# Question for Canadians



## DanPM (Sep 6, 2011)

Hi,

I know that you have to pass to a process to be accepted as non-resident in Canada in order not to pay taxes from your income in Dubai, when do you inform Canada of this? I have heard is hard to pass this process, any tips or ideas?

Thanks in advance.


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## Guest (Sep 11, 2011)

DanPM said:


> Hi,
> 
> I know that you have to pass to a process to be accepted as non-resident in Canada in order not to pay taxes from your income in Dubai, when do you inform Canada of this? I have heard is hard to pass this process, any tips or ideas?
> 
> Thanks in advance.


It's not hard - you only have to be a non resident of Canada for 6 months to not pay taxes. If you do a search you should find a thread someone else posted about this recently


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## /dev/null (Aug 25, 2011)

DanPM said:


> Hi,
> 
> I know that you have to pass to a process to be accepted as non-resident in Canada in order not to pay taxes from your income in Dubai, when do you inform Canada of this? I have heard is hard to pass this process, any tips or ideas?
> 
> Thanks in advance.


You can inform CRA with form NR73 but everything I have read online says not to do it. It is not required and if they deny your status there is no turning back. 

This link helped me out. 
Tax for Canadian expats – essential information for Canadians working abroad.


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## DanPM (Sep 6, 2011)

/dev/null said:


> You can inform CRA with form NR73 but everything I have read online says not to do it. It is not required and if they deny your status there is no turning back.
> 
> This link helped me out.
> Tax for Canadian expats – essential information for Canadians working abroad.


Hi,

But then if you don't do it, they will want to charge taxes from your total income in Dubai (what I don't know is how they will find out this amount, maybe an agreement between UAE and Canada?). I see this as buying peace of mind instead of finding out year later that you own a ton of money to Canadian government, any thoughts?

Regards.


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## /dev/null (Aug 25, 2011)

That is the risk you take but as long as you can show you are a non-resident and you minimize your association with Canada you will be OK. You should talk to an accountant.


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## clean slate (Aug 25, 2011)

What constitutes severing ties to Canada?
Does one have to liquidate ones RRSP & RESP?
I left Canada few months ago taking up employment in Dubai. I still have a bank account/ credit card, etc. The house back home is leased though (at arms length).
My family also left Canada but my daughter will probably head back to Canada for college. Would supporting her cause problems.
I am seeking professional counsel but trying to wrap my head around the subject first.
Any advice will be greatly appreciated.


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## /dev/null (Aug 25, 2011)

clean slate said:


> What constitutes severing ties to Canada?
> Does one have to liquidate ones RRSP & RESP?
> I left Canada few months ago taking up employment in Dubai. I still have a bank account/ credit card, etc. The house back home is leased though (at arms length).
> My family also left Canada but my daughter will probably head back to Canada for college. Would supporting her cause problems.
> ...


I don't have the answer to many of your questions but they are discussed in the link I provided above. I did speak to our RESP rep and was told we cannot continue to contribute. He gave us several options on what to do with the money we have invested so far. You would definitely not want the Federal government grants going in every year. We can't receive the benefits of tax revenues without contributing tax!


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## DanPM (Sep 6, 2011)

*Ties to Canada for taxes*



clean slate said:


> What constitutes severing ties to Canada?
> Does one have to liquidate ones RRSP & RESP?
> I left Canada few months ago taking up employment in Dubai. I still have a bank account/ credit card, etc. The house back home is leased though (at arms length).
> My family also left Canada but my daughter will probably head back to Canada for college. Would supporting her cause problems.
> ...


Residential ties include:

-a home in Canada;
-a spouse or common-law partner (see the definition in the General Income Tax -and Benefit Guide) or dependants in Canada;
-personal property in Canada, such as a car or furniture;
-social ties in Canada.

Other ties that may be relevant include:

-a Canadian driver's licence;
-Canadian bank accounts or credit cards;
-health insurance with a Canadian province or territory.

