[QUOTE=JonboyE;6976078]

Hi!
This question is addressed to JonboyE & Judy.
We (Myself + Spouse & NO KIDS) have received our PR Visa (valid till Aug'09)and COPR forms and we are still 'NOT LANDED IMMIGRANTS' and we are not very clear w.r.t canadian tax system.

I would appreciate receiving your valuable comments and advice for the questions listed below but before that a brief @ us...

We are presently in UAE and both are employed, we do plan to buy a house (NOT IN CANADA AS YET) and are planning to just enter canada to complete the PR formalities and return back to UAE (I understand that to keep the PR valid we need to be physically present in canada for a total of 750+ days in 5 years period)

1. Can we only land in Canada, so that the PR cards could be processed and sent to our local canadian address. Upon receipt of the PR cards we intend to move back to UAE. Is it mandatory to immediately apply for the SIN and Health Insurance? we do not intend applying for the SIN / Bank Ac / Credit cards / DL nor rent or buy a property in Canada soon after landing since we plan to move out for another 1 or 2 years before making the final come back.

2. Are we liable to file any tax returns for the period we are out of canada (consider the initial 2 years after the first entry & exit, possibly we might enter canada each year for holidays in these 2 yrs. with each stay of a max. of 1 month and acco with friends / hotel). I assume that we will be considered as non-resident since we do not have any primay or secondary residential ties with canada with the expection of the PR cards and i am not sure whether only a PR card can be considered as having residential ties.

3. What and how should things be declared at the time of landing (leave aside - goods accompanying / goods to follow & minimum settlement funds etc.) We currently own a house and we intend purchasing another one which will be of higher value but we are not sure ... shud we first buy the house and declare its value when we land or just declare the cash amount and after returning back we can complete the purchase... the reason being if we get into a sales agreement and if there remains a part payment to be done than it can be considered as a liability on us at the time of landing and if we opt for the 2nd option, we can only declare the cash and later make the purchase with all the possibility that the house value will be more than the cash amount declared at the time of landing... what implications will it have for future capital gains tax and tax filings.

4. If we land in ON and get our PR cards done, is it possible to move to another province and complete the SIN / Health insurance etc as and when we land a job ... say in AB or SK etc.

5. If we use our 2nd property for rental income wherein canada has a tax treaty on dual taxation ... Plus salary thru employment in UAE, since UAE currently does not have a income tax system so there might not be any tax treay between canada & UAE. How will this effect us in the near future.

6. If we settle down in canada and want to sell off the 2nd property which was not declared at the time of entry, will it be possible to transfer funds to canada without taxes / capital gains tax or atleast not on the cash value declared at the time of landing.

I know, I am asking for a lot of information with hypothetical situations and I would be really greatful for all the advice / suggestions so as to clear our doubts.

Thanking you guys and everyone else in advance.

Regards,
Sam

Yes, this is OK. Many people do this.

You can apply for a SIN, but you don't have to yet. You cannot apply for health insurance because you are not resident in a province (and it is a very bad idea for your tax status as well). It is also OK, but not necessary, to open a bank account as long as the account is not used for your day to day banking activities. You should not buy or rent a property that could be considered a home for yourselves.

Yes, if you do the above you will not yet be resident in Canada for tax purposes so you will not need to file a general tax return in Canada. You will only need to file a non-resident tax return if you have any Canadian source income.

That is all you need to declare on landing.

As long as you are not tax resident in Canada this is of no concern to the Canadian government. When you do become tax resident, which is usually on the day you move here to live, you need to value all of your overseas assets in Canadian dollars at the exchange rate on that day. You don't need to make a declaration yet, but you do need to keep a rercord of their values. Formal valuations are ideal but if not available try and get as much third party evidence as possible e.g. an estate agents suggested selling price.

When you file your first Canadian general tax return (which will be by the end of April of the year after you move here) you have to declare foreign assets worth more than $100,000 and all foreign income from the day you became tax resident.

I don't think there will be any problem doing this.

Once you are tax resident in Canada you pay Canadian taxes on all your income. It doesn't matter where in the world the income is earned. IF you pay any foreign taxes you can offset most of them against the Canadian tax due on the same income. This is Canadian tax law and it is not affected by whether or not a tax treaty is in place.

