New Immigrant tax benefit 183 days rule

[canpr2011]

Hello All,

Is there any tax benefit in immigrating after living 183 days outside Canada. Suppose I am to move in before the 183 days is over, do i have to pay taxes for worldwide income for 2014 that was earned prior to moving in to Canada & becoming a tax resident.

Thanks.

 

[Amadan123]

Hello canpr2011,

I think there may be some confusion here.

The 183 day rule (called the 'sojourner' rule) relates to those individuals who are otherwise not a resident of Canada to be deemed to be residents of Canada for tax purposes for the entire year if they stay in Canada for 183 days or more. If the test is met, you will deemed to be a Canadian resident for the full year and will be subject to tax in Canada on your worldwide income (barring any overriding restrictions from treaty provisions).

Madan Chartered Accountant team
www.madanca.com

 

[canpr2011]

Hi Madan,

If I were to land in Canada on Jun 15th & stay without leaving till 31st Dec, I would have stayed for 200 days in Canada for 2014. Now as per your note of 183 days or more rule, I understand I would be considered a resident for the entire year.

Now would I have to pay taxes for salary earned from Jan '14 till May '14 outside of Canada, although I had no significant ties with Canada during this period. Is there any provision that allows you not to declare this income but instead bring in all your savings at one go (which I believe is not taxed, but the capital gains on it is) & then pay taxes on all income, including capital gain within Canada beginning 15th June 2014.

 

[Amadan123]

Hello,

If you stay in Canada for more than 183 days, you will be a deemed resident for the entire year. This will mean that your worldwide income for the entire year (January to December) must be reported to the Canadian tax authority.

Madan Chartered Accountant team
www.madanca.com