Canadian non-resident, must have a tax base? Perpetual Traveler/Flag Theory.

[andrew28fl]

Hello,

I am a Canadian who has been a non-resident of Canada since last 4 years, living in Tbilisi Georgia. No ties to Canada whatsoever, other than the passport. I manage all my affairs through US Single Member LLCs, using the pass through entities. So basically things come down to my personal tax residency.

I have a need where I need to split time between countries - mainly between Georgia, UAE and India. This is for business, investment and weather reasons. My question is, what happens if I spend about 3-4 months in each of these countries, along with some international travel to other countries, where basically I haven't spent enough time to be a tax resident in any country. From my Google searches, it seems that Canada is not very clear whether if I don't have a tax residency anywhere, I become a tax resident of Canada. But maybe I am not looking in the right place.

Does anyone from any country have experience not being a tax resident anywhere and hove you had any taxation issues? Any Canadians who can share their experience would be amazing. TIA!

Andrew

 

[troubled soul]

Why do not you try like this
UAE: Six month
India: Three month
Georgia: Three month

As this setup, You are resident of Tax free country (UAE).
It is better to setup legal tax resident to avoid future headache.
If you are from any country.
Getting UAE residential visa is easy job.



Hope this helps.

 

[andrew28fl]

Why do not you try like this
UAE: Six month
India: Three month
Georgia: Three month

As this setup, You are resident of Tax free country (UAE).
It is better to setup legal tax resident to avoid future headache.
If you are from any country.
Getting UAE residential visa is easy job.



Hope this helps.

Thanks for your answer. I have been leaning towards the setup you suggested, but also want to know that what if I don't become a UAE resident at all. Maybe some years, I might not be able to spend the 183 days in UAE for tax residency. What would be amazing is that if someone can confirm that Canada doesn't care even if I don't establish tax residency anywhere else, as long as I don't have Canadian ties (which I don't) I would be not liable for taxes in Canada even if I live a Perpetual Traveler lifestyle.

 

[avalanche]

Thanks for your answer. I have been leaning towards the setup you suggested, but also want to know that what if I don't become a UAE resident at all. Maybe some years, I might not be able to spend the 183 days in UAE for tax residency. What would be amazing is that if someone can confirm that Canada doesn't care even if I don't establish tax residency anywhere else, as long as I don't have Canadian ties (which I don't) I would be not liable for taxes in Canada even if I live a Perpetual Traveler lifestyle.

Would you rather live on a hearsay following some gossip that Canada doesn't care? What if they start caring in a couple of months, would you be able to react fast enough?

 

[botero]

I would recommend getting residency in a country with a double-tax treaty with Canada and establishing some ties. Ideally this would be a country with zero/low taxes or lax taxation. Currently there isn't much precedent in how perpetual travelers are taxed, but it's better to be on the safe side.

With zero tax countries like Dubai, it's ideal to get residency and live there for 6 months and get the tax residency certificate. You should also establish basic ties like a cell number, driver's license, bank account, etc.

With countries with lax taxation like Mexico, you can simply get the residency and establish basic ties. From what I have read, Canada and other high-tax countries aren't as suspicious if you have residency in a fellow high-tax or OECD country.

If the CRA ever decides to open a case, you can tell them that you have established ties in another country. If it's a DTT country, they will be less suspicious. The more primary and secondary ties you have to your country of residence, the better your odds of not being deemed a resident of Canada for tax purposes.

With the CRA, even if you don't have primary ties to Canada (e.g. permanent home, dependents), they still look at your secondary ties to determine if you're a resident (e.g. bank accounts, driver's license, passport). I believe if you have more secondary ties in your country of residence, then the CRA doesn't have much of a case.

Let's just hope taxation by citizenship doesn't become a thing.

 

[troubled soul]

Thanks for your answer. I have been leaning towards the setup you suggested, but also want to know that what if I don't become a UAE resident at all. Maybe some years, I might not be able to spend the 183 days in UAE for tax residency. What would be amazing is that if someone can confirm that Canada doesn't care even if I don't establish tax residency anywhere else, as long as I don't have Canadian ties (which I don't) I would be not liable for taxes in Canada even if I live a Perpetual Traveler lifestyle.

Dear, In 2021, It is better to Have some sort of Legal Tax residency whether Canada care or not , Otherwise you are inviting trouble for yourself.

