Escape
from Canada Customs & Revenue Agency
If you want to escape the bite of the Canada Customs & Revenue Agency (CCRA), you must sever ties with Canada. But the specifics of what you have to give up can vary widely.
"Depending on the circumstances, you may be able to continue to own a house in Canada, keep your provincial driver's license, or even have your kids in school in Canada," says Elizabeth Peck, president of Canadians Resident Abroad Inc., an Oakville, Ont., firm that publishes a newsletter for current and prospective Canadian expatriates. "It all depends on your individual situation."
The first step is establishing an address abroad. Until you do that, CCRA will consider you to be a resident here and you will be liable for Canadian taxes.
You must give up your provincial health coverage. To offset this loss, you will need coverage from your employer and possibly extra coverage as well. This is not as horrifyingly expensive as most Canadians believe. A healthy middle-aged adult can usually find acceptable coverage for $1,500 to $3,000 a year.
Finally, you must take your spouse with you. While your kids may be able to stay in a Canadian school, a spouse who remains here gets you labelled a Canadian resident.
Expert advice can be crucial since the law is murky on the question of who is and isn't a Canadian resident for tax purposes. For instance, if you want to maintain a home in Canada, CCRA insists that it cannot be available for your immediate occupancy. That is open to interpretation. Peck recommends to her clients that they play it safe by leasing their house for at least a year to someone who isn't a member of their family, with an option to terminate the lease upon three months' notice.
You can structure a deal that makes it easier to move back into your house, but you should be aware that CCRA can review the situation and decide that it means you're a Canadian resident after all. An unfavorable ruling could mean that you owe Canadian income tax on all your foreign earnings.
The simplest and safest route to non-resident status is to sever all your ties. Most long-term ex-pats find it easier to get rid of all goods, bank accounts and so on.
"Maintaining things from a distance is a pain in the butt," says Dr. Neil Forsberg, a Canadian who has lived in Malaysia, Japan and the Middle East."Sooner or later, you will be asked to do something that you just can't do from the other side of the world."