JonboyE

You have found a crack in the system. Service Canada will not issue you with a SIN because you are not entitled to work or receive government benefits. CRA will not issue you with an ITN because you are a resident.

I can't tell you what to do because there is no official policy to cover your situation that I am aware of. It is all too new. However, now that you have been determined to be residents by the CRA you will have to deal with your tax situation.

My suggestion is that you file paper tax return(s) for 2013 and leave the SIN blank. Attach a letter to the return (with a copy of the letter sent by the CRA when you applied for an ITN) explaining that you could not get an ITN and Service Canada will not issue a SIN. It puts the ball back in the CRA's court.

dave_j

Thanks for that, we've a collection of phone numbers now and I'll endeavour to get an answer. I have to say that since the supervisa had been well underway before we applied, the issue of revenue collection is one that the Canadian authorities should visit and shake up because it doesn't appear to be working very well.

Steve_

Well you seem to have figured it out as far as the residency goes, really it's based on your intent and the CRA always wants you to be resident if they can possibly do it because they get more money.

As far as the SIN situation goes, legally you don't need a SIN or an ITN. You file without one. SIN is issued to people for payroll tax withholding and the ITN for non-residents. You're neither. They may not like it but those are the regulations as they stand.

I'd go one further than Jon suggested and include a copy of the NR74 determination, if only so they can look you up in their system.

I'd also double-check with HMRC that they've got you down as non-resident, the usual thing to do is to file a P85 (although may not be relevant if you're no longer working) and also an R105 with any financial institutions you deal with in the UK, so they stop withholding income tax.

Also, file a formal complaint with the CRA: Service Complaints

They do actually take note of complaints, one thing that used to irk me when I called them was they often didn't identify themselves and one time a "specialist agent" told me something that was totally wrong and caused me a real headache to resolve, so I complained and the guy I spoke to at the Connaught Building said it was required for agents to give their ID numbers and he would make sure it didn't happen again. So ever since then, every time I've phoned the agent has given me their ID number. I was quite impressed.

Obviously they need to change the regs so ITNs can be issued to people in Canada on the Super Visa.

dave_j

Many thanks Steve,
I'll certainly file a complaint. Like you, I have also been given completely wrong advice from government agents. In my case I chose to ignore it and it would have cost both time and money.
I understand how this issue has arisen, but am dumbfounded that it hasn't been resolved before now. The supervisa had been in operation for some time before we arrived so many others must have found themselves in our position. Either they chose to ignore the tax issue or ran into the CRA/CIC mess and gave up.
If my daughter and her family didn't live here I'd certainly pack up and pay my taxes elsewhere. The level of ignorance demonstrated by so many government agencies is very frustrating.
Dave J

dave_j

A little progress today.
I revisited the CRA helpline. This time I had a little more information to give them viz-a-viz the refusals for SINs and ITNs and CRA statement of residency.
Once again the agent was confused by the situation but in this case made the effort to go away and find out what could be done.
JonBoyE was correct in his assumption that filing a blank tax return would very likely solve the problem because today I learned for the first time of the existence of something called a Temporary Tax Number or TTN. I gather that this can be issued as a catch-all where all else fails. A TTN would be issued where no tax number exists.
However, my confidence in the system has been severely dented and the spectre of double taxation looms large. For this reason, before I file anything, I'll write to them and request TTNs and see where that gets me. I can't believe that a TTN would be allowed to become a permanant fixture and I expect CRA will demand that I file before a TTN can be issued which doesn't help me because I need a number, any number, to alert HMRC to the situation.
CRA seem a little relaxed about this for my liking. For the second time I was told by CRA that I could continue filing within the UK for at least the 4 years that I put up as an example of how long I might stay here. I can't believe that the feds wouldn't be knocking at my door demanding a pound of flesh if I accepted this advice.
Nevertheless, it does beg the question, what are all the supervisa holders who preceded me doing? And there will have been many thousands of them!
Fingers crossed.......

Steve_

I'm not even sure they tell you what a TTN is, I think it's just an internal thing they use for people who file without a number.

JAJ

Double taxation? Are you telling us that you are still tax resident in the United Kingdom? If that's the case, then have you considered the tie-breaker provisions of the Canada/U.K. tax treaty that apply when someone might otherwise be considered resident in both countries? (one of the final tests is which country are you a citizen of ... )

Remember - the government is not accountable for advice given to you over the phone. As for the other supervisa holders, perhaps many of them retain a foreign tax residence and take advantage of tax treaty provisions to continue to be resident there and not in Canada.

In general. Being tax resident of Canada, and liable to Canadian tax on worldwide income, is not necessarily such a good deal if at the same time you are effectively on visitor status in Canada. With no entitlement to Canadian citizenship/PR status or benefits.

Steve_

But he's got no choice, he clearly is a factual resident of Canada for several years and he's even filed an NR74 to get a ruling. Tax treaty provisions are part of that ruling so it would be difficult for HMRC to not respect it, all you've really got to do is tell HMRC you're not resident.

When he leaves he just has to tell CRA and HMRC and possibly file an NR73.

