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Rakko

Residency status

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Hello, I have a question regaring how to enter residency status.

What is the difference between
Immigrant, emigrant or non-resident / You were a non-resident of Canada for all of 2019
and
Immigrant, emigrant or non-resident / Information about your residency status / Non-resident  ?

Let's say, if one of my client is considered as non-resident for tax purposes, how should I enter ?

Thank you.

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The CRA’s definition of a Canadian non-resident for tax purposes is quite rigid. Generally, it involves a Canadian citizen, who works full time in a foreign country for most of the year, pays taxes, social security and retirement plans in that country, AND does not have any ‘significant ties’ with Canada (no spouse living in Canada, no real estate, nor home, nor motorized vehicle, no bank accounts). The CRA has excellent documentation describing the differences between non-residence and deemed not resident, as well as, emigrants and  immigrants. There are bilateral agreements between Canada and most other countries which outline where revenue is taxed. If there are no ties with Canada, and no revenue generated within Canada,  a Canadian non-resident for tax purposes is usually exempt from filing a Canadian income tax return.

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Hello clw, thank you for your reply.

Here is the most of my client's situation.

・They are in Canada with 1year working holiday visa, and they leave Canada once their visa has expired.
・Not planning on coming back to Canada as a resident.
・No family, no house, no cars or furniture in Canada. (no ties)


Let's say, a guy is coming to Canada with 1year working holiday visa on September 10, 2019,
and going back to Japan (his home country) for good on June10.
He was working at a Japanese restaurant during his stay in Canada, and
this is the only income he earned.

In this situation, he is not considered as a non-resident (length in Canada is less than 183days) ?

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According to Article 14 of the Canada/Japan bilateral tax treaty Canada-Japan Tax Treaty , your client is taxed only in the country where the income was generated. So income earned in Canada is only taxed in Canada, and not reported in a Japanese Income Tax return. If your client has a T4, or otherwise paid tax, CPP and EI, then he is considered a taxpayer from September 10 2019, and should file a tax return for 2019. Similarly for 2020 tax year, he will be a taxpayer until June 10th, date at which he will leave the country. 
For ‘travel work Visas’  if there is no refund or outstanding tax owed, the CRA will often waive the need to file a return, so you need to establish if there is a benefit to filing.

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Thank you, clw !

so in this situation, Even though he has no tie with Canada, he is a resident for tax purposes both in 2019 and 2020 ?
and not deemed resident or non-resident ? 

Then how should I input on ufile ? 
interview set up / Immigrant, emigrant, non resident... (second one from the top) / you immigrated to Canada (in 2019) or emigrated Canada (in 2020)
and not touch Information about your residency status ?

Thank you !

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Thank you clw, I have read this article before too and this is pretty helpful !

so my question now is, how to input this page (attached photo) when you use ufile pro ? 

ufile.png

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Hello Rakko, you would need additional information on the employer-completed TD1 form. Page 2 : if in 2019, 90% of his world income is from Canada, then you can apply the tax credits, if not then there are zero tax credits, which would seem unfair to me...!

You can also call the CRA’s international taxation number; there may be a simpler way. If you find one, please let us know!

The only situation that applies to your client’s situation in your screen shot above is the last one : ‘information about your residency status’

 

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Hello clw, thank you very much for always helping me !

>>if in 2019, 90% of his world income is from Canada, then you can apply the tax credits
Yes, this is the case.

>>The only situation that applies to your client’s situation in your screen shot above is the last one : ‘information about your residency status’
I don't need to use 'You emigrated from Canada in 2019' even if they leave Canada for good during 2019 ?

When I choose either non-resident or deemed resident from ‘information about your residency status’,
it seems they are still receiving Canada Workers Benefit, and also let me submit online.

I thought CWB was only for RESIDENTS, and I need to submit T1 by paper if they left Canada for good during 2019.

 

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Hi Rakko, the concepts of immigration and emigration imply that individuals intend on settling in permanently or leaving if already permanently  settled. I don’t see how this can apply to individuals on 1 or 2 year Travel/work visas, who never intend on becoming permanent residents.

I don’t see them completing Schedule A either, as the tax treaty implies that the income is reported separately, depending on its origin. To clear this up, I would contact the CRA (International taxation) mention the type of Visa, the country treaty, and how the Interview section of Ufile should be completed. From my experience, they are friendly, helpful and do not request any personal information.

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Hello clw, 

Thank you ! This is what I thought too ! 
I have been wonderign how come if you are leaving after staying in Canada only for 1year is considered as an emigrant ?!

Thank you, I will give them a call, hopefully I don't need to wait for an hour to talk to an operator !
 

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Hi clw !

No, I couldn't reached out both of them yet.

But when I contacted CRA regarding the same question before, the answer I got was they are considered as a
NON-RESIDENT. 

and I called Ufile to ask how to input, the lady I spoke with said
'Information about your residency status' would be Non-resident,
AND I need to use one of them as well; either 'election under s.216' or 's.217'.

But my clients receive neither rental income nor any benefits related to s.217,
so I don't know why I need to choose one of those. 

So I was confused how I am supposed to do :( 

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