Question

Jason has an opportunity with his current employer to work overseas for five years. If he takes this option, Jason would move overseas, while his family would stay in Canada. In this case, Jason would visit his family often, returning to Canada for his six weeks of vacation and as many holidays as possible. Jason is unsure how working overseas will impact his residency in Canada for tax purposes. Explain the difference between deemed resident, ordinarily resident, and non-resident for an individual for tax purposes in Canada. In addition, Jason knows that an individual can be considered either a full-time or part-time resident, but he doesn't know the difference between the two. Explain the difference between full-time and part-time residents to Jason. (Full answer please and thanks you)

Answer 1

Ordinary Resident as per tax purpose- Significant Redsidential Ties in Canada

Meaning of Significant Residential Ties:-

In order to have significant residential ties client must have One:-

1. dwelling place (or places)

2. spouse and / or children living with the client in India

3. Both of PR status and Provincial Health Coverage:-

6 of the following :-

• personal property in Canada (such as furniture, clothing, automobiles, and recreational vehicles);
• social ties with Canada (such as memberships in Canadian recreational or religious organizations);
• 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);
• landed immigrant status or appropriate work permits in Canada;
• hospitalization and medical insurance coverage from a province or territory of Canada;
• a driver's license from a province or territory of Canada;
• a vehicle registered in a province or territory of Canada;
• a seasonal dwelling place in Canada or a leased dwelling place referred to in ¶1.12;
• a Canadian passport; and
• memberships in Canadian unions or professional organizations

  

Deemed Resident- Physically present for 183 days or more

Does not establish residential ties

There is no tax treaty with their home country

Taxed on world Income for the entire year

  Non Resident - Spends Less than 183 days

Does not establish significant ties

Jason, is wrong in his thinking. There is no concept of Full time or Part time resident.The residency is classified as either Resident, Deemed Resident or Non Resident

In the Present case,

1. Jason is residing in Canada but has an opportunity to work overseas for five years, In this case his family would stay in canada and he would come and meet them for 6 weeks.

2. As his Family is Residing in Canada he would be considered a Ordinary Resident.

3. His Income would be taxed in Canada as he is a Ordinary Resident.

4. He would escape Double taxation if Canada is having a tax treaty with the other country in which Jason is going to work.

Thanking You- Hoping that all your queries are resolved.