Tax residency status before moving to Canada permanently

[Dexmoody]

Hi all,

I’m hoping someone can clarify a tax-related issue I’m having.

Essentially, I will come to Canada shortly to activate my PR, but I have to finish a business project in my home country before moving permanently. I would like to avoid becoming a Canadian resident for tax purposes before I actually move permanently.

This website seems to suggest that this is possible under certain circumstances:
http://etaxaccountant.ca/personal-tax-canadians/immigrant-tax-planning/

I reached out to them, but unfortunately they charge $300 to explain how it works.

I did some research on the forum and found this post, which is somewhat related to my situation:

For a link to official information , search for CRA Canada on the Internet. Good luck sorting through all that information!

The short answer is that yes, you will be considered a Canadian taxpayer, and taxable on worldwide income. There are three primary criteria that make one a Canadian taxpayer:
1) One has access to a principal residence (not a seasonal residence like a cottage) in Canada throughout the year – whether rented or owned.
2) One has family dependants in Canada, like children and/or spouse.
3) One spends more than 183 days per year in Canada.

In CRA’s eyes you will be a taxpayer because of criteria 1 and 2.

The other criteria (bank account, driver’s licence, etc) are secondary considerations, and may deem you a taxpayer only if you have enough of them. But your case seems clear. You will have to declare your worldwide income to Canada, less taxes paid elsewhere (if the country where you earn that income has a tax treaty with Canada).

The amount of tax payable depends on whether the income is interest, salary, dividends, or capital gains -- and on how much you earn. The more you earn, the higher the tax percentage is in Canada. Best suggestion is to buy a tax-preparation program like Quicktax and input your numbers.

Now, you are probably aware that as a Permanent Resident you must spend at least two years out every five years in Canada, right? Spending only one month a year will cause you to lose your status.

Can anyone who has actually done this confirm that the information above is still current? Are there any additional requirements that I have to follow?

In other words, will I be in the clear if I don’t have a principal residence, have no dependents in Canada, and spend less than 183 days in that year in Canada?

Any advice would be much appreciated.

Cheers,

Dex

PS: Apologies if this has been discussed before, but I couldn't find a recent thread about it.

 

[Dexmoody]

Bumping this thread.

Can anyone confirm that I will not be considered a tax resident if I just enter Canada to activate my PR and then leave after a couple of days.

I will not:
- have a place to live in Canada
- have relatives or dependents living or remaining in Canada
- spend more than 183 days in Canada.

I'm also not planning on getting a bank account or do anything else other than activating my PR status.

Any advice is greatly appreciated.

 

[canuck_in_uk]

Can anyone confirm that I will not be considered a tax resident if I just enter Canada to activate my PR and then leave after a couple of days.

I'm also not planning on getting a bank account or do anything else other than activating my PR status.

You will not be a tax resident.

 

[Dexmoody]

You will not be a tax resident.

Thanks for your input.