Do Canadians pay taxes on money made overseas?

I consulted a tax attorney here in my home town and this is the advice I was given:

1. Renounce your health care
2. You cannot, CANNOT have any property in your name or you will pay taxes upon your return.
3. Do not fill out the form declaring yourself a non-resident.
4. Give up all Canadian investments
5. Renounce your drivers' license.
6. Your contract should not have a definite start and end date. Try to leave it open, or at least give yourself the option to renew.

The key thing, he told me, is the notion of intent. You have to prove that you do not INTEND to move back to Canada. If you can do that then you're home free.

Hi all. I presently live in Turkey. I was here 2 1/2 years before I applied to the Canadian government for my non-resident status. I still owned a parcel of land but no house. I didn't have to give up my drivers license as you don't need one to be a resident of Canada or for any other country as far as I know. They simply told me they need to detirmine that I don't have enough ties to Canada to be considered one of it's residents. There is no tax agreement between Turkey and Canada, I would have to pay taxes in both countries if I could not get my non-resident status. They approved it, even retro active to the date I moved to Turkey.

We are moving to Dubai in a few weeks and I was sure that we would still be considered residents of Canada because we are going to be renting out our house here. I work for a group of Tax Accountants and they told me that it is, in fact, the intent you have. You have to make it look like you don't plan on returning. That being said we are renting our house because of the current housing market. As long as our tenancy contract states that we have to give the tenants at least 3 months notice we are fine. You don't have to surrender your driving license but you do have to get rid of as many ties as possible ie, health care, libraries, automobile associations, freeze RRSP's and RESP's, sell shares etc. We are keeping a Canadian bank account for our rental transactions which is fine. DO NOT COMPLETE THE FORM WHERE YOU'RE ASKING FOR VERIFICATION OF RESIDENCY FROM CRA! Just send in your tax return stating that you are a non-resident and, if like us, you are renting your house, just include those details on the return. When it comes down to it print off the necessary paragraphs in the Carswell Tax Income book and the CRA can't do anything about it.

I sent the NR73 form to CRA for determination of my non-resident status. The issue here is that we don't pay any taxes in middle east, and there is a question in statement of residency,'are you subject to income tax on your world income in your country of residence?'.

So can anyone help in answering this question?. all GCC countries have tax treaties with Canada, but can we justify that we are subject to income tax on our world income while in the middle east? This is something to do with zero taxation, but only a tax expert can answer this question.
Socondly, if one has already sent the NR73 form to CRA, how does now one file the tax return for the previous few years? does the return have to be filed, or can one file these altogether once he goes back to Canada.

Khaled

The short answer is that the CRA requires you to declare all overseas income if you are considered a "resident" of Canada. the determination of residency is based on a case by case basis and also on a number of factors. You declare non residency when you submit your tax return.

for example: you may own a home in Canada but it has to be shown that you are hands off with it. Rent it through an agency.

etc etc. You have to show that you have no intention to return to live in canada - certainly for the near future.

go to their website and you will find their discussion

Hope this helps

Dear Firends,

I am in a very similar situation as you all are. I actually spoke to Ministry of Finance Treaty Section and also CCRA Treaty department and they advised me that the treaty does not apply. And if you sever ties with Canada. you'r OK.

Has anybody gotten aNR73 evaluated by CRA confirming that they'd be treated NOn-resident.(even if they are NON-ARAB Canadian?

Don't sent in NR73 , CRA will come after.

Rgds
AQ2

I was abroad for 5.5 years with no ties to Canada. No DL, no health care, no insurance, no bank account, nothing. Upon repatriation I was told to produce the previous 3 years income statements and was taxed on the Canadian currency equivalent for those 3 years. This included employment in UAE, China, Indonesia, Thailand and Cambodia. Have challenged it in court and lost with the reasoning that I returned and did not fill out the form asking for residency verification.
On the other hand, I had a colleague repatriate after 2.5 years while keeping property, property insurance, DL and bank account and taxed nothing.
There would appear to be no consistency.
Good luck! You'll need it.

col_do

what about having properties in Canada but renting them out ?

Also, why did the lawyer say NOT to fill out the form declaring yourself non-resident? I thought this is the whole point if you want to be considered non-resident !

thanks for the info BTW...

The CRA determines the status of Canadians working overseas for tax purposes based on their residential ties to Canada. The list is extensive. The CRA does not want money to leave Canada. The CRA considers the following primary residential ties to Canada thus resulting in your worldly income being taxed:
-own property in Canada for residential purposes
-spouse or common-law partner residing in Canada
-a blood child or dependent child under the age of 18 living in Canada
-furniture, posessions left in Canada (storage)
Some of the secondary residential ties the CRA considers includes but is not limited to:
-bank accounts in Canada
-provincial health card (active)
-provincial drivers licence (active)
-Canadian addresses and phone numbers
-social ties--club memberships, professional licences
-Canadian Passport (active)
(The list is extensive.)
-visits to and length of stays in Canada
The CRA assesses the above secondary residential ties collectively. Having one may not necessarily affect your "non-residential" status for tax purposes.
The CRA has a tax treaty with the U.A.E., however, it appears to confirm that Canadians working in Dubai cannot gain residential status in Dubai. The CRA asserts that Canadians who want to become "non-residential" for tax purposes must be a "resident" of another country or have evidence establishing that they have significant residential ties to the country they have emigrated to in order for the CRA to deem them non-residential. Canadians who choose to work abroad should educate themselves with regards to the Income Tax Act before working abroad. The penalty for not disclosing worldly income before the CRA deems your status "non-residential" is severe.