But if you end up in court and can quote the agent ID and they agree they gave false information, that can be taken into account by the judge.

dave_j

Many thanks for the advice. It's clear that the water is still muddy but clearing slowly.
I'm sure that simply telling HMRC that I'm not resident won't work otherwise half the residents in the UK would be doing just that and paying no tax. HMRC will only accept the fact if they can be sure that the claim is true and this is accomplished by HMRC receiving a 'Canada-Individual' form bearing a CRA stamp. The catch 22 issue is that this needs to be certified by CRA and a tax reference needs to be included on the form but I've yet to identify a method that CRA can use to issue one. Until that happens I'll continue to pay tax on income sourced from the UK. Filing for tax in Canada could add an additional tax burden (double taxation) that I'd prefer to avoid.
I anticipate applying to extend the supervisa and regularising my tax affairs will remove potential issues down the line.
I appreciate that advice given by telephone needs to be treated as 'let the listener beware'. Nobody knows everything, and switchboard advisers will know just enough to answer the most common queries, anything else and they'll simply muddle through. However, every now and again the listener might extract something useful. It's all down to experience and in many ways that's what this forum provides, so keep the advice coming please.
Letter to CRA will be in the post next week, we'll see what they come up with.

Steve_

The typical way of doing it is to file an HMRC P85, what you're on about is having the CRA tell them you're a taxpayer in Canada on your behalf, a P85 tells them you're not a taxpayer in the UK. Frankly the way you did it is a new one by me, I'd check with HMRC that they've actually got you down as non-resident. Clearly you are non-resident so it's not as if there's going to an argument about it, it just saves you a paper chase in the future.

The actual determination is made under Article 4 of the tax treaty using a variety of tests. NR74 essentially gives the CRA the information to make that determination.

dave_j

I think that the way we approached this issue has been too defensive. The supervisa assigned us the status of visitor for two years and from the outset there existed the possibility that we might return to the UK and may never achieve tax resident status. For this reason we waited until we tax resident before doing anything.
I have looked at the P85 form and, in retrospect, it appears that it would have been better to have submitted one earlier but we felt that our tax status needed to be confirmed and this wasn't done until October. We were steered towards the Canada-Indivdual form by HMRC but I see that the P85 apparently performs the same task for us and perhaps I didn't explain our status clearly enough to HMRC. We have informed HMRC of our status over the telephone but will now submit P85s to formalise the arrangement.
We are learning... but very slowly.

dave_j

It's coming back to me now. The reason why I was steered to the Canada-individual form was that I had completed a self-assessment form in 2013 and P85 states that it should not be used in this instance.
Complicated stuff this tax business.

dave_j

Latest update:
Have received a reply from CRA.
Letter was sent to CRA requesting a temporary tax number. Included visitor record, refusal of T1261, assessment of NR74, refusal for SIN and covering letter explaining the situation.
CRA returned all documents together with another pro forma reply used previously when refusing T1261 application (I now have two) even though no application for T1261 had been sent.
I wouldn't mind so much but no effort has been made by CRA to explain their refusals or advice as to how I should proceed.
I am now proceeding to plan X, ie to file on paper without a number and see what CRA do with it. It will be interesting to see whether they refuse the filing even though they assess that I should file.
I think another glass of wine is called for.

4d32ftw

hmm, interesting. I think my parents will need o go through the same process as we havent even considered taxes for them.

only reason I thought about it was that on the sale of a house the goverment will withhold up to 25% of the sales funds for non residents. and I was puzzled if they counted as residents or not. obv reading the website they meet the criteria to count as residents for tax purposes.

Jerseygirl

I've shown this thread to Mr JG...the following are his comments...

Very interesting thread. I am a Supervisa temporary resident (at least I think I am a temporary resident and not a visitor). As such I am increasingly perplexed by the ambiguity and confusion regarding tax filing implications.

I am retired and have no “earned income”, i.e. employment income. My sources of income are from pensions and investments from non-Canadian sources, i.e. stock dividends, interest and capital gains.

I recently phoned the CRA to clarify my tax filing status. This follows a call with a top-tier tax accounting company that had opined that my tax filing status is complex and would require extensive and costly effort to determine. I have no complex investments so this was a surprise.

When I made contact with the CRA I was referred to 3 different sources, none of which had any knowledge of the Supervisa or its implications for tax purposes. I was told by one agent that I was not required to file, another said maybe, another acknowledged there is a lot of ambiguity, however, confirmed that immigration status has no impact on Tax status and suggested I read NR 74 to determine residency status.

NR74 confirms I am a resident for tax purposes, however, I cannot file without a SIN or ITN. I have submitted T1261 to request an ITN. I asked CRA what I should do in the event that ITN is not provided to me by the tax filing deadline and was told to file tax return and T1261 together.

My tax accountant has informed me that I cannot file without the ITN.

I concur with many on this thread that the Supervisa seems to be very poorly understood and coordinated by the CRA and Canada Border Services. As an example I have recently returned from the US and was unsure how to complete the Canada customs declaration form i.e. am I a visitor or a temporary resident?