I am trying to help the CRA determine my tax residency status. I came to Japan in late 2018 but I’m finally getting around to it now, I am a non-JET ALT through a small, local dispatch company. I am filling out the form [NR-73: Determination of Residency Status](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/nr73.html). On the second page, under the “Residency Status” section, the first question asks:
>Are you, under a tax treaty with another country, considered resident in the other country and not resident in Canada?
I am aware that there is a [tax treaty](https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/japan-convention-consolidated-1986-1999.html) and I’ve read [the guide](https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-1-residency/income-tax-folio-s5-f1-c1-determining-individual-s-residence-status.html#p1.40) for this form but I’m still confused. Should I answer ‘yes’ to this question? What are the criteria for being considered a resident in Japan (for tax purposes) and does being one automatically mean one is “not resident in Canada” (the last part of the question)? I even called the CRA and their subject mater expert said “the Japanese government would be the authority to rule on that, not us”, or something to that effect.
The following question asks:
>Are you subject to income tax in that country on your world income? (total income from inside and outside Canada)
Again, I’m not sure. I mean I know I’m subject to income tax on my Japanese income, but nobody’s ever asked me anything here about whether or not I have any *Canadian* income. So… how do I know?
Thanking you in advance for any help at all.
P.S. FWIW I was on JET from 2015 to 2017 but I believe that is not pertinent to the case at hand, since everything was effectively “reset” when I returned to Canada in 2017 and came back here again in 2018.
4 comments
I believe you are a permanent tax resident of Japan (since you live in Japan more than 5 year out of last 10 year). You are subject to Japan income tax on worldwide income.
You may also want to ask in r/japanfinance
I recently dealt with a tax accountant in Canada who specializes in this. If you live and pay taxes in Japan then for all intents and purposes you are a tax resident of Japan. If you have major ties to Canada like a wife and kids living there or a house there that could be a different situation but if not, assume you are no longer a tax resident of Canada in any way, shape, or form.
I have some investments in Canada and spent some time figuring out how this tax treaty worked.
Edit: you would answer “yes” to those questions.
Edit 2: our accountant sent the CRA a letter indicating we are tax residents of Japan and all tax correspondence from this point out will be done with the Japanese government. We declare our investment income on our Japanese tax returns and pay taxes that way. Before he did that the CRA was hounding us to do our Canadian taxes, as the bank sends a copy of the T3 each year so they knew we had investment income not claimed. Once he did, the CRA stopped bothering us.
You live and work in Japan? At a passing glance, you should definitely assume you reside here, both casually and for tax purposes. That’s a good starting point.
Hi, fellow Canadian here.
You should have notified the CRA of the date that you left Canada. I think you could do this through the CRA website. Have you checked whether you need to declare deemed dispositions?
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html
For what reason are you submitting the NR73 form? You are no longer a tax resident of Canada and the form is only to ask for the CRA’s opinion on your resident status.
Feel free to DM me if you have other questions