Tax Implications For Canadian Marrying Foreigner And Residing Abroad

by Tax Guy - Burlington Accountant on March 23, 2009 Print This Post Print This Post

Question: I am self-employed and for the past few years I have been living in Argentina but as I don’t have official residency and I maintain ties (credit cards, bank accts, investments, RRSPs) with Canada I continue to file my taxes in Canada as a resident. However later this year I will be marrying my Argentine boyfriend and we will continue to reside in Argentina. Once married I will be issued with a national identity number here and will be given legal residency. However since we have no plans to move to Canada at this time my future spouse will retain only Argentine citizenship and residency. What are the tax implications for this situation? I do not own any property in Canada and we currently do not own property in Argentina either. I do want to continue to contribute to my RRSPs as I don’t trust the economy of Argentina at all, least of all their pension system. Should I keep residency status in Canada and continue to file my taxes there? Can I claim my spouse on my tax return, or should we just file separately, him in Argentina and myself in Canada? I’m nt sure what the tax implications are for this situation and there is no literature on the CRA website that applies to this situation.

Take a look at the CRA site and search “non-resident”. You will find the requirements that determine your residency.

I would then suggest contacting the CRA to determine if you are a resident.  If you are not a resident or will take steps to sever residency you should speak with an advisor in Canada (BDO Dunwoody in Toronto or Deloitte can help).

In the end, marrying your boyfriend does not necessarily change your residency in Canada but may put you into a position where you might have to pay tax in both countries on the same income.

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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{ 5 comments }

CanadianInvestor March 27, 2009 at 7:58 am

Sounds quite similar to my situation. Canadian married to UK resident/citizen who has never been a Canadian resident. We live 11 months a year in the UK. I still pay taxes in Canada. CRA considers me resident for tax purposes. I didn’t sever my ties, therefore I’m still resident. The onus is to prove you have left. Any problem is likely more because Argentina will probably have tax laws that make you resident there too, with result that you become taxable in both countries. In that case the Canada- Argentina Tax Treaty or Convention (see http://www.treaty-accord.gc.ca/ViewTreaty.asp?Language=0&Treaty_ID=102404) is used to decide where you pay which taxes – it could easily end up different types of income get taxed in one country or the other, or both with a credit to avoid/minimize double taxation. It may help to look at my blog post of April 28, 2008 where I made a table of different types of income for a UK-Canada situation since the treaties are all based on the same model and resemble each other. http://canadianfinancialdiy.blogspot.com/2008/04/canadian-earning-uk-income-and-double.html
Another excellent resource is the book Canadians Resident Abroad by Garry Duncan and Elizabeth Peck, which discusses mostly residency and tax issues.
Good luck

Tax Guy March 27, 2009 at 8:16 am

@ Canadian Investor:

Great comment! This issue is something I come across frequently. In your case are you also taxable in the UK as well and how do you handle that?

TG

John August 10, 2013 at 11:22 pm

If I go through the process of non resident, what is are the rules as to coming to visit ? I can not find anything on this subject matter.

Tax Guy - Burlington Accountant August 13, 2013 at 4:55 am

Are you asking about taxes or immigration?

John August 15, 2013 at 10:47 am

Hi,

If I go through the process properly in detail about becoming a Nonresident for tax purposes, meaning I wish to do business outside of Canada and Not pay any tax and to build a foundation for charity, How often can I come back to visit the kids, go fishing a couple of times or perhaps skiing ? Does the 182 day rule fit here? I just don’t see any clarity here.

Regards, John

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