Taxes - Non-resident but I have a bank account in Canada

[alexwenner87]

Hello –

I'm a non-resident for 2019, been in Canada for 10 days after soft-landing. However, I opened a bank account, have a credit card and opened a TFSA with TD.

The canada.ca website under residential ties lists "economic ties in Canada, such as Canadian bank accounts or credit cards" under "Secondary residential ties"

Does this mean I'm considered a resident?

 

[canuck78]

Hello –

I'm a non-resident for 2019, been in Canada for 10 days after soft-landing. However, I opened a bank account, have a credit card and opened a TFSA with TD.

The canada.ca website under residential ties lists "economic ties in Canada, such as Canadian bank accounts or credit cards" under "Secondary residential ties"

Does this mean I'm considered a resident?

That will be up to CRA. If there is money in the TFSA yet that could push you into the resident for tax purposes category.

 

[alexwenner87]

That will be up to CRA. If there is money in the TFSA yet that could push you into the resident for tax purposes category.

There is money in TFSA, I have used the saving account and the credit card as well. However, I'm located overseas and been ever since my soft-landing. When I opened all these accounts, TD never told me anything about these implications.

OK, I'm panicking now. Is this a normal situation? What should I do?

 

[Copingwithlife]

There is money in TFSA, I have used the saving account and the credit card as well. However, I'm located overseas and been ever since my soft-landing. When I opened all these accounts, TD never told me anything about these implications.

OK, I'm panicking now. Is this a normal situation? What should I do?

It’s not TD’s responsibility to advise you . They are a bank , not an accountant . Canada’s tax system is one of self assessment, as such , you’re responsible to know or become aware of the rules . The old” I didn’t know”, won’t cut it.
How about calling up the CRA personal income tax line & inquire

 

[scylla]

Does this mean I'm considered a resident?

No - this doesn't automatically mean you are a resident. However if you are a non-resident with a TFSA, then your TFSA contributions are subject to a 1% tax for each month the contribution stays in the account.

 

[keesio]

However, I opened a bank account, have a credit card and opened a TFSA with TD.

As others mentioned, the TFSA can be an issue.

 

[alexwenner87]

Ok. I've been digging into this today

• In order to be considered a resident, you need to have residential ties to Canada. Particularly, in this case it goes under Secondary residential ties –> economic ties in Canada, such as Canadian bank accounts or credit cards.
• However, at the same time it also mentions "Generally, secondary residential ties must be looked at collectively in order to evaluate the significance of any one such tie. For this reason, it would be unusual for a single secondary residential tie with Canada to be sufficient on its own to lead to a determination that an individual is factually resident in Canada while abroad."

On top of that, a few unverified findings:

• Unless you own a home, or have a residence you still own in Canada, you're likely a non-resident for income tax purposes
  
• TFSA: Your financial institution reports your contributions to the CRA for you, so there is no need to report your TFSA on your tax return.
  • You’ve already paid tax on the money you deposit into your TFSA; once it's in your TFSA, it grows tax free
• If you have no income to report from Canada, and you're not resident, you don't need to file a return
  • The TFSA is not income that you need to report

 

[keesio]

I've been digging into TFSA a bit and I see mixed information. Some say that you must be a resident to open a TFSA. Others say that you don't have to be, but any contributions made to it as a non-resident is taxable. Probably best to confirm with a tax professional.

 

[alexwenner87]

I've been digging into TFSA a bit and I see mixed information. Some say that you must be a resident to open a TFSA. Others say that you don't have to be, but any contributions made to it as a non-resident is taxable. Probably best to confirm with a tax professional.

Actually, for this I also checked TD's website. There is a section Eligibility for non-residents of Canada.

I don't understand how much is the interest rate for TD's TFSA. However, the claim that TFSA is already 1% taxed and deducted might be true. I highly doubt that my 6K CAD contribution since April 2019, only made 42 CAD so far.

 

[canuck78]

You need to call CRA and they will determine if you have become a resident for tax purposes if you have an active savings account, credit card and TFSA. It’s the fact that you are actively participating in a tax sheltering account that may be an issue when it comes to whether you are a resident for tax purposes.

 

[keesio]

I don't understand how much is the interest rate for TD's TFSA.

You can have different types of investments in a TFSA. Hence the amount you earn would be based on that. It sounds like you have it in some basic savings account, which would explain the paltry interest rate

 

[Hajjarfady]

Hello, I have the same concern as yours.
I stayed 15days in 2019 and 12 days in 2020. The thing is I opened a bank account this year and I just received a document from the bank that I have to mail it back. I need to either declare that I am a canadian tax resident and provide my SIN or a tax resident of another country and provide the tax number of this country. Any advice in this regard? Thanks

 

[SCL]

I have a similar concern as well. Like I have been out from Canada for more than 10 yrs under jon resident status. I am planning to open a bank account back in Canada, is it possible?

 

[PrincessButtercup]

Hello –

I'm a non-resident for 2019, been in Canada for 10 days after soft-landing. However, I opened a bank account, have a credit card and opened a TFSA with TD.

The canada.ca website under residential ties lists "economic ties in Canada, such as Canadian bank accounts or credit cards" under "Secondary residential ties"

Does this mean I'm considered a resident?

Yes, you are a resident as defined by the CRA. The CRA defines resident as anyone who has made Canada their primary home, leaving the country they previously resided in, beginning the second you arrive in Canada.

If you want to know if you should file taxes for 2019 (assuming you don't have a job yet, and in that case the answer would be an obvious yes), legally you are supposed to file every year you are a resident. However, the CRA's main concern is if you have income to report.

My husband has works for the CRA, who is my source. Hope this helps!

 

[Shani@GTA]

I have a similar concern as well. Like I have been out from Canada for more than 10 yrs under jon resident status. I am planning to open a bank account back in Canada, is it possible?

Yes, You can do so. Are you non-resident for tax purposes? Did you file a departure return in the year of exit?.
I'm an expert in Canadian & US taxation working with a well know Canadian CPA firm. If you need any tax advice, please contact me at m.usman.acca13@gmail.com