Tax obligations question

[AminZ_2000]

Hi All,

I (Canadian citizen) currently work outside Canada and have residency permit in Saudi Arabia. I have been outside Canada for many years and I just visit Canada for one month from time to time (i.e. every two years). My wife (PR) will be going to live in Canada this year and stay there to get the citizenship. I may relocate to Canada to work there within a year or two. During the time I am working overseas and my wife is in Canada, do I have any tax obligations?

According to the below link, my wife may be considered a significant residential ties in Canada and that I have to apply for income tax, is this correct?

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

I am asking just to be in the safe side and not to find out in the future that I miss understood the law.


Thanks

 

[Canada2020eh]

Hi All,

I (Canadian citizen) currently work outside Canada and have residency permit in Saudi Arabia. I have been outside Canada for many years and I just visit Canada for one month from time to time (i.e. every two years). My wife (PR) will be going to live in Canada this year and stay there to get the citizenship. I may relocate to Canada to work there within a year or two. During the time I am working overseas and my wife is in Canada, do I have any tax obligations?

According to the below link, my wife may be considered a significant residential ties in Canada and that I have to apply for income tax, is this correct?

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

I am asking just to be in the safe side and not to find out in the future that I miss understood the law.


Thanks

That is an interesting scenario. I presume you are currently a non-resident for tax purposes. The rules from what I read don't specifically address it but if we work backwards from what is published, ie: you moved from Canada but still had significant ties here you are a factual resident for taxes. You don't currently have sig. ties but if you wife moves here you will develop sig. ties and that could/would change your status from Non-res to a factual resident. Meaning you have to file a CDN tax return.

A couple of suggestions, you could submit a NR 73 form to CRA and try to get an opinion, but this form is for a person leaving Canada not the scenario you have and I don't know whether they will give an opinion on a hypothetical situation.

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/nr73.html

The other would be to contact a Canadian tax lawyer for an opinion which I think they should be able to give to you.

 

[scylla]

Hi All,

I (Canadian citizen) currently work outside Canada and have residency permit in Saudi Arabia. I have been outside Canada for many years and I just visit Canada for one month from time to time (i.e. every two years). My wife (PR) will be going to live in Canada this year and stay there to get the citizenship. I may relocate to Canada to work there within a year or two. During the time I am working overseas and my wife is in Canada, do I have any tax obligations?

According to the below link, my wife may be considered a significant residential ties in Canada and that I have to apply for income tax, is this correct?

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

I am asking just to be in the safe side and not to find out in the future that I miss understood the law.


Thanks

Yes, this is pretty much correct. In fact, a spouse or common law partner in Canada is almost always classified as a significant residential tie (so it's stronger than a "may be considered"). See the details of the act:

Significant residential ties
1.11 The residential ties of an individual that will almost always be significant residential ties for the purpose of determining residence status are the individual's:

• dwelling place (or places);
• spouse or common-law partner; and
• dependants.

You can read more details of the act 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

 

[AminZ_2000]

Thanks Scylla and Canada2020eh for the input. The act is very complex to understand and not easy to determine which residency status applies to my case. I may have to contact a lawyer.

Regards

 

[scylla]

Thanks Scylla and Canada2020eh for the input. The act is very complex to understand and not easy to determine which residency status applies to my case. I may have to contact a lawyer.

Regards

I would recommend consulting with a tax specialist vs. a lawyer. This is ultimately a tax question.

 

[canuck78]

That is an interesting scenario. I presume you are currently a non-resident for tax purposes. The rules from what I read don't specifically address it but if we work backwards from what is published, ie: you moved from Canada but still had significant ties here you are a factual resident for taxes. You don't currently have sig. ties but if you wife moves here you will develop sig. ties and that could/would change your status from Non-res to a factual resident. Meaning you have to file a CDN tax return.

A couple of suggestions, you could submit a NR 73 form to CRA and try to get an opinion, but this form is for a person leaving Canada not the scenario you have and I don't know whether they will give an opinion on a hypothetical situation.

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/nr73.html

The other would be to contact a Canadian tax lawyer for an opinion which I think they should be able to give to you.

In

Hi All,

I (Canadian citizen) currently work outside Canada and have residency permit in Saudi Arabia. I have been outside Canada for many years and I just visit Canada for one month from time to time (i.e. every two years). My wife (PR) will be going to live in Canada this year and stay there to get the citizenship. I may relocate to Canada to work there within a year or two. During the time I am working overseas and my wife is in Canada, do I have any tax obligations?

According to the below link, my wife may be considered a significant residential ties in Canada and that I have to apply for income tax, is this correct?

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

I am asking just to be in the safe side and not to find out in the future that I miss understood the law.


Thanks

Typically if your dependents move to Canada you become a tax resident. If your dependents come to Canada and use services and qualify for benefits you are expected to contribute to the tax base. Make sense that you would have to pay taxes.

 

[wajahatid]

You will be deemed resident and will have to pay taxes in canada as well.