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Discussion Starter · #1 ·
Hi all,

I'm planning on moving to Dubai in early 2014 and I'd like to get some clarification on some tax issues.

I want to be able to file as a non-resident for obvious reasons, and I've been able to find some information on this so far on this board (thanks!)

I haven't' been able to find any information about other investments I hold though:
  • Restaurant/Business: I'm a minority owner in a restaurant, and do not help in the day to day operations. Do I need to divest from the restaurant? Or can I keep my investment and still receive payouts to my bank account?
  • Stocks/Mutual Funds: I have an trading account with interactivebrokers.ca, can I keep this account and still use it to actively trade? Or do I need to divest all my holdings?
  • RRSP/TFSA: I saw a post where someone said it was ok to keep these accounts, although you can't contribute to the accounts. Would I still be allowed to actively trade using the accounts though?

Thanks for your help! Below is the list of what I've gathered from other posts (other Canadians may find it helpful)

General
  • Do not file the non-resident application form
  • Cut "as many ties as possible"

Things you can have/keep in Canada
  • one Canadian credit card
  • one Canadian bank account
  • drivers license
  • house/property, but it needs to be rented out to someone at "arms length" (not a family member/friend)

Things you need to get rid of
  • cancel your provincial health benefits (I assume this means cancelling your health card?)
  • car
  • a mobile phone lan
  • your library card
  • Furniture

If any of this is incorrect, please let me know.
 

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I think you should talk to an accountant who specializes in non-resident status tax. It looks like you'll have financial interest in Canada while declaring non-resident so this makes your yearly tax submission a little bit more complicated than someone like myself who got rid of most of his investments before coming out here.

I don't know which part of Canada you're from but my company, based out of Calgary used PwC to help me sort out my non-resident status. I am sure there are some good accountants out there who can give you a good advice on your specific situation.

On that note, in general, my understanding is that the Canadian government never wants you to stop investing in Canada, that could be property, restaurant business, RRSP etc. Pulling your investment isn't in Canada's best interest. I understand that you'd be responsible for paying 25% tax on all your income generated from investments in Canada. If I'm not wrong, you are suppose to submit this tax on a monthly basis as well.

I'm sure other members more knowledgeable on the forum will provide a better insight on your situation but I would still recommend you talk to a professional. It's worth it! You don't want to miss something and then end up getting audited when you go back to Canada.

Good luck with the move.
 

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We consulted a tax accountant before we left, and he told us we could keep our RRSP/TFSA accounts but not contribute. I'm not sure about trading within them or about the stocks/mutual funds.
 

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Hi all,

I'm planning on moving to Dubai in early 2014 and I'd like to get some clarification on some tax issues.

I want to be able to file as a non-resident for obvious reasons, and I've been able to find some information on this so far on this board (thanks!)

I haven't' been able to find any information about other investments I hold though:
  • Restaurant/Business: I'm a minority owner in a restaurant, and do not help in the day to day operations. Do I need to divest from the restaurant? Or can I keep my investment and still receive payouts to my bank account? you should def talk to an accountant regarding this.
  • Stocks/Mutual Funds: I have an trading account with interactivebrokers.ca, can I keep this account and still use it to actively trade? Or do I need to divest all my holdings? we also had an IB account but had tapered off much of our trading activity within that so we ended up closing it. now that we are in Dubai, we have reopened an IB account but in the US. so it is still offshore to us as UAE residents [good for several reasons i can explain later] but also allows us to trade globally. you may PM me if you'd like to know a bit more about the us global IB account. we just set it up.
  • RRSP/TFSA: I saw a post where someone said it was ok to keep these accounts, although you can't contribute to the accounts. Would I still be allowed to actively trade using the accounts though? yes you can keep them BUT you must have them declared non-resident accounts. you will no longer be able to contribute to them however you may still adjust your investments. in 2 years time as a non-resident you may withdraw finds at the capital gains tax of 25%. we have a self directed RRSP and so continue to make changes to our investments.

