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AIT805 Residency Rules - each taxation year of every person...

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Residency and Liability for Tax Tax Liability Individual Corporation Resident Liability for tax on Facts indicate the Facts indicate central worldwide income. individual is tied to or management and connected with control is in Canada. Canada. Deemed Resident Liability for tax on The individual Incorporated in worldwide income. sojourns in Canda Canada after April 26, an aggregate 183 1965. days or more (24 hours). Non-Resident Liable for tax on No residential ties to Incorporated abroad Canadian-source Canada. and central manage- Income. ment and control exist outside Canada. Part-Year Resident Liable for tax on Becomes a resident worldwide income or relinquishes resi- while resident. dence during the year. Source: Taxation in Canada, 2007-2008 Edition, Table 2-3, pages 54-55. IT-221R3 Determination of an Individual’s Residency ITA 2(1) As required by the ITA, income tax shall be paid on the taxable income for
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Unformatted text preview: each taxation year of every person resident in Canada at any time in the year. • Taxable Income is defined in Section 2 of the ITA; it is a technical phrase with a limited and special meaning. The phrase taxable income is defined in ITA 248(1). • T he word income is not defined in the ITA. • Taxation year is defined in ITA 249(1). • Resident is not fully defined in the ITA. • Canadian taxation is based on the concept of residency and not Citizenship. • Canadian residents are taxed on his or her worldwide income. The taxable income of a Canadian resident is subject to Canadian tax regardless of the country in which the income is earned or generated. Read pages 46-55 of Taxation in Canada , 2007-2008 Edition....
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