Personal Finance

Can a "non-resident" Canadian Citizen return to Canada?

  • Last Updated:
  • Mar 9th, 2015 2:22 pm
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Deal Addict
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Dec 28, 2011
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rj2wells wrote:
Mar 8th, 2015 3:01 pm
If you REALLY are a non resident you do not owe Canada tax. If you become a resident again you will start paying tax again from that moment forward.

The question would be whether you think you are a non resident but CRA believes you continued to be a resident. In that case they would assess back taxes. You wouldn't be detained but you would get a big bill to pay.

This often happens when a Canadian works overseas while their family stays in Canada. CRA will continue to see that person as a resident even though they live and work abroad.
That its when the divorce comes in handy.
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Sep 30, 2008
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Somehow related.

Can someone be a nonresident for tax purposes while still being considered at resident by Health Canada?
Sr. Member
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Jul 10, 2013
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No. You lose all the benefits after 6 months. I have been living in Thailand for 2 years and I am paying Canadian taxes. I have no right to see a doctor in Ontario until I re establish my residency....even though I am paying federal, provincial and medicare tax from my self employment.
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Feb 7, 2008
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tdott wrote:
Mar 8th, 2015 3:39 pm
Somehow related.

Can someone be a nonresident for tax purposes while still being considered at resident by Health Canada?
You mean OHIP?
I believe being a resident of Ontario is one of mandatory requirement for OHIP.
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Aug 27, 2004
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parenthood wrote:
Mar 8th, 2015 1:51 pm
Simply...NO. It only becomes an issue when you try to say claim EI, when you haven't in fact paid into the kitty. Something most Canadians get up in arms about when say Refugees (these group is made of different nationalities) are provided for from this bucket of funds.
Huh???????????????????????? To claim EI, you need to have worked more than a minimum hours in insurable employment (i.e. in Canada) in the previous two years.

A non-resident who loses their job in a foreign country and moves back to Canada is not going to be eligible for EI...
Deal Fanatic
Aug 27, 2004
6629 posts
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Toronto, ON
tdott wrote:
Mar 8th, 2015 3:39 pm
Somehow related.

Can someone be a nonresident for tax purposes while still being considered at resident by Health Canada?
For health insurance purposes (OHIP and the like), you need to be PHYSICALLY PRESENT in Ontario for six months or 183 days or however they word it unless you fall within certain exemptions.

I would love to see how someone can physically spend 185 days in Ontario and convince the CRA that they are not a resident unless they are in a very niche category, e.g. someone working for a foreign employer who is sent here for a year or two to work on the implementation of something for a Canadian client (but such a person might not have the immigration status required for OHIP... it's an interesting question)...
Deal Fanatic
Feb 9, 2009
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If your a Canadian citizen you can return any time you want even 50 years later.
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what
Sanyo wrote:
Mar 8th, 2015 5:39 pm
If your a Canadian citizen you can return any time you want even 50 years later.
what about a hundred years from now, it may not be the same country
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Pointseeker wrote:
Mar 8th, 2015 5:42 pm
what what about a hundred years from now, it may not be the same country
Well if its not Canada then a different story
Newbie
Apr 24, 2014
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Toronto, ON
b1xvuk wrote:
Mar 6th, 2015 3:35 pm
What happens when a Canadian Citizen/Passport holder leaves Canada for good and severs his ties for let's say 5 years or 10 years with the purpose of relocating abroad but later changes his mind?
Can he return to Canada and if he does, what does he return as and can he be refused to live here?
What about the income he earned as a "non-resident" but Canadian Citizen outside the country?
Hi OP,

Try to help you as I'm in the same boat (Non-resident) and will be returning to Canada. Before I left (20 years ago), I researched this topic quite a bit. There is a Non-Resident form that you can get from the tax office that contains a lot of questions (something like 50-60) where if you answer "Y" to any of them, it is an "indicator" that you are a resident vs. non-resident. When I contacted the tax office, they said there was no black/white rule on which or how many "Y" you were allowed to have, before you were considered a resident, but they would do an assessment on a case by case basis.

From my memory, some of the questions included:

1. Maintain OHIP, i.e. continue to get coverage and payments after you leave
2. Maintain Drivers License, i.e. renew after it expires after you leave
3. Maintain a principle residence, which you don't rent out (I had a condo which I kept and rented out, but that's ok as it is then considered an investment).
4. Keep furniture/personal effects/car in storage
5. Keep Canadian bank account/credit cards
6. Have any dependents staying in Canada (wife, children), whilst you are not in Canada.
etc. I can't remember all of them, but you can get the full list from the tax office.

