Q.764 OCI - Determine

residency status for Canadian Tax

purposes

Question: Dear Mr Chand, Self is an Canadian citizen having OCI and living in India. I got my Canada passport in august 2014. and my OCI in Nov 2014. I lived in canada from May 2009 to Jan 2014. I was employed. I have filed taxes in canada in 2010; 2011; 2012 and 2013. I have no canada income for 2014. I own a condo (flat) which is occupied by my son. He is a student in college. My wife and daughter live in india. My wife is Indian passport holder while myself; son and daughter are canada citizens. I am paying mortgage for the condo; maintenance for the condo and supporting my sons education and living expenses. My tax status in India is NRI as my job is a seafarer employed with various shipping companies. I have been sailing on merchant ships and maintaining NRI status since 1988. I have been filing my taxes as NRI in india continously till FY 2013~14. My status is peculiar as I am non resident for canada and non-resident for india. My questions 1 . Is my status in canada for 2014 that of deemed non- resident? My CA there advised me not to file returns for 2014 as I have no income and I have been out of canada for 183 days. Is this correct? 2 . What is my status in india for FY 2014~15? I have income in India - rental; Mutual funds. Salary in non- taxable as I earn in USD which goes to my NRI account. 3 . Do I have to inform IT in india that my status has changed from NRI to foreign citizen? How is that done? Appreciate you detailed reply to my questions and any advise would be welcome. Thanks Ajoy Answer: As residents of Canada are taxed on their worldwide income, having non resident status in Canada does help. Non-residents are taxed only on their income from Canadian sources. While stay in Canada for less than 183 days in the tax year is one consideration taken into account to show non resident status, kindly note that the amount of time spent in Canada is not the only factor considered to determine if a person is a resident or non-resident of Canada for tax purposes. A person even if being away from Canada for more than 183 days may be classified as a resident for tax purposes if the tax authorities determine a failure to completely sever ties with Canada. Things such as having a Canadian state (provincial) health card, Canadian bank accounts, property, spouse or dependent children living in Canada may be reason enough to show that the person continues to maintain close ties with Canada and is not a non-resident as far as tax rules are concerned. Here is a link to the Canadian tax authorities website with information on determining a persons residential status for tax purposes: http://www.cra- arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html Since you have a CA looking after your interests you should seek clarifications from him/her of any doubts that you have.