Check Non-residents of Canada

Regards.


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## w_man (Apr 16, 2010)

DanPM said:


> Hi,
> 
> But then if you don't do it, they will want to charge taxes from your total income in Dubai (what I don't know is how they will find out this amount, maybe an agreement between UAE and Canada?). I see this as buying peace of mind instead of finding out year later that you own a ton of money to Canadian government, any thoughts?
> 
> Regards.


Yes - it does give you a peace of mind but every accountant I have spoken to have suggested AGAINST filling this form. As someone mentioned above - if for ANY reason they reject your application, you have no choice but to pay taxes. The way it was explained to me was: You can either ASK to be a non-resident of Canada or simply DECLARE that you are non-resident. Nothing wrong with either and if you DO get audited when you declare to be non-resident - make sure you have cut all your ties to Canada and you will be OK.

Someone mentioned above that they have bank accounts/credit cards. I was told you can maintain a bank account if you have an 'investment' property in Canada which you are renting out through a property management company but the credit cards are a bad link. I was informed I could keep one as long as I don't use it often (by keeping one you maintain a good credit history in Canada but by using it regularly it becomes a liability). I am also told trying to support a child who's attending UNI back home can become a problem. She should be able to move back though but supporting her and giving her 'gift' for money is a grey area.

End of the day - CRA has a very greyish rule for non-residency - it's all subject to interpretation thus uncomfortable. As a non-resident, your lifestyle in Canada should suggest that you are NOT planning on coming back and any link you have is for investments only.


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## clean slate (Aug 25, 2011)

Does anyone know if keeping RESP (not contributing anymore) for use by sibling is problematic? After all, there are several International universities that are recognized by RESP.

One other thing, is filing for and obtaining non-residence status a guarantee non-residence status can't be revoked? I.e. If questions are asked and status has changed in a year or two such as say supporting a daughter or son going to uni in Canada, etc

Does anyone have experience in setting up tax for leased property of non-resident?

The answers and exchange on this platform have been illuminating and I think would be useful to a lot of Canadians recently moved abroad or thinking of doing so. Thanks everyone.


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## w_man (Apr 16, 2010)

Not sure about RESP and I would suggest you discuss this with an accountant who specializes in non-residence taxes. 

If you submit the appropriate form and request for non-residency status from the government - they are still entitled to audit you. Just because you fill in a form claiming that you won't keep a car in Canada or a house rented to your friend doesn't mean they'll believe you. I wouldn't fill out this form thinking that you can avoid an audit in the future. Yet another reason why most accountants suggest not to bother with this form.

If you have a property in Canada which you'd like to rent out - it is highly recommended to obtain a property management company to do this for you. This will ensure the property is dealt with in an 'arm's length'. If you pick a GOOD property management company (believe me you don't want to cheap out here as they will have the power of attorney to do pretty much what they want plus you don't want some guys who are too lazy to care about your property), they will be able to help you with all the paperwork. The monthly charges are usually based on your rent eg: 10-20% of your rent would be their management fees. My management company has a fairly stringent process of accepting applications - they do complete background checks as well as credit checks. They then video tape the first walk through with the renters, they go in after 3 months for a walk-through, another at 6 months and then at year's end to re-sign. Also - it only works in your favor if you keep the lease term at 1 year or more and not short term rentals.

Ensure you pick a company that has experience with non-resident owners as they can then manage your NR6/NR4 forms. If you are not making any profits eg: after paying mortgage, bills etc then you should simply fill out the NR6 form so the property management company is not required to send 25% of your rent money to the government. If you are not sure if you'll make profits then you can fill out the NR4 form but the management company will then be required to deduct the 25% 'tax' and send it to the government each month. You can then do the math at the end of the year and claim it back in your taxes.

Basically - get a good accountant and property management company who are experienced in non-residents and you'll be fine. They won't come cheap so you can get all your questions answered and they can recommend you a solution based on your specific situation.

GL.


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