Paying Taxes in Canada as a Permanent Resident while working in Europe

[Rob_TO]

You don't need to close your accounts or cancel your DL. You will not be declared a resident for tax purposes based only on those small secondary ties, especially if you aren't even using the bank accounts while you are outside of Canada.

Again, if ever audited in the future this would be entirely discretionary depending on the feeling of the auditor reviewing your case. The tax folio linked to above, specifically items 1.14 - 1.17, explain this in detail.

True a few secondary ties will not matter at all. However one should make sure they are not actively using the Canadian accounts while a non-resident, and don't go crazy with 10 or so secondary ties at various places. There is a point where too many secondary ties will turn into a problem, and you don't want to get close to whatever that number is.

 

[canuck_in_uk]

Again, if ever audited in the future this would be entirely discretionary depending on the feeling of the auditor reviewing your case. The tax folio linked to above, specifically items 1.14 - 1.17, explain this in detail.

True a few secondary ties will not matter at all. However one should make sure they are not actively using the Canadian accounts while a non-resident, and don't go crazy with 10 or so secondary ties at various places. There is a point where too many secondary ties will turn into a problem, and you don't want to get close to whatever that number is.

Having been a non-resident myself, I've been through it all. CRA is not going to take the time and expense to complete an offshore audit because a person has a bank account and a DL in Canada unless the person is actively running large amounts of money through the account.

 

[APPNOV2014NY]

Having been a non-resident myself, I've been through it all. CRA is not going to take the time and expense to complete an offshore audit because a person has a bank account and a DL in Canada unless the person is actively running large amounts of money through the account.

Absolutely agree with you on this.

 

[Rob_TO]

Having been a non-resident myself, I've been through it all. CRA is not going to take the time and expense to complete an offshore audit because a person has a bank account and a DL in Canada unless the person is actively running large amounts of money through the account.

No of course not, not for such a minimal amount of secondary ties. But what I'm saying is that the more secondary ties you pile on, the more chance there is you could run into problems in the future i.e. if you had the DL, multiple bank accounts, credit cards, investment accounts, etc etc. So just saying to keep open accounts in Canada to a minimum, that is all.

Also one could be audited by the CRA in the future for any unrelated reason, and CRA could go back many years to double check previous tax returns. In this case they could look closer at a previous claim of non-residency. And CRA would definitely like the tax dollars if they can get it from people who have abused the non-resident declaration to avoid paying Canadian tax. Can be a dangerous situation due to the undefined terms of what actually qualifies you for non-residence, and giving complete discretion to a random CRA auditor.

 

[canuck_in_uk]

No of course not, not for such a minimal amount of secondary ties. But what I'm saying is that the more secondary ties you pile on, the more chance there is you could run into problems in the future i.e. if you had the DL, multiple bank accounts, credit cards, investment accounts, etc etc. So just saying to keep open accounts in Canada to a minimum, that is all.

Also one could be audited by the CRA in the future for any unrelated reason, and CRA could go back many years to double check previous tax returns. In this case they could look closer at a previous claim of non-residency. And CRA would definitely like the tax dollars if they can get it from people who have abused the non-resident declaration to avoid paying Canadian tax. Can be a dangerous situation due to the undefined terms of what actually qualifies you for non-residence, and giving complete discretion to a random CRA auditor.

I understand what you are saying but I am responding for the OP, who has very minimal ties and will not be classed as a resident for tax purposes.

Even if a person is audited, CRA will not expend the resources needed for adding in an offshore audit just because someone had a bank account and DL in Canada. Unless the person being audited was dealing with millions of dollars, it will not be worth it for CRA to pursue. This is especially true if there is a double taxation agreement with the other country, as CRA wouldn't even collect enough to cover the costs of the audit.

 

[Rob_TO]

I understand what you are saying but I am responding for the OP, who has very minimal ties and will not be classed as a resident for tax purposes.

He mentioned DL,credit card, and bank accounts (plural). If it was me I'd close the bank accounts since there is not really any benefit to have them open and can easily do upon return. A credit card would be good to keep open just to build credit history as another user mentioned. Just my opinion.

I've seen what CRA audits can be like (not related to non-residency status) and would simply want to minimize risk. They can be incredibly thorough and invasive for what amounts to not so great amounts of money.