Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether Canadian citizens who are not resident in Canada are subject to income tax in Canada.
Position: Possibly.
Reasons: Question of fact.
XXXXXXXXXX 2012-043831
Robert Demeter
(613) 948-5274
June 19, 2012
Dear XXXXXXXXXX:
Re: Taxation of Canadian citizens living outside of Canada
This is in reply to your letter of February 19, 2012, in which you refer to certain requirements imposed by the Internal Revenue Service (“IRS”) that are affecting citizens of the United States (“U.S.”) living abroad, including U.S. citizens living in Canada. In particular, you have asked whether Canadian tax authorities subject Canadian citizens that reside outside of Canada to income tax in Canada.
Our Comments
As you have noted in your letter, and as recognized in subparagraph 2(a) of Article XXIX of the Canada-U.S. Tax Convention, the U.S. government reserves the right to tax its citizens regardless of where they may be resident. Under the Canadian tax system, liability for income tax is determined on the basis of an individual’s residency rather than citizenship. For example, an individual who is resident in Canada during a taxation year is subject to Canadian income tax on income from all worldwide sources. However, an individual who is not resident in Canada will generally be subject to Canadian income tax only on income received from sources in Canada.
For further information in this regard, please refer to our Interpretation Bulletin IT-221R3, Determination of an Individual’s Residence Status.
We trust that our comments will be of assistance.
Yours truly,
Robert Demeter
Section Manager
for Director
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2012
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2012
Email this Content