Short landing &Taxation

[Sanazeh]

Hi,

I have a question about the rules of taxation for those PR holders who short landed and went back to their home country and continued earning money there.

What happens in this case when they return? The amount of money they will be bringing with them the next time, will it be taxed ? Do they have to file a tax return for the year for the income earned outside Canada though they did have a PR card?

If someone can please explain the rules & conditions in simpler terms, it will be really helpful!

Thanks,

 

[steaky]

Read the cra.gc.ca website for details.

 

[APPNOV2014NY]

Read the cra.gc.ca website for details.

As usual crappy and useless reply from steaky ;D ;D ;D

 

[spyfy]

You are mixing up taxes and duty: taxes are charged on your income. Duty is charged when you take goods across the border.

TAXES
are levied on your income, depending on your residence status at the moment you earn it.

Being a PR of Canada or not is completely independent of being a "resident for tax purposes". If you only spend some days in Canada for a short landing and do not rent an apartment/do not start a job here/do not physically reside in Canada, you are not a resident of Canada for tax purposes, so you don't pay taxes, unless you earn income from a Canadian source. Once you are a resident of Canada for tax purposes, you pay taxes on your "world income", i.e. everything is taxed in Canada.

But again: Being a PR or not has nothing to do with your tax status. There are thousands of ppl in Canada who aren't even PRs but still they are residents of Canada for tax purposes and pay taxes like everyone else.

DUTIES
is what customs ask you to pay at the border when you bring goods with you (or when they are sent to you via mail).

Cash is not taxed since Cash is not a good. You can take 1,000,000,000,000,000,000 Dollars in cash across the border and still you don't pay a single cent of duty on it, since it is just cash. However, as soon as you bring more than 10,000 Dollars you must declare it at the border. Do NOT lie to the customs officer. You have to declare it not because they want to charge you duties, but since they want to monitor international money laundering schemes.

In any case, bringing large amounts of cash isn't a good idea. Instead, transfer it internationally. Imagine your cash gets stolen during your travels.

And, again, the PR status is completely. completely. irrelevant to what you pay taxes or duties on.

 

[spyfy]

Oh and also: You only need to file a tax return if you
- are a resident of Canada for tax purposes, or
- you receive income from a Canadian source (e.g. a Canadian company paying you or you having a mutual fund investment in Canada etc.)

So no, if you only did a short landing and go back, you don't have to file a tax return since neither applies to you, probably.

The above is simplified since the actual rules for when you have to file a tax return are of course more complicated and have many special cases. But the general idea is the one above.

 

[sodapop123]

Hello,

Kindly request some assistance in my situation :

i am am planning a short landing for 10 days in May, and plan to apply for PR card+SIN+Bank Acct. etc.. and return to continue my job in my country of residence, for two or three more months. Ultimately i plan to move permanently (let's say) in August.

Based on my current understanding, one is either a 'resident for tax purposes' or Not, for a particular calendar/tax year .......... i.e. I cannot be considered a non resident for tax purposes from May through August and then a resident for tax purposes from August to Dec in the same year 2017. - Can someone confirm if i am correct in my understand / kindly correct me ?

Now,
Assuming i was correct in my above understanding, that would mean - whatever income i earn outside of Canada in between May(Short landing date) and August(Permanent move date), will need to be declared as foreign income on my 2017 Canadian taxes when i file them in 2018, which could potentially mean i would have to pay extra tax on this income (both in the country i earn income + in Canada .. obviously there is some tax credit i would get, but still at least some amount for sure). In such a case, taking the short landing approach actually negatively impacts me financially and i would be better off just moving permanently, if i can. - Again this is assuming my above assumption was correct, but if it was, request if someone can confirm this as well / add thoughts ?

Thanks for your advice !

 

[legalfalcon]

Hello,

Kindly request some assistance in my situation :

i am am planning a short landing for 10 days in May, and plan to apply for PR card+SIN+Bank Acct. etc.. and return to continue my job in my country of residence, for two or three more months. Ultimately i plan to move permanently (let's say) in August.

Based on my current understanding, one is either a 'resident for tax purposes' or Not, for a particular calendar/tax year .......... i.e. I cannot be considered a non resident for tax purposes from May through August and then a resident for tax purposes from August to Dec in the same year 2017. - Can someone confirm if i am correct in my understand / kindly correct me ?

Now,
Assuming i was correct in my above understanding, that would mean - whatever income i earn outside of Canada in between May(Short landing date) and August(Permanent move date), will need to be declared as foreign income on my 2017 Canadian taxes when i file them in 2018, which could potentially mean i would have to pay extra tax on this income (both in the country i earn income + in Canada .. obviously there is some tax credit i would get, but still at least some amount for sure). In such a case, taking the short landing approach actually negatively impacts me financially and i would be better off just moving permanently, if i can. - Again this is assuming my above assumption was correct, but if it was, request if someone can confirm this as well / add thoughts ?

