Liability for Tax - slides

Liability for Tax - slides - Liability for Tax Tran Chung...

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Liability for Tax Tran Chung Liability for Tax For Resident Subsection 2(1) – An income tax shall be paid, as required by this Act , on the taxable income for each taxation year of every person resident in Canada at any time in the year. Subsection 2(1) is known as “charging” provision. Person resident in Canada at any time in a taxation year is generally liable for tax on worldwide income . © 2010 Tran Chung 1
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What determines residency of individuals? There is no smoking gun, rather one has to determine on a case by case basis after taking into consideration all of the relevant facts. Primary criteria: Maintaining a dwelling, whether owned or leased, suitable for year-round occupancy and available for occupancy, would establish an important residential tie. A spouse or common-law partner and other members of the immediate family remaining in Canada when an individual leaves would be regarded by the CRA as an important residential tie. Secondary criteria: Maintaining personal property and social ties in Canada would indicate a “continuing state of relationship through secondary residential ties. Personal property might include furniture, clothing, cars and recreational vehicles. © 2010 Tran Chung 2
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Other secondary residential ties include social ties, Canadian medical and insurance coverage, Canadian accounts, credit cards, etc… Deemed Residents (overrides common law determination above) Section 250 of the Act contains a series of deemed residence provisions – “throughout a taxation year” Paragraph 250(1)(a)
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