Sponsoring parents then leaving Canada temporarily

[calgary_eagle]

Hello,

I am in a conundrum : ??? and was hoping you guys can help.

I applied to sponsor my parents for PR on Jan 2014 and my application is one of the 5000 accepted that year. I am waiting for step 1 (sponsor approval) which is expected to be done sometime in 2017. Now, I can go overseas with my employer and get almost twice my current salary for a 3 years expat assignment. Should I wait tell 2017 get step 1 finished then leave? if I leave end of 2016 I could still show in 2017 my CRA taxes for 2016.

Any ideas would help. I

I am a PR and expect to get my citizenship in 2016.

 

[Rob_TO]

Note the parents sponsorship guide: http://www.cic.gc.ca/english/information/applications/guides/5772ETOC.asp
Sponsorship eligibility
In order to sponsor, you must…
-live in Canada;

Based on that, it sounds like no matter if you're a citizen or PR, if you move outside Canada for any extended time CIC could cancel your parents app. I don't think it matters if you have sponsor approval or not.

 

[screech339]

As part of your parent PR sponsorship, you must remain and reside in Canada during the entire PR parent processing until your parents land as PR.

You could be setting yourself up for income tax fraud if you claim to be a resident of Canada when you are in fact not a resident of Canada despite being paid from a Canadian company when you file your taxes. Remember CIC will see that you do not pay your taxes as a non-resident. You will end up getting it all back at income tax time filing as a non-resident despite paying taxes. CIC will want copies of your option C printout of all the tax years up to the year your parents expect to land. The printout will show that you have been a non-resident of Canada, thus disqualifying you to sponsor your parents.

If you continue to claim being a resident of Canada when you have been out of Canada more than 6 months in the year, you are committing income tax fraud.

 

[Rob_TO]

As part of your parent PR sponsorship, you must remain and reside in Canada during the entire PR parent processing until your parents land as PR.

You could be setting yourself up for income tax fraud if you claim to be a resident of Canada when you are in fact not a resident of Canada despite being paid from a Canadian company when you file your taxes. Remember CIC will see that you do not pay your taxes as a non-resident. You will end up getting it all back at income tax time filing as a non-resident despite paying taxes. CIC will want copies of your option C printout of all the tax years up to the year your parents expect to land. The printout will show that you have been a non-resident of Canada, thus disqualifying you to sponsor your parents.

If you continue to claim being a resident of Canada when you have been out of Canada more than 6 months in the year, you are committing income tax fraud.

Actually as lone as you keep ties to Canada, you can leave Canada forever yet still be considered a resident for tax purposes. So if they keep things like a regular bank account, credit cards, own a home, etc etc, and keep paying Canadian taxes as per the tax agreement with new country they're living in, then they can still keep filing taxes as a resident.

It's actually a difficult process to claim non-residency (usually done to opt out of paying Canadian taxes complete), as CRA will want to see proof that you severed all ties to Canada before they even allow you to do this.

Of course CRA will know physically they have moved outside Canada (the residential address will change for one), but they can continue processing taxes as a resident, even though they are not an actual resident physically. And also besides income tax filing, there are other ways that CIC can learn if someone has moved outside Canada.

 

[calgary_eagle]

Thanks guys for the reply


So after the sponsorship application is accepted (stage 1) you think the CIC will keep an eye on my movement? I thought if I am accepted as a sponsor then they'll (CIC) be dealing directly with my parents until they land.

Based on what you guys are saying I am risking having the application being rejected if I leave country (more than 1 year) from now until 2020 (based on current processing time). wow.

 

[screech339]

Actually as lone as you keep ties to Canada, you can leave Canada forever yet still be considered a resident for tax purposes. So if they keep things like a regular bank account, credit cards, own a home, etc etc, and keep paying Canadian taxes as per the tax agreement with new country they're living in, then they can still keep filing taxes as a resident.

It's actually a difficult process to claim non-residency (usually done to opt out of paying Canadian taxes complete), as CRA will want to see proof that you severed all ties to Canada before they even allow you to do this.

Of course CRA will know physically they have moved outside Canada (the residential address will change for one), but they can continue processing taxes as a resident, even though they are not an actual resident physically. And also besides income tax filing, there are other ways that CIC can learn if someone has moved outside Canada.

I had no problem claiming myself as a non-resident while working in US for 5 years. Not sure where you get the difficulty in doing so. I can understand that if the employer is a canadian sourced income.

 

[Rob_TO]

I had no problem claiming myself as a non-resident while working in US for 5 years. Not sure where you get the difficulty in doing so. I can understand that if the employer is a canadian sourced income.

As I said, the CRA wants to see you have severed ties to Canada in order to become a non-resident. There are many cases out there where people have tried to claim non-residency to avoid paying any Canadian tax, but have been refused due to maintaining financial and other ties to Canada, and CRA has forced them to pay tax as residents based on tax treaties in place with other countries.

So in your case you either severed enough ties to Canada that was sufficient to CRA, or if you maintained ties to Canada you were lucky CRA decided not to check further or audit you!

See here for more: http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html
Look at the "secondary" and "other" residential ties that CRA can use to deny your non-residency claim, and force you to pay Canadian tax. Remember CRA is looking for any ways they can to get Canadians working in other countries to continue paying Canadian taxes, so they try to make it difficult to become a non-resident on purpose.

So after the sponsorship application is accepted (stage 1) you think the CIC will keep an eye on my movement?

They may. Any time up until your parents are actually approved for PR and get their visa, CIC can ask for you to send updates on your current income or showing residency in Canada, to make sure you are still compliant. So to be safe you should remain living in Canada, and make sure your yearly income continues to meet the up-to-date LICO amounts.

 

[screech339]

As I said, the CRA wants to see you have severed ties to Canada in order to become a non-resident. There are many cases out there where people have tried to claim non-residency to avoid paying any Canadian tax, but have been refused due to maintaining financial and other ties to Canada, and CRA has forced them to pay tax as residents based on tax treaties in place with other countries.

So in your case you either severed enough ties to Canada that was sufficient to CRA, or if you maintained ties to Canada you were lucky CRA decided not to check further or audit you!

See here for more: http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html
Look at the "secondary" and "other" residential ties that CRA can use to deny your non-residency claim, and force you to pay Canadian tax. Remember CRA is looking for any ways they can to get Canadians working in other countries to continue paying Canadian taxes, so they try to make it difficult to become a non-resident on purpose.

They may. Any time up until your parents are actually approved for PR and get their visa, CIC can ask for you to send updates on your current income or showing residency in Canada, to make sure you are still compliant. So to be safe you should remain living in Canada, and make sure your yearly income continues to meet the up-to-date LICO amounts.

The funny thing was that I never imported my car to US. Kept ontario plates on it. I couldn't legally import the car into US since I had a lein on the car. So I kept the car in ontario plate using my brother's address to keep my canadian ties as TN visa does say that I must maintain canadian residency.

Another thing too is that I have taken out home buyers plan. I was suppose to pay tax on the remaining balance to CRA and dissolve the home buyers plan since I filed as a non-resident. CRA never came after me wanting the tax on the balance. When I came back to Canada, I am still paying towards home buyers plan balance. Guess CRA never caught on to it.