Non-resident Canadian status

Hi,

I am a Canadian citizen and have moved to Dubai from Canada 5 years back and am working in Dubai since then. Every year I file zero tax return in Canada. I want to change my status to non-resident Canadian. I do not have any ties in Canada, no property, already stopped child tax benefits 4 years back which I did by writing a letter to Revenue Canada to stop it. I have one bank account only which I can close if required.

What do I need to do now to change my status to non-resident Canadian and is there any problem if I have not requested Canada Revenue to change the status 5 years back and filing tax returns every year.

Can I do the efile and mention there that I am out of Canada for tax purpose or do I have to fill the NR73 form. (I want to avoid this NR73 form, if I can)

Thanks,

Well, filing a "zero' tax return in canada was a big mistake, as filinga a tax return in Canada by definition requires you to report world income. It is NEVER proper to file a 'zero' return if you have any income whatsoever. This was poor advice you got. The correct step is to try as hard as possible to become tax non-resident, which is almost impossible for those who move directly to UAE.

While UAE does have a tax treaty with canada, the residency clause does not allow non-UAE citizens to become tax resident, and therefore you remain tax resident of canada.

Requesting to be treated as a non-resident -- especially to request this retroactively -- will surely require that you fill an NR73. The determination will be that you are NOT non-resident. You cannot e-file when non-resident.

You should have closed the bank account 5 years ago, but is that really the only ties you have? You have no RRSP? You have not visited regularly?

Hi

The best approach would be to submit a NR73 and allow the CRa to make a determination of your residence status. Generally your tax residence is a question of fact and not a question of making an election to be either resident or non resident.

There are implications to non resident status such as the Capital Gains Departure Tax and future non resident withholding tax on certain Canadian sources of income including interest, dividends and withdrawals from RRSPs.

I am a UK chartered accountant and chartered tax adviser and also a Canadian CGA, resident in the UK who specializes in providing tax services to UK, Canadian and American Expats. If you would like my assistance please feel free to contact me at kmlynch@btinternet.com or phone 44 1782 444256. Check out my website at www.lynch.pro

K

As I said, absent a tax treaty provison for becoming a tax resident for the other country, the NR73 will not be favourable. This and the fact that the taxpayer has not acted fully like a non-resident will make them taxable for the entire period, I'm afraid.

But, as already pointed out twice NR73 is your only hope for getting out of tax residency (that or becoming a UAE citizen...)

Is it possible if I can check my status from Revenue Canada website or from elsewhere or may be by calling them, just to know what my status (resident or non-resident) is in their database. As I mentioned that I have sent a letter to Revenue Canada 4 years back that I am out of Canada and to stop child tax benefit, don't have any RRSP. Since then I have not contacted them. Could it be that they have already changed my status to non-resident Canadian. Again I think I have messed up as every year I am filling tax returns.

Side note: If I decide to go back to Canada permanently in a few years time, can I take all my house hold, electronics items etc to Canada without paying any duty or will there be duty applied even if I am a non-resident Canadian.

No there is no database that you can access, and since you have filed a resident return every year, CRA has absolutely no reason to think you are non-resident.

And while you say you have not contacted them -- the letter you sent about the CCTB was good -- would you not agree that filing a return every year is indeed contacting them -- you have basically said every year since that you are resident with no income. Without a treaty provision, CRA can use any single minor tie as defined on NR73 as a reason to deny non-residency -- including most importantly the fact that you have not become resident of UAE.
I would try an get in touch with an accountant in canada who is familiar with UAE and non-treaty departure process.

I know that http://www.trowbridge.ca has such experts.


When you return (if you have any money left to buy anything) almost everything you bring back will be duty-free -- especially if you've owned it for a time. You can check the CSBA website for forms and tariff rates for "returning residents".