Non Residency Issues for Canadian Expats

[paulhen]

I am reaching out to any Canadian expat to Thailand in the last 3-4 years that has dealt with non-residency, implications of the Thai tax treaty with Canada, and the need or not, of filing tax returns in Canada. I have been in Thailand over 3 years, my wife over 1 year. Knowledgeable advice badly needed - costly accountants seem dysfunctional and tax filing is yet again upon us - yikes!!

[Jawnee]

I filled out the NR73 (see second link) before I left eleven years ago. The government sent a letter saying that I was now a non-resident for tax purposes. For the past eleven years I have only paid tax in Canada for any income earned in Canada. The first link talks about what is taken into consideration when they determine if you are considered to be a non-resident after you left Canada.

http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html#N107F1

http://www.cra-arc.gc.ca/E/pbg/tf/nr73/README.html

[zziffle]

As far as I know, the only difference between being a resident vs. non-resident is in income tax obligations. Non-residents don't pay provincial tax. However, they do pay a nearly equivalent surcharge on their federal tax. I ran my situation through some scenario calculations and came up with something like a $7.00 per year tax saving for going non-resident: not worth the trouble of the paperwork. Elected to remain a resident (as a ghost tenant at a relative's address where I can receive mail) and continue paying provincial tax.

[DirtyDan]

As far as I know, the only difference between being a resident vs. non-resident is in income tax obligations. Non-residents don't pay provincial tax. However, they do pay a nearly equivalent surcharge on their federal tax. I ran my situation through some scenario calculations and came up with something like a $7.00 per year tax saving for going non-resident: not worth the trouble of the paperwork. Elected to remain a resident (as a ghost tenant at a relative's address where I can receive mail) and continue paying provincial tax.

This is true only if your income/pension is still being deposited into a Canadian bank otherwise you're not taxed on int'l income that stays int'l.

First step is fill out the NR73 form as Jawnee linked.

The next step is to speak to a tax professional. Yes, it's expensive, but it's worth it when compared to the cost of paying taxes you don't need too! The big outfits like KPMG, and even TD bank, have int'l tax specialists - you'll need to speak with a specialist.

[Jawnee]

I went with the non-resident because I was earning money outside of Canada. If I hadn't, I would have had to pay taxes on this income as well as any money earned in Canada (dividends, capital gains, interest, etc.).

If you are earning pension income, you can fill out a request to have the 25% with-holding tax reduced to a percentage that would be similar to what a resident would pay.