Sent: Monday, April 25, 2005 7:50 PM
To: taxman at centa.com
Subject: Canadian English teacher in Korea
Hi. I'm a single Canadian guy living in Korea,
teaching English. I don't own a home in Canada but a
friend is holding a car for me that I'm still paying
off, and I have a bank account there (I'm still paying
loans). Can you tell me if it is worthwhile to apply
for non-residence status, and if so, how to do that?
I think I must do so soon, if at all.
Thank you for any help you can provide.
______________________________________________________________________
david ingram replies:
Article IV of the Canada Korea Income Tax Convention (Treaty) is the
governing factor.
With a car and bank account in Canada, you could be a resident of both Korea
and Canada but you are saved by Art IV(2)(a) which states that if you do
not have a residence available for your occupancy in Canada you will only
pay tax to Korea on your world income (assuming you have a home, apartment
or other residence in Korea).
Fiscal Domicile
1. For the purposes of this Convention, the term "resident of a Contracting
State" means any person who, under the law of that State, is liable to
taxation therein by reason of his domicile, residence, place of head or main
office, place of management or any criterion of a similar nature.
2. Where by reason of the provisions of paragraph 1 an individual is a
resident of both Contracting States, then this case shall be determined in
accordance with the following rules:
(a) he shall be deemed to be a resident of the Contracting State in which he
has a permanent home available to him. If he has a permanent home available
to him in both Contracting States, he shall be deemed to be a resident of
the Contracting State with which his personal and economic relations are
closest (hereinafter referred to as his "centre of vital interests");
(b) if the Contracting State in which he has his centre of vital interests
cannot be determined, or if he has not a permanent home available to him in
either Contracting State, he shall be deemed to be a resident of the
Contracting State in which he has an habitual abode;
(c) if he has an habitual abode in both Contracting States or in neither of
them, he shall be deemed to be a resident of the Contracting State of which
he is a national;
(d) if he is a national of both Contracting States or of neither of them,
the competent authorities of the Contracting States shall settle the
question by mutual agreement.
3. Where by reason of the provisions of paragraph 1 a company is a resident
of both Contracting States, then it shall be deemed to be a resident of the
Contracting State of which it is a national.
===============
Make sure you filed your final Canadian return showing your date of
departure. This means that if you left in 2003, your 2003 return should
have had pro-rated exemptions and the date of departure should have showed
on page one of a T-1 General.
If you left in 2004, the same thing should show.
We would be glad to help you with the departure returns.
david ingram
==========================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321
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