Thanks

 

[neogene]

Does anyone have a clear idea as to how tax residency can be maintained after living in 180-183 days? It's hard to find how to maintain that requirement after tax residency certificate is received. I don't mind being in Dubai, but I would like the option of using some the money I would've owed if I was a Canadian resident and use that to travel, but I donno how often I can do that. This isn't just how long I have to stay in Dubai but also whether I need to permanently have a Dubai address (ex. if I know I'd be in Dubai for 6 months, I would find a place to rent for 6 months rather than signing for a whole year or choose to rent a car rather than buying on, etc).

The bare minimum requirement I'd need is a Dubai bank account, a stock broker that is associated with Dubai bank account and proof of tax residency. I'd most likely use freelance visa for the time being. If I make enough money, I may consider just purchasing a modest apartment but we'll see if it's worth it or not tbc.

 

[Konstanz]

Does anyone have a clear idea as to how tax residency can be maintained after living in 180-183 days? It's hard to find how to maintain that requirement after tax residency certificate is received. I don't mind being in Dubai, but I would like the option of using some the money I would've owed if I was a Canadian resident and use that to travel, but I donno how often I can do that. This isn't just how long I have to stay in Dubai but also whether I need to permanently have a Dubai address (ex. if I know I'd be in Dubai for 6 months, I would find a place to rent for 6 months rather than signing for a whole year or choose to rent a car rather than buying on, etc).

The bare minimum requirement I'd need is a Dubai bank account, a stock broker that is associated with Dubai bank account and proof of tax residency. I'd most likely use freelance visa for the time being. If I make enough money, I may consider just purchasing a modest apartment but we'll see if it's worth it or not tbc.

In your case Dubai is a good idea to get tax resdence certificate. In theory there is requirement to spend 180 days. However, if you can show other strong ties to Dubai, you might get certificate. For example, owning apartment in Dubai , spending most time in Dubai, kids going to school in Dubai, club memberships etc etc. Provide that you don't have any real estate elsewere. It all depends case by case.
Of course, there are countries were you don't need to stay 180 days to get tax residence certificate. For example, Andorra in the heart of Europe Or some exotic islands like Vanuatu

More and more people face situations (request by banks, authorities etc) to provide tax residence certificate. Especially this is the case were are you resident in such country like UAE!
There are even OAEC recommendations that UAE is one of the high risk countries in terms of fake residencies, so banks and other institutions will require these certificates more often. Here is link:

Residence/Citizenship by investment - Organisation for Economic Co-operation and Development

www.oecd.org

 

[neogene]

In your case Dubai is a good idea to get tax resdence certificate. In theory there is requirement to spend 180 days. However, if you can show other strong ties to Dubai, you might get certificate. For example, owning apartment in Dubai , spending most time in Dubai, kids going to school in Dubai, club memberships etc etc. Provide that you don't have any real estate elsewere. It all depends case by case.
Of course, there are countries were you don't need to stay 180 days to get tax residence certificate. For example, Andorra in the heart of Europe Or some exotic islands like Vanuatu

More and more people face situations (request by banks, authorities etc) to provide tax residence certificate. Especially this is the case were are you resident in such country like UAE!
There are even OAEC recommendations that UAE is one of the high risk countries in terms of fake residencies, so banks and other institutions will require these certificates more often. Here is link:

Residence/Citizenship by investment - Organisation for Economic Co-operation and Development

www.oecd.org

I'll consider them more in the future but due to my criminal record, getting visa anywhere else (even tax havens) seems too risky for me at least until my criminal record is suspended (which unfortunately will take 10 years) so Dubai atm is my only feasible choice so far (I'd be happy to be corrected wrong however and will consult offshore CPA later on). Dubai freelance permit -> residential visa seems like the only feasible way for someone with criminal record to smoothly transition here without requiring criminal record check (certificate of good standing seems like like it targets financial health and good relationship with the local bank, which I am more confident on as I have no issues there).

I've heard some alarm bells about how people with freelance permit and residency visa can struggle to get a bank account that potentially deals with high volume of cash flow so I'd have to try to look closer to that deal. Most of my capital will be held by third party stock broker (ex. Tastytrade, Interactive Broker, etc... all legit company big enough to not raise any red flag) but I will be withdrawing some money here and there for my expenses and personal salary and I'm a tad worried about it not going smoothly. I'd potentially withdraw low 6 figure per year, so maybe I'd need a commercial bank account but we'll see. Concept of tax haven is easy but the devil's in the details or the saying goes :/