didik

Hi all
I hope some of you will be able to share some relevant information. Here are the background information.

*me and wife landed in 2011 and stayed only for a week. Before leaving Canada, I called its revenue office which advised me that i didnt need to file tax return as i was only 'holidaying' in canada.

*me, wife and daughter have returned to vancouver in December 2012; wife and daughter will stay longterm in Vancouver, while I will be heading back in a few days to Australia for work. They are renting at this moment in Vancouver. Also, wife has found a part time work (5 hours a day), daughter has enrolled in elementary school. I will be financially supporting (i.e. sending monies) my wife and daughter.

*(not knowing the implications) I have acquired Canadian driving license, open two credit cards and two checking accounts. (I was told that this will add my 'ties' to Canada). BTW, i have a house in Australia, and will be living there when I returned to Australia, and work full time in Australia with my another daughter.

questions:
*From reading previous posts i think I dont need to fill out a tax income for 2012 (as i only returned to Canada on December 24 2012, and will be returning to Australia in 20 February 2013) . Is this correct?

*I plan to comeback at the end of June 2013 and stay until February 2014. Do i need to fill out the Canadian tax in Jan 2014 although i will be paying tax to Australian gov?

*Can i work fulltime in Australia, but pay the income tax to Canada? For a single income of gross AUD86,000 annually, if i can choose, what is the better option?


Sorry for my ignorance and thanks for reading.

ddk

PMM

1. You don't have to file income taxes in Canada as you are not residence in Canada for tax purposes and didn't earn any income in Canada.
2. Your spouse will probably be applying for the Child Tax Credit, and she will have to declare her income and your worldwide income to determine how much she will receive.
3. She won't have to file her income tax until 2014 to report income earned in 2013. Again for the CTCC she will have to declare you income. (Its not taxable, but the level of payment is based on the parents income)
4. If you return in June/13 you will become a tax residence (probably) and will have to declare your world wide income, although you will receive credit for the tax paid in Australia.
5. You better keep track of your absences as you may have difficulty in meeting the Residency requirements of 2 years in every 5.

fcbayern

I'm not sure about your point 1.

You are a non-resident for tax purposes if you:
normally, customarily, or routinely live in another country and are not considered a resident of Canada; or
do not have significant residential ties in Canada; and
you live outside Canada throughout the tax year; or
you stay in Canada for less than 183 days in the tax year

Here comes the catch
Residential ties include:
a home in Canada;
a spouse or common-law partner or dependants who stayed in Canada;
personal property in Canada, such as a car or furniture; and
social ties in Canada.

As your wife and kids will be in Canada you are therefore probably considered a resident.

You will have to declare your worldwide income and will be able to subtract income tax amount you have paid already in Australia.

We will kind of be in a similar situation and I have read a lot about it. My partner is a seafarer working offshore Brazil and will continue to do so when we live in Canada. This is quite sour for seafarers as they do not have to pay income tax in UK or Netherlands and Canada does tax them even though they spend less than 6 months out of a year in the country. For you even more so as you have do not live in Canada at all.

JonboyE

It is a bit more complex than your situation as your OH has only one permanent home, and that is in Canada.

If, for the first half of 2013 the OP stays at a work camp or hotel, then he will probably be resident in Canada for tax purposes. As he has a house in Australia, he may have two permanent homes: one in Canada where his wife and family live, and one in Australia where he returns to after work and to sleep. In this case, under the tax treaty rules, he will be tax-resident in the country where his personal and economic relations are closest.

Whether or not his personal relations to Canada (wife and family) are stronger than hs economic relations to Australia (income and other offspring) is a question of fact that will be decided by the CRA. There are sufficient contrary precedents to suggest that it is a toss up.

In the OPs position I would be prepared to be considered tax-resident in Canada. The tax rates between the two countries are not wildly different so it is not as though there is a massive saving. The OP should file a 2012/2013 tax return in Australia and keep this to prove the Australian tax paid. The CRA will want to see it before granting a foreign tax credit.

JonboyE

My thoughts ...

Agreed.


I suggest your wife files a 2012 tax return showing worldwide income from the day in December she arrived to 12/31/2012. This will get her into the system and make it easier to apply for various programs and benefits.

It probably would have been better not to apply for the license and credit cards but it is done now. The house and another daughter (your dependent?) in OZ are more significant.

If you will claim to be non-resident until June then yes.


You will spend more than 183 nights in Canada in 2013 so if you do not file as a tax-resident for part of the year you will be a deemed resident for all of the year. If you are a deemed resident in 2013 your Australian earnings from Feb to June will be subject to Canadian tax (though you shoudl get a foreign tax credit). If you file as a factual resident from July 2013 you are only taxed in Canada on your worldwide earnings from July to December.

You don't get to choose. If you work full-time in Australia you will have payroll tax deducted in Australia. Then it needs to be determined whether you are resident in OZ or Canada for tax purposes. If this is Australia then Canada has no interest on your Australian earnings. If it is Canada then you will need to file a Canadian tax return including your gross Australian earnings. You work out the tax you owe in Canada and can generally deduct the tax that you had to pay in Australia.

didik

I want to thank three of you for your replies and comments. I find that they are very useful when me and wife file our tax.

One thing i forgot to write is that: we jointly have two mortgages (i.e. two houses) in Australia. One is an investment property, another one is my (used to be 'ours') residence.

Will this make any different at all in my tax status?

Cheers
ddk