Thanks for your advice !

Start here - http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

As a rule of thumb, when you land in Canada you DO NOT become a resident for tax purposes, unless you have stablished yourself in Canada and have significant residential ties. To maintain the PR status you will have must be physically present in Canada for at least 730 days (2 years) in every 5-year period. This means that after you land as a PR, you can go back to your country and stay there for 3 years, and then finally move to Canada and stay for 2 years and still have your PR status.

Upon returning to Canada, when you file your taxes, you will have to declare when you became a resident for tax purposes, and it is from that date that you calculate your income. Anything before that, is not included. You may want to consult an accountant to help you with it.

 

[sodapop123]

Thanks Legalfalcon.

I did read through the link you provided and a couple of others i found on the forum posts related to this topic.
I guess i'm still not able to find the answer to my question :

• If i land as a PR (short landing) in 2017 May and then stay only for a week and go back, continue my job in another country, and then permanently move in July/August to start living & working in Canada.... that would mean i would have to file taxes for the financial year 2017 in Canada. In this case,.... what would be the the date I became a "resident for tax purposes" in Canada ? - May 2017 or July 2017 ?

In other forum posts, people have debated/clarified this but all cases i saw were cases where : short landing was in one tax/financial year but permanent landing was in a future year. In my case both landings are in the same tax/financial year and hence my question.

I will contact a tax consultant as suggested as this may be a specific question to which we have no certain answer.

Thanks for you help !

 

[smtele]

@sodapop123, legalfalcon already replied to your question:

As a rule of thumb, when you land in Canada you DO NOT become a resident for tax purposes, unless you have stablished yourself in Canada and have significant residential ties.

In your case, the tax date needs to be July 2017. It does not matter if in the same year or a different year.

 

[sodapop123]

@sodapop123, legalfalcon already replied to your question:

In your case, the tax date needs to be July 2017. It does not matter if in the same year or a different year.

Thanks for bringing that up, my bad. That does answer my question

 

[Sanazeh]

Thanks for bringing that up, my bad. That does answer my question

Thanks Legalfalcon.

I did read through the link you provided and a couple of others i found on the forum posts related to this topic.
I guess i'm still not able to find the answer to my question :

• If i land as a PR (short landing) in 2017 May and then stay only for a week and go back, continue my job in another country, and then permanently move in July/August to start living & working in Canada.... that would mean i would have to file taxes for the financial year 2017 in Canada. In this case,.... what would be the the date I became a "resident for tax purposes" in Canada ? - May 2017 or July 2017 ?

In other forum posts, people have debated/clarified this but all cases i saw were cases where : short landing was in one tax/financial year but permanent landing was in a future year. In my case both landings are in the same tax/financial year and hence my question.

I will contact a tax consultant as suggested as this may be a specific question to which we have no certain answer.

Thanks for you help !

Hi, did you finally were able to figure this out? What is that you had to do? We are in a similar situation. We landed in Oct 2016, stayed for 13 days and went back. Now came back in July 2017 permanently. Do we or do we not pay taxes for the time we earned outside Canada from Nov 2016 till June 2017?

 

[pie_vancouver]

^No, you became resident for tax purposes on July 2017.

 

[sodapop123]

Hi, did you finally were able to figure this out? What is that you had to do? We are in a similar situation. We landed in Oct 2016, stayed for 13 days and went back. Now came back in July 2017 permanently. Do we or do we not pay taxes for the time we earned outside Canada from Nov 2016 till June 2017?

Above reply by 'pie_vancouver' is correct. July 2017 onwards for you guys...

 

[Windysummer]

You need to read the most up to date rules:

https://www.elegislation.gov.hk/hk/cap112CF@2014-04-10T00:00:00

I ain't no lawyer but I'm pretty sure, according to article 14, that you don't have to pay income tax on money that is made overseas if it is a non Canadian organization, company etc.

 

[AFUA2017]

Start here - http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

As a rule of thumb, when you land in Canada you DO NOT become a resident for tax purposes, unless you have stablished yourself in Canada and have significant residential ties. To maintain the PR status you will have must be physically present in Canada for at least 730 days (2 years) in every 5-year period. This means that after you land as a PR, you can go back to your country and stay there for 3 years, and then finally move to Canada and stay for 2 years and still have your PR status.

Upon returning to Canada, when you file your taxes, you will have to declare when you became a resident for tax purposes, and it is from that date that you calculate your income. Anything before that, is not included. You may want to consult an accountant to help you with it.

Thank you Legalfalcon,
So suppose I did soft landing then went back to home country, and I kept on remitting money to my Canadian bank accounts, should I pay taxes on these amounts?

Many thanks in advance.