1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature.
Just follow those clauses to figure out where you are tax resident. It wouldn't hurt to have a tax lawyer help you figure out where you would fall in your case.2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:
- a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests);
- b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;
- c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national;
- d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
The term permanent home isn't defined in the treaty.
I'm not sure what your point is. That doesn't define what a permanent home is.a) he shall be deemed to be a resident of the State in which he has a permanent home available to him.
I'm not sure what your point is
Yeah.. this is what I was asking. In the case you stay 5.5 months in Canada in Airbnbs, and 6.5 months (with a yearly contract), and no other primary ties in Canada.. what would happen..I just spoke to a Canadian tax lawyer about this topic yesterday
The wording of the treaty is important - although many contain the standard OECD stuff.
If you meet the local domestic criteria for residency in both countries then it goes to the tiebreaker rule in Article 4, which trumps domestic law.
The key is to HAVE a permanent home available in the other country and to NOT have one in Canada.
Hotels are not considered a PHA but if you were to stay in the same one for the whole time CRA might fight you on that. Airbnbs should be similar.
These standards are a bit annoying bc they aren't well-defined
Avoid signing any leases or rental agreements.
Avoid having a storage locker in Canada.
The lawyer told me staying in a hotel for 1 month would NOT be considered a PHA.
So if you can stay mobile for 5.5 months it should work. It should not even get to the centre of vital interests test.
According to him, as long as you stay less than 6months and stay in accommodations that are not regarded as PHAs, like hotels the whole time, you would remain non-res of Canada and only be taxable on Canadian-source income, and not on your world-wide income for the whole year.Yeah.. this is what I was asking. In the case you stay 5.5 months in Canada in Airbnbs, and 6.5 months (with a yearly contract), and no other primary ties in Canada.. what would happen..
Yes that is correct, make sure to document everything very well..According to him, as long as you stay less than 6months and stay in accommodations that are not regarded as PHAs, like hotels the whole time, you would remain non-res of Canada and only be taxable on Canadian-source income, and not on your world-wide income for the whole year.
But there may be anti-avoidance (GAAR) clauses and the above may be nullified by these if CRA thinks you are just setting yourself up to avoid taxes. The whole issue is complex and evolving - I believe there were some proposed changes in Freeland's latest budget.
So obviously, get an independent legal opinion based on your own circumstances before making any decisions.