Am I A Resident Of Canada?

by Tax Guy - Burlington Accountant on October 8, 2009 Print This Post Print This Post

Here is another question about leaving Canada that is related to the How To Become A Non-Resident published earlier this week.

The Question – Am I A Resident of Canada?

I left Canada 25 years ago and travelled around the world before settling in Central America. For the past 7 years, I have been living in and have obtained full residency in Panama.

I have a Canadian passport, a car in Canada as well as a bank account that receives my CPP payment (25% of my CPP is withheld as non-resident tax). But, I do not have any club associations, Canadian drivers license, nor do I receive medical care in Canada.

I plan to travel to Canada 4 or 5 months every year to visit friends and family

Do I HAVE a problem with CRA classifying me as a Canadian taxable resident?  Does my Panama residency help me to be classified as a non-resident of Canada?

When I left Canada 25 years ago, I had little money and never asked permission to leave

How To Tell If You Are A Resident

Whether you are a resident of Canada or not is a question of fact, which is a fancy way of saying that if the facts of your situation make it appear as if you are not a resident of Canada, then you are not a resident of Canada.

The CRA has an interpretation bulletin that explains how to determine if you are a resident of Canada for tax purposes.

Significant Residential Ties

If we briefly look at the situation and refer to the CRA interpretation bulletin, you are a resident of Canada if you have a home here, a spouse in Canada or dependent children in Canada. Since this does not appear to apply, we need to look at other factors.

Visits To Canada

Canada considers you to be a resident of you visit Canada 183 day in a given year. Since your planned visits are 4 or 5 months, you would be under the 183 days. However, you and your spouse should be aware of this rule and avoid being in Canada a total of 183 days in any given year.

Other Ties To Canada

You mention that you have a bank account and a Car in Canada as well as a Canadian passport. Individually these, by themselves, would not lead me to believe you are a resident but combined may be considered so. It appears, based on the facts supplied, that you may not be a resident of Canada.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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