severing ties with Canada for tax purposes

mysharona · Post by **mysharona** » Thu Apr 25, 2013 6:27 am

As someone working both sides of the fence, at least I know where I stand with the IRS. As for Revenue Canada, well I guess I will just have to find out when I return to Canada. I much prefer the US tax system and how it deals with expatriates.

deegarvin · Post by **deegarvin** » Fri Apr 26, 2013 10:09 am

Here is a good article, simply written, about what we need to do to make sure we sever ties with Canada for tax purposes:

http://caribpro.com/Caribbean_Property_ ... In_Bermuda

deegarvin · Post by **deegarvin** » Sun Apr 28, 2013 2:55 pm

[quote="IAMBOG"]The thing is, the Canadian government likes to keep things in shades of grey, not black and white. That said, my principal (who is reliable and trustworthy) says our school has had 120 teachers go through it in the last seven or eight years and, as far as she knows, nobody has had a problem when they returned.[/quote]

Apparently, Canadian ex pats get nailed for taxes when they return quite often. I read an article by an international tax accountant from Vancouver and he talked about the many different scenarios where this would happen. I cannot seem to find the piece right now but will post it once I do.

Kali · Post by **Kali** » Sun Apr 28, 2013 4:07 pm

The best advice we were given when we went through the process was to talk to an accountant and get our hands on a copy of 'Canadians Resident Abroad' by Garry Duncan.

On the advice of our accountant skilled in this field we filled in the NR73e form (determination of residency status) and sent it off. We were warned that we might not get a reply but a year later we received some correspondence stating that our information had been received -- though no mention of whether or not we passed their test. However, since then we've not had any troubles over us not filling out Canadian taxes. (Though they did ask for some GST money back in the year we left.)

The only ties we kept with Canada were our passports, drivers licenses and credit cards.

jbiersteker · Post by **jbiersteker** » Sun Apr 28, 2013 4:34 pm

Hi Kali,

I take it that you didn't keep a storage unit? This is a stickler for us as we have furniture we want to keep but don't want to bring with us to Korea (ironically much of it is Korean furniture from our last stint there).

Thanks!!

IAMBOG · Post by **IAMBOG** » Sun Apr 28, 2013 11:21 pm

Hah, that's funny. The six bits of furniture we have remaining in Canada are from our first trip to Taiwan (antiques). We dumped them on my mother in law.

shadowjack · Post by **shadowjack** » Mon Apr 29, 2013 2:50 am

jbiersteker,

know that keeping furniture is a sign one plans to return to Canada and is a tie. Is there someone you can "loan" it to?

IAMBOG · Post by **IAMBOG** » Mon Apr 29, 2013 3:10 am

My mother-in-law always admired our furniture so it was easy to 'loan' it to her. If you have korean furniture (in that Japanese / Chinese hybrid style) I'm sure someone would love to look after it........I would!!

mysharona · Post by **mysharona** » Tue Apr 30, 2013 5:38 pm

As if you needed more excuses to sever your ties with Canada, read this

http://www.vancouversun.com/business/bc ... story.html

Although I don't trust the Fraser Institute, its food for thought.

jbiersteker · Post by **jbiersteker** » Tue Apr 30, 2013 6:31 pm

Hi mysharona,

I have to admit that this is one reason why we decided to leave Canada for awhile. I have seen reports that have said that within 10 years we will be paying 60% of all we earn to taxes. This is simply unjustified, Canadians need to start looking after themselves, not depending on the government to do everything. Short of the Communist nations, I think Asia has learned this lesson well.

Thanks!!

astarte · Post by **astarte** » Tue May 07, 2013 3:59 am

I guess my question is how long do you plan to be away?

We have purposely kept our residency, though we have cancelled our medical insurance because we want to continue to contribute to our RESPs and RRSP. We still get money from the Federal Government for our RESPs and As well as we are planning on returning we would like to continue to contribute to our CPP. (I know, I know there are people who say it won't be around by the time we retire.)

I have been torn about going through the process of claiming non-residency but as we are only going to be gone this time 2 or 3 years at the most, I don't think it worth it. I figure we will put as much in RRSPs as we can.

The country we are in does not have a tax treaty but we are able to deduct the taxes we have paid. As well, we are able to claim our helper's salary.

Also, my understanding is your first year you will be considered a resident anyways because you have to be out of country for 6 months. The only way around it is to leave in June.