I also recall they mentioned that if you are out of the Country less than 2 years, they may be more stringent on the non-residency claim, but for more than 2 years, they would be more convinced you had real intentions on being non-resident.

Now for returning to Canada, please note the following:

1. Canada now taxes residents on a world-wide income basis (wasn't like that when I left). That means any and all income (interest, capital gains, etc.) that you receive after you return to Canada will become taxable going forward. For any stocks or real property you have overseas, Canada will assume you have sold and bought the investment on the day you resume residency in Canada, i.e. if you bought a stock long time ago, and it has gone up since then, you won't have to pay taxes on the gains that happened before you return, only gains after you return. However, if the stock has gone down since you left, Canada will assume you have sold and rebought it the day you return, so any gains (even gains to get back your losses), will be taxable. The burden of proof will be on you, so if you have investments, best to get valuation records for the day you arrive back.

2. I've read that you only need to file the T1 Income Tax form the year after you re-establish residency, i.e. if you arrive back late in 2015, you can file the T1 in 2017 instead of 2016. I think this is just an option though, to give you more time. But you can still file on time too.

3. There's a 3 month gap between when you return and when OHIP will cover you. There are some insurance companies that will insure you for the 3 month gap, but its expensive. Alternatively, you can ask your existing insurance company to extend coverage for 3 months after you leave.

4. The biggest headache is the drivers license. If you are not currently in one of the 8-10 Countries Canada has a reciprocal license tranferring arrangement with, you'll need to retake your written and G driving tests again, before you can get your license. Also, you need to do this within 60 days when you return, as the international license is only valid for 60 days (vs. 1 year) if you are becoming a resident again.

Anyways, thought I'd share more info (maybe than you asked) in case any of it comes in handy.

Good luck with your move...

Cheers
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Jul 15, 2009
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Pointseeker wrote:
Mar 7th, 2015 9:26 pm
So are you a resident in USA and Canada at the same time for tax purposes?
A key point of most tax treaties (including the one between Canada and the US) is to prevent individuals from being considered residents of more than one country at the same time. For example, the Canada-US treaty has a whole bunch of clauses (in Article IV) saying "where ... an individual is a resident of both states ... he shall be deemed to be a resident of the state in which ..."

The residency laws of each country are generally very inclusive in who they consider to be a resident. The tax treaty determines which country you are "more" resident in, and then forces the other country to consider you only resident in that one country.
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Jan 24, 2015
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Canadian in USA
There are exceptions to that. For example, if you have a spouse living in Canada and you are a resident of the United States, CRA will claim you are maintaining a residency in Canada, namely the spousal home, and that this fixed base excludes you from relief under that provision.
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rj2wells wrote:
Mar 9th, 2015 11:24 am
There are exceptions to that. For example, if you have a spouse living in Canada and you are a resident of the United States, CRA will claim you are maintaining a residency in Canada, namely the spousal home, and that this fixed base excludes you from relief under that provision.
So why would USA exclude you from that provision? That is why should you still be considered USA resident and the tie breaker does not apply?
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Jan 24, 2015
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Canadian in USA
Pointseeker wrote:
Mar 9th, 2015 11:36 am
So why would USA exclude you from that provision? That is why should you still be considered USA resident and the tie breaker does not apply?
The treaty says that provision doesn't apply when you maintain a "fixed base" in the country, such as a spousal home, an apartment you haven't rented out, or an office.

There are other exceptions.

The short story is that you really should talk to a cross border tax specialist because none of this is simple, there isn't some easy simple logical principle upon which it is all based. There is a long, complicated tax treaty with a lot of case law and a million little special cases and exceptions. It's government. Worse, it's multi-government tax code. It's complicated stuff.
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Jul 15, 2009
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rj2wells wrote:
Mar 9th, 2015 12:24 pm
The treaty says that provision doesn't apply when you maintain a "fixed base" in the country, such as a spousal home, an apartment you haven't rented out, or an office.

There are other exceptions.

The short story is that you really should talk to a cross border tax specialist because none of this is simple, there isn't some easy simple logical principle upon which it is all based. There is a long, complicated tax treaty with a lot of case law and a million little special cases and exceptions. It's government. Worse, it's multi-government tax code. It's complicated stuff.
Actually, the treaty explicitly covers the case "if he has a permanent home available to him in both States" (IV 2 (a)).

See the actual treaty here.

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