Residency Determinations

Determination of residency is fundamental to the tax obligations of a person in Canada. It is also one of the most convoluted ones. There is no definition of residency in the Income Tax Act (the "ITA"). It must be determined for each individual situation taking into consideration all the circumstances and intentions of the individual, corporation or other entity.

Residency Determines Your Canadian Tax Obligations

Tax residency determines Canadian tax obligations of individuals and corporations: tax residents of Canada are subject to tax on their worldwide income and tax non-residents of Canada are only subject to tax on income tied to Canadian sources – see Tax and Tax Planning. Status as resident or non-resident of Canada will also determine tax liabilities when Buying or Selling Real Estate.

Tax Residency Is Different From The Immigration Status Of An Individual

An individual can be a resident of Canada for income tax purposes even if they are not a Canadian citizen or a landed immigrant. And a person who is a Canadian citizen may not be a Canadian resident for income tax purposes. The determination involves applying residential criteria developed by the courts, certain deeming ITA sections and the tie-breaker rules in the applicable tax treaties. You can find additional information on our blog.

An individual can be:

  • Ordinarily (factual) Resident (common law);
  • Deemed Resident (ITA); or
  • Resident by international tax treaty (Treaty).

A corporation can be a resident or non-resident depending on:

  • Where it was incorporated,
  • Where its "mind and management" resides and makes decisions, and
  • If there is a tax treaty and how it applies in the circumstances.

Granville Law Group lawyers can assist with determination of your residency and advise you on the steps to take to establish that you are either a resident or a non-resident for tax purposes in Canada as your particular situation may require.

Call Us If You Need To Determine Personal Or Corporate Residency

Contact Granville Law Group and find out how our legal team can assist you with your tax planning or any disputes with CRA. Call 604-757-9385 or arrange a free 30-minute consultation using our online form.