tax year.”

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/non-residents-canada.html

"Significant residential ties to Canada include:

• a home in Canada;
• a spouse or common-law partner in Canada; and
• dependents in Canada;"

I think just based on the above, I should be considered a non-resident for tax purposes for 2017. Now, I do have 1 secondary tie in the form of an (interest-bearing savings) account (or 2, if you include my PR status). But I can't believe those 2 ties (at best) should elevate me to resident status. If they would, then CRA would have been more explicit about this.

 

[canuck_in_uk]

He not only has a bank account here, but he generated income in Canada as well. My understanding is that he is a tax resident. Anyway, I strongly suggest that OP take help of a qualified CA.

Had he made $40000, sure. But he only made $400 and has zero other ties to Canada. He is not a resident for tax purposes.