world income and request for refund

[bae_girl]

Hello Friends,

Facts:
1. My sister is a Canadian citizen, went overseas end of 2012. Planned a short trip, ended up staying there until late 2015 (dual citizenship, met her future husband overseas). While away, she kept her bank account, credit cards, furniture, major personal belongings, in Canada. Our parents and I also stayed in Canada.
2. While away, she filed taxes in Canada for 2012,2013,2014 for Canadian income (doing remote work for Canadian organization). She also did some work overseas and paid local taxes (total local yearly income less than 10K cad. Her husband worked with local yearly income less than 10K cad.
3. Jan 2015 they get married, come to Canada in December 2015, him as sponsored PR landed immigrant.
4. In 2016 they both file taxes for 2015, her husband gets some GST credit
5. In December 2018 her husband gets a letter he must refund GST credit for 2015 + provide his AND hers world income information for 2015;

Questions:
1. In 2016 tax return for 2015 her husband was not aware he had to provide world income. Would that have consequences for him now?
2. He will provide his world income for 2015 now, as requested. His total income for 2015 (Canada and world) would be around 12K cad. Will he be taxed for his world income?
3. What kind of tax status did my sister most likely have while she was absent? She did pay taxes in both countries. Would she also be taxed for her world income?
4. There are no proof of documents onlocal taxes paid. What’s the best way to report?

Thanks in advance

 

[steaky]

Get professional help... preferably an accountant specializes cross-border taxes with the other country.

 

[BC4life]

Paying taxes in another country does not mean the income should not reported in Canada. She needs to report her worldwide income, as well as taxes paid on the overseas income, which could be considered credits and reduce her overall tax bill (there are many rules around that, including if there is a DTA between Canada and that country).

She will need to submit a T1 adjustment request with the CRA for the years she failed to report her overseas income.

For the husband if he became a tax resident in 2015, he will need to report his worldwide income but for the overseas income, he will not be taxed for the portion earned until the date he became resident.