Am I a nonresidentAm I a non-resident?


When it comes to your income tax obligations to Canada, you have to make sure you know what your residency status is - are you a resident of Canada or a non-resident? It plays a very important role in determining what your tax responsibilities and filing requirements to the CRA.

Generally speaking, when you normally, customarily, routinely live in another country where you are considered a resident, your tax status is probably that of a non-resident for Canadian income tax purposes. Unfortunately, it's not always that straight forward and there is not a simple CRA's checklist for determining if one is a non-resident or not. As stated on the CRA's website, "An individual's residency status is determined on a case by case basis and the individual's whole situation and all the relevant facts must be considered.". Nevertheless, the following is what the CRA would look at when considering one's residency status.

Primary residential ties include:

  • a home in Canada
  • a spouse or common-law partner in Canada
  • dependents in Canada

Secondary residential ties that may be relevant include:

  • personal property in Canada, such as a car or furniture
  • social ties in Canada, such as memberships in recreational or religious organizations.
  • economic ties in Canada, such as Canadian bank accounts or credit cards
  • a driver's licence or provincial health card

To determine residence status, the CRA considers all of the relevant facts on a case by case basis, including residential ties with Canada and length of time, object, intent, and continuity while living inside and outside Canada. While some cases could go either way, however, if you have all the residential ties as mentioned above, even though you no longer reside in Canada, it's probably very difficult to argue with the CRA that you are a non-resident.

Example

Let's look at an example: Raymond Lee who left Canada 7 years ago to live and work in Hong Kong. His permanent home is in Hong Kong, his wife and two sons are in the Hong Kong. In this case, Raymond Lee is clearly a non-resident of Canada.​


Now, say, Raymond Lee has a valid Ontario driver's license. Would it make him a resident of Canada? A single secondary tie, by itself, will not cause him to remain or become a non-resident. When examining the secondary ties and their impact on your Canadian residency status, you must evaluate the ties as a whole. If he starts to maintain more ties, either primary or secondary residential ties, the situation could become blurred and he may be considered a resident of Canada for tax purposes, and would therefore be taxable in Canada on his worldwide income.

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