Thanks for your help! Below is the list of what I've gathered from other posts (other Canadians may find it helpful)

General
  • Do not file the non-resident application form CORRECT! 9 out of 10 accountants will advise you not to. it is not mandatory and if anything just red flags you as someone to have more interest in. simply file your last return as a non-resident and leave it up to them.
  • Cut "as many ties as possible" correct. the goal is basically to show you have no intention of returning. you are severing ties and creating a new life for yourself in another country.

Things you can have/keep in Canada
  • one Canadian credit card yes, and one should be enough anyway. use it only when you have to for example online purchases or pay at the pump when you go back to canada.
  • one Canadian bank account yes. we have one still [jointly held] and we use it to pay the cdn visa, hold some money offshore from UAE and email money transfer to family when they buy nieces and nephews bday gifts or send us stuff. there doesn't seem to be a system for e-transfers here. :rolleyes:
  • drivers license do not keep your license. when you get to Dubai and receive your residency, transfer your license to a UAE one. there is no need to actively call the ministry and cancel it, but don't renew it, let it expire, and when you go back to visit and need a rental car, don't use your can license. this is often considered a strong tie.
  • house/property, but it needs to be rented out to someone at "arms length" (not a family member/friend) yes, and usually for minimum 1 year lease. and never stay there when you go back to visit, even if it's empty.

Things you need to get rid of
  • cancel your provincial health benefits (I assume this means cancelling your health card?) yes, although our accountant said it wasn't necessary to actively cancel it. simply don't use it. never. when you go back make sure you have some other health insurance coverage. do not use OHIP!
  • car totally, another strong tie if they see you keeping a car to use when you return.
  • a mobile phone lan i kept my mobile number as i had had it for 15 years and of course wanted to have it the same for visits. however, i cancelled my contract and switched my number to pay as you go so the SIM is only in use when i'm in toronto.
  • your library card get rid of this along with any other affiliations including unions, professional clubs, etc. these are all considered strong ties.
  • Furniture well, if you put a whole bunch of furniture in storage indefinitely, then what does that say about your move?? that you plan to come back at some point and wanna still have your furniture! so yeah, if you're not bringing it here, then sell it.

If any of this is incorrect, please let me know.
we have a great accountant we used for all our non-residency/closing my corporation/severing ties/exit return issues and i highly recommend him. PM me if you'd like his contact info.

nice to see you've done some homework! and welcome to the sandpit :) let us know if you have any other questions you can't find answers to.
 

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Why don't you read the files issued by CRA ? They are very clear and if you have doubts you can call them they will explain and it is free 1-866 by the way. These files are updated quite often.

I always find disturbing that people would go to secondary source of information first rather than trying the primary source.

If you dont understand the primary source then hire a company to sort you out.

In a nutshell you need to read and understand the reasons for tax, retirements plans and how these affect Non resident Canadians. CRA has good documents about both.

You can keep your RRSPs/ TFSA accounts because they are retirement vehicles. Technically you could trade in these accounts because they are already sheltered. Obviously you cannot contribute towards it as per the rules since you will cease to be a Canadian resident unless you are making income from a Canadian source and if such you may be still considered resident.

Nothing impedes you to hold investments in Canada. You will need to file income tax for those.

I suggest that you call CRA and tell them " Look I am planning to become a non resident (live overseas), could you please tell me the CRA guides/ Bulletins for people owing RRSPs/ TFSA and with business investment in Canada for Tax treatment purposes ?"

You will be surprised to learn the amount of info available.

