Hi TravelGirl,
I've researched this at length and spoken to a tax consultant, so I can offer you a few tips. As Canuk noted, you actually don't need to file anything prior to leaving; you can simply leave and cease filing tax returns. If you choose to do so, you need to be absolutely certain that you will not be assessed as a resident or you could be on the hook for back taxes, penalties, etc.
That being said, it's important to understand HOW the Canada Revenue Agency (CRA) determines residency. They will assess residency based upon your actions as well as your intent. First are primary residential ties:
(a) dwelling place (or places),
(b) spouse or common-law partner, and
(c) dependants.
Having even ONE of these three will ALMOST ALWAYS indicate residency (by showing intent to return).
They will also look at secondary residential ties. This can include, but is not limited to:
a) personal property in Canada (such as furniture, clothing, automobiles and recreational vehicles),
(b) social ties with Canada (such as memberships in Canadian recreational and religious organizations),
(c) economic ties with Canada (such as employment with a Canadian employer and active involvement in a Canadian business, and Canadian bank accounts, retirement savings plans, credit cards, and securities accounts),
(d) landed immigrant status or appropriate work permits in Canada,
(e) hospitalization and medical insurance coverage from a province or territory of Canada,
(f) a driver's license from a province or territory of Canada,
(g) a vehicle registered in a province or territory of Canada,
(h) a seasonal dwelling place in Canada or a leased dwelling place.
(i) a Canadian passport, and
(j) memberships in Canadian unions or professional organizations.
Having one of those ties will not necessarily keep you as a resident (e.g. not feasible to dispose of Canadian passport), but if you meet a few of them, your case for ceasing residency is weakened.
Last but not least, other factors such as keeping magazine subscriptions or a safety deposit box can also work against you. In addition, you'll want to be careful about how many times you return to Canada, even for visits, as they may consider that to be indicative of a tie to the country.
The following link contains the information listed above as well as much more:
You'll want to pay special attention to IT-221, Determination of an Individual's Residence Status. As well, you may want to check out Form NR73, Determination of Residency Status (Leaving Canada) to test yourself against their list. I should note, however, that you are NOT REQUIRED to fill out an NR73 before you leave Canada and may not want to do so unless you are asked to submit one (as recommended by my tax consultant).
And my last piece of advise, talk to a reputatable tax consultant before leaving. His/her advise could save you a lot of stress come tax time.
Hi TravelGirl,
I've researched this at length and spoken to a tax consultant, so I can offer you a few tips. As Canuk noted, you actually don't need to file anything prior to leaving; you can simply leave and cease filing tax returns. If you choose to do so, you need to be absolutely certain that you will not be assessed as a resident or you could be on the hook for back taxes, penalties, etc.
That being said, it's important to understand HOW the Canada Revenue Agency (CRA) determines residency. They will assess residency based upon your actions as well as your intent. First are primary residential ties:
(a) dwelling place (or places),
(b) spouse or common-law partner, and
(c) dependants.
Having even ONE of these three will ALMOST ALWAYS indicate residency (by showing intent to return).
They will also look at secondary residential ties. This can include, but is not limited to:
a) personal property in Canada (such as furniture, clothing, automobiles and recreational vehicles),
(b) social ties with Canada (such as memberships in Canadian recreational and religious organizations),
(c) economic ties with Canada (such as employment with a Canadian employer and active involvement in a Canadian business, and Canadian bank accounts, retirement savings plans, credit cards, and securities accounts),
(d) landed immigrant status or appropriate work permits in Canada,
(e) hospitalization and medical insurance coverage from a province or territory of Canada,
(f) a driver's license from a province or territory of Canada,
(g) a vehicle registered in a province or territory of Canada,
(h) a seasonal dwelling place in Canada or a leased dwelling place.
(i) a Canadian passport, and
(j) memberships in Canadian unions or professional organizations.
Having one of those ties will not necessarily keep you as a resident (e.g. not feasible to dispose of Canadian passport), but if you meet a few of them, your case for ceasing residency is weakened.
Last but not least, other factors such as keeping magazine subscriptions or a safety deposit box can also work against you. In addition, you'll want to be careful about how many times you return to Canada, even for visits, as they may consider that to be indicative of a tie to the country.
The following link contains the information listed above as well as much more:
http://www.cra-arc.gc.ca/tax/nonresidents/individuals/leaving-e.html#b
You'll want to pay special attention to IT-221, Determination of an Individual's Residence Status. As well, you may want to check out Form NR73, Determination of Residency Status (Leaving Canada) to test yourself against their list. I should note, however, that you are NOT REQUIRED to fill out an NR73 before you leave Canada and may not want to do so unless you are asked to submit one (as recommended by my tax consultant).
And my last piece of advise, talk to a reputatable tax consultant before leaving. His/her advise could save you a lot of stress come tax time.
Hope this helps!!!
Stacey