There is no tax benefit in earning a tax free salary in the UAE to earning a similar taxed salary in Canada. If you have the choice you might want to consider the pros and cons of paying Emploment Insurance and Canada Pension Plan premiums.

Transfering funds is no problem - there is no tax on cash. However you will have a capital gain or loss on the sale of your second property. This is the difference between the net sale proceeds (selling price less estate agents commission less lawyers fees and so on) and the value at the time you became tax resident in Canada. This is why you needed the valuation we discussed above.

Half the capital gain is added to you income and taxed in Canada. If you have a capital loss then half the loss can be offset against past, present or future taxable capital gains - but not any other income.

[QUOTE=JonboyE;6985626]

Thanks a lot Jonboy for all your time and efforts ... its really appreciated... not to forget your advice / suggestions.

I still have a few doubts and would like you to kindly clarify ...
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Yes, if you do the above you will not yet be resident in Canada for tax purposes so you will not need to file a general tax return in Canada. You will only need to file a non-resident tax return if you have any Canadian source income.

** You mean to say that, if we do not have any canadian source of income while we are non-residents, than we are not required to file any tax returns.

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That is all you need to declare on landing.

As long as you are not tax resident in Canada this is of no concern to the Canadian government. When you do become tax resident, which is usually on the day you move here to live, you need to value all of your overseas assets in Canadian dollars at the exchange rate on that day. You don't need to make a declaration yet, but you do need to keep a rercord of their values. Formal valuations are ideal but if not available try and get as much third party evidence as possible e.g. an estate agents suggested selling price.

When you file your first Canadian general tax return (which will be by the end of April of the year after you move here) you have to declare foreign assets worth more than $100,000 and all foreign income from the day you became tax resident.

** I guess, upon landing the immigration & CRA will treat us as tax residents of canada and i read at some other place that we need to declare & get the documents stamped at the time of landing - the cash equivalent in CAD a/v in foreign bank a/c which we may or may not transfer in the future and property values in CAD so that at the time of transfer of funds, capital gains / loss will be applicable (currency exchange gain / capital gains on property sale). As mentioned by you that the above can be declared only when we become tax residents in canada / usually from the day we move to live in canada. Do we need to inform CRA & Immigration in advance or when we move out of Canada upon doing the PR card formalities. How will CRA treat our absence from canada for the first 2 years after landing.

Thanks in advance & sorry for the trouble.

Warm regards,
Sam

Your interpretation is right. If you are non-resident for tax purposes, and have no Canadian source income, then you do not need to file a tax return.

__________________________________________________ _______________
When you land you need to declare:

a) any goods you have with you
b) any goods you now own that you will later bring into Canada. There are plenty of threads about the goods to follow list if you do a search. It is this list that gets stamped when you land.
c) the amount of liquid funds you have available (not necessarily with you - a bank statement is fine).

These decalrations are for customs and immigration purposes - not for income tax.

Landing, by itself, does not make you tax resident in Canada. That happens when you establish residential ties here which usually means when you move here to live. There is more information in the wiki. Although the wiki says that you usually become tax resident in Canada when you land as a PR this will not apply in your circumstances. If you arrive in Canada, "land" for PR purposes, have a vacation, and then return to your usual home in the UAE, then you will not become tax resident here.

If, say, in 2010 you move from the UAE and set up a home in Canada you will be tax resident here from the day the 'plane touches the tarmac. This is the day you should have a valuation of all your non-Canadian assets in CAD converted at the rate then current. Your liability for taxable capital gains starts at this point.

If you move here in 2010 you will have to complete a 2010 general tax return and file this by April 30, 2011. The tax return will ask you the date you became resident in Canada and you put down the date you moved here (because "resident" for immigration purposes is not the same as "resident" for tax purposes). The tax return also asks you if you have foreign assets worth more than CAD 100,000. If so, you have to complete a form T1135 and file this with your tax return. This is the extent of the declarations you need to make to the CRA unless you have any taxable income or loss from the foreign assets.

You will not be tax resident in Canada so the CRA have no interest in you. However, I have described a simple situation here. If you plan to move to Canada in stages (for example, buying a home or establishing a business before you move over) then it is best to carefully examine your situation with some professional help.