Don't be shy. Come clean upfront and ask up or beware of the consequences. You cannot claim to CRA ignorance of the law should anything go wrong and accountants are not liable. Hiring 3rd party services does not preclude liability
 

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needless to say, i'm not suggesting the OP, or anyone, take my or anyone else's non-professional advice or information as final word. i am not a tax professional! just passing on what has been gleaned through consultation with more than one accountant and tonnes of research.

i think it's obvious the OP hsa done lots of research and he's being thorough by doing more of it now. i think you do him a disservice by suggesting it's a waste of his time to seek guidance here?!?

and i know from reading your previous posts CanuckSens, that you had a great and wonderful experience with the CRA when you exited Canada. and you filed the papers and talked to the agents and it was so lovely and everything went great. but that doesn't always happen. the CRA has guidelines but are sometimes unclear on the hard rules regarding non-residency and tax status so IMHO i think it's wise to be wary of calling them up directly and instead hiring an actual accountant to advise you. and i think it's doubly wise to do your own research not JUST by looking at CRA guidelines but also by looking into the practical experience of others. they aren't mutually exclusive you know.

now, nothing wrong with that eh?
 
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the CRA has guidelines but are sometimes unclear on the hard rules regarding non-residency and tax status
+1. CRA is terrible when it comes to non-residents. They are clear as mud!

Unless of course you file the paperwork and officially request them for the non-resident status (which, as mentioned before, isn't recommended by every accountant I have ever talked to). They basically give you a short list of items and say "don't do as many of these things as possible"

Seriously? that's fairly black and white isn't it. I still recommend a professional accountant who has experience in this field over what CRA has to say ... sure the accountant is not liable if you get audited but that's when you hire a lawyer to defend yourself :fencing:
 

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Discussion Starter · #8 ·
Thanks for the advice everyone! I'm definitely going to hire an accountant to get this sorted out properly.
 

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This is the most useful discussion i have found re taxes - one question: do you still have to file you world wide income but just as a non resident?
Also, what about returning? For example, you've worked in UAE for 2-3 years and now want to go back. What is the process? You just fill your taxes as a resident usual way (once you have your canadian income? Or what? Please let me know.

Thanks!
 

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This is the most useful discussion i have found re taxes - one question: do you still have to file you world wide income but just as a non resident?
Also, what about returning? For example, you've worked in UAE for 2-3 years and now want to go back. What is the process? You just fill your taxes as a resident usual way (once you have your canadian income? Or what? Please let me know.

Thanks!
I file my taxes every year and report my income but that's primarily because I have a property in Canada which I rent out. As far as I know, I was told to file my taxes regardless as a non-resident while I am in UAE.

I haven't moved back yet so not sure but from a very high level discussion I had with PwC, they said I'd simply be filing a resident tax return the year I return. I would have to consider taking over my property at a specific time before my return if I want to stop renting it out or sell it when I come back - but that's a slightly different story.

Again, even if you don't have any investments/properties in Canada, well worth having a discussion with an experienced expat tax accountant - even if it's a one time meeting.

Good luck
 

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This is the most useful discussion i have found re taxes - one question: do you still have to file you world wide income but just as a non resident?
Also, what about returning? For example, you've worked in UAE for 2-3 years and now want to go back. What is the process? You just fill your taxes as a resident usual way (once you have your canadian income? Or what? Please let me know.

Thanks!
if you are only going to be in the UAE for 2-3 years and then intend to return to Canada, then you will likely not be deemed a non-resident for even the time you are away as it is temporary and you have the intention to return. it is also more likely that you have not severed all residential ties knowing you will be back soon [stuff in storage? banks accounts? driver's license still valid? etc.]. so in that case you would have to file taxes each year with your worldwide income and be taxed on that as the CRA would still consider you a resident.

we have left canada indefinitely and have shown no intention to return. we have severed all residential ties and have no canadian investments. we have even drained our RRSP accounts as we have been non-resident for 2 years and the tax rate is 25% capital gains ;) we will no longer be required to file tax returns as non-residents.

regarding what happens when you return to canada i do not know the process. i never bothered to research it. but we are canadian citizens [different from being residents] so there should not be a problem if one wanted to return. just some paperwork perhaps :rolleyes:

but again, i speak from personal experience and research. please do consult a knowledgeable accountant on your situation and status.
 

