I am a PR of Canada and planning to take up a job in the US. My wife and kids would continue to live in Canada. My spouse is working and we both are currently filing IT returns. What are the tax implications within Canada for me when workin in US?

Thx

Canada imposes tax on world income - till one has any ties with Canada in whatever form. Ties with Canada can include house/spouce/children/job and if you do not have that all, things like bank account, driving licence! Yes, technically, if you have NOTHING in canada except driving licence (which you might not like to give up since it is a difficult process to get one back - except for persons having Japanese or US licence), you will be considered having ties with Canada and will have to be assessed like a resident.

Unlike many other countries in the world, residence in Canada is not dependent on no of days you spend in Canada in a year, but is totally dependent on ties with Canada.

You will be taxed in Canada for the income you earn in US but there are special treaties between USA and Canada, which is much favourable than normal treaties between Canada and other countries.

The normal thing for any treaty is that while you are assessed for tax on your foreign income, you are given credit for any taxes paid to earn that income in the other countries subject to some formula at times.

You should be able to get something on such a treaty betweenUSA and Canada on the net. However, consider this as one of your major item to be looked into when planning a move.

Chandresh

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Chandresh

Advice is free – lessons I charge for!!

I have a slightly different opinion about the residential status.

An individual's spouse, dependants, and dwelling place, if located in Canada, will almost always constitute significant ties with Canada. In addition, a landed immigrant who has acquired a provincial health coverage, will be determined to be a resident in Canada.

However, driving license, bank A/C etc. are considered secondary ties, which alone are not sufficient to treat an individual (living outside) a resident of Canada for tax purposes. That's my understanding.

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Shibu

I had a similar understanding. However, to confirm things I read a book called Canadian Income Tax for dummies and it says that. Later, when I was intending to leave Canada for job in Asia, I had consulted lawyer and accountant here and they said that in theory, they are considered ties - but in practice, they look at the whole picture - and the whole picture is a subjective view since they look at the intentions of keeping ties!

Chandresh

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Chandresh

Advice is free – lessons I charge for!!

No doubt the situation is a bit ambiguous. The following url shows CCRA's Bulletin IT-221R3 concerning their interpretation of an individual's residence status for income tax purposes.

http://www.ccra-adrc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html

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Shibu

It is a good article.

Point no 8 under factual residence for persons leaving Canada clearly shows that even a driving licence and even memberships to professional organisations plus bank accounts are considered secondary ties!

It is not really easy to avoid Canadian Income tax - theoratically.

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Chandresh

Advice is free – lessons I charge for!!