Qatar Information: Business, Taxation and Offhsore

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Topic: Qatar

Non Resident or Resident for tax purpose

Hi,

My spouse, 2 kids (one was born in Canada) are all Canadian citizens and are all living with me in Qatar as residents. Qatar does not have a tax treaty with Canada. I hold a working visa in Qatar. My employment contract is indefinite and I intend to reside in Qatar until I retire. We may go back to Canada after I retire. My children, being Canadian Citizens, may go back to Canada to take their university degree, and live in Canada later on. When they go back there, my spouse and I will not go back with them. All of us including my son who was born in Canada have dual citizenship (Canadian and another Asian country). I have another son (a naturalized Canadian citizen) who was 18.5 years old when we left him alone in Canada, who is renting his own place and studies in the university. He did not want to come with us in Qatar. He wanted to stay in Canada. He is financially independent because he was able to obtain loans and grants from the government. I have a wealthy old maid aunt who provides him financial assistance if he needs it. We already sold our house before my spouse left Canada. We do not have any other social and economic ties with Canada except for our CPP and EI contributions, Retirement Pension and term life insurance. We informed Service Canada for our CPP and EI, our financial institution on our Retirement pension and insurance companies that we would leave Canada and would return after many years (say after 10 to 15 years). Before my family and I landed as immigrant in Canada, we resided in Qatar for around 5 years. I would appreciate if you can answer my following questions:

1) For income tax purpose, are we (my spouse and myself) considered as Non-resident in Canada for income tax purpose and therefore not obliged to file our income tax returns and pay our worldwide income including our employment income here in Qatar? Is my son considered a dependant considering our case? If we are still Residents of Canada for Income Tax purpose, what are the reasons? What else should we do to become Non-resident of Canada for Income Tax purpose?

2) If both of us are Non-residents, when did these take effect considering the section on Date Non-Resident Status Acquired below? Also, please take note of the relevant dates:

Before residing in Qatar - citizens and residents of a country in Asia.

Before landing in Canada - residents in Qatar for 5 years

Jan 2007 - landed in Canada as permanent residents

Jan. 2010 - applied for Canadian Citizenship

May 2010- Husband left Canada and resided in Qatar to work. Spouse and all other children stayed in Canada awaiting for Citizenship exam and oath taking.

August 2010 - sold house in Canada

July 2011 – All family members obtained their Canadian Citizenship.

August 2011- Severed all economic ties with Canada. Spouse and 2 other children left Canada and joined husband in Qatar. My son, 18.5 yrs old, did not want to reside in Qatar and stayed in Canada to take his university degree. He is financially independent and we have not financially supported him since we left him in Canada. He visits us in Qatar 3 times a year. We do not indetend to visit him in Canada except in emergency cases.

Date Non-Resident Status Acquired
The date on which a Canadian resident leaving Canada becomes a non-resident for tax purposes is generally the latest of the dates on which
a. he or she leaves Canada,
b. his or her spouse and/or dependents leave Canada (if applicable), or
c. he or she becomes a resident of the country to which he is immigrating.
An exception to this will occur where the individual was resident in another country prior to entering Canada and he or she is leaving to re-establish his or her residence in that country. In this case, the individual will generally become a non-resident on the date he or she leaves Canada; even if, for example, his or her spouse remains temporarily behind in Canada to dispose of their dwelling place in Canada.

3) If we did not submit the N73 and did not inform CRA that we left Canada, are we going to face problems with CRA when we come back later on after 10 years or so?

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