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Thank you guys! I will talk to professionals of course, this is just for my own initial research and decision making :)

One more question came up - if you are still required to file taxes and pay them (i.e. you are still a resident in CRA minds), do you file your base salary only OR including all allowances? Please let me know.

Thank you in advance.
 

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Thank you guys! I will talk to professionals of course, this is just for my own initial research and decision making :)

One more question came up - if you are still required to file taxes and pay them (i.e. you are still a resident in CRA minds), do you file your base salary only OR including all allowances? Please let me know.

Thank you in advance.
sorry, I can't answer that one for you but i'm sure your accountant can. i would assume that it is still considered "income" though. and don't forget that if you are reporting and filing taxes [as a resident] then you are still entitled to the benefits of being a resident such as your deductions, rrsp contributions, etc etc.

also it just occurred to me that while you may have to report the allowances as income, there may be line items for the expenditures as deductions. anyway, good luck, would be curious to know how it goes. maybe you can update us on what your final status ends up being? would be helpful to others reading this thread in the future.
 

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i know this is an old thread, but the question does come up a few times, and in the interest of people who may be searching (considering tax season is here), here is a whole whack of information directly from the horse's website...

Income Tax Folio: S5-F1-C1, Determining an Individual's Residence Status

if you want to arm yourself personally with some information before consulting with an accountant who is proficient in non resident tax matters (which i strongly advise anyone to do) then read thorough the link...

and to answer a question that was asked about including allowances, yes if you are deemed a resident for tax purposes, allowances are included as income... bottom line is, if you are considered resident for tax purposes, the same rules apply regardless of your physical location or source of income... if it would have been considered income while you were in Canada, it would be considered income while you are in the UAE, and that also applies to the deductions you can claim... you generally cannot claim a deduction for housing or accommodation while being a salaried employee in Canada, and the same applies here...

just remember that a tax treaty exists between the UAE and Canada, and UAE banks are legally obligated to provide your financial information to the CRA if the CRA requests it...
 

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daaayuum...

this changes everything. I did a LOT of research before we moved here and I NEVER came across this tidbit. Good to know.

Now I understand the stories of people being away for several years and then being audited and having to cough up thousands of dollars in back taxes, interest and penalties.



just remember that a tax treaty exists between the UAE and Canada, and UAE banks are legally obligated to provide your financial information to the CRA if the CRA requests it...
 

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this changes everything. I did a LOT of research before we moved here and I NEVER came across this tidbit. Good to know.

Now I understand the stories of people being away for several years and then being audited and having to cough up thousands of dollars in back taxes, interest and penalties.
its publicly available information, even if it is legalese-speak... the full text of the treaty is published on the department of finance website...

Convention Between the Government of Canada and the Government of the United Arab Emirates 

read article 27 - exchange of information...
 

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Lots of great info here in this thread. I recently moved to the UAE as well and faced similar challenges and had similar questions.

From my research, you technically don't need to submit the NR73 form, as recommended by various tax specialists in non-residency. It is best to cancel as many ties as possible.
I didn't cancel my driver's license (CAN) but did convert it to a UAE a few weeks after I arrived in the UAE. The same for my wife, who is also in the UAE.

We have 1 property in Canada which is being rented out; in that case, it is suggested to file a NR6 form ASAP so you can pay the taxes on net rental income instead of gross rental income (which may be significant)! You will need to file the NR6 every year that you are a non-resident and still having CANADIAN rental income.

Furthermore, for health card, it is recommended to cancel it but not mandatory. And DO NOT USE IT! Same goes for your driver's license, DO NOT USE OR RENEW IT! This will flag you as a resident as you are still using "benefits" that were entitled when you were in Canada.

I kept a Canadian credit card for online purchases as well as a Canadian bank account for the rental income. Cancelled all my other ones so reduce the number of ties.
 
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