# Digital Nomad Living in Thailand for 5 Years Given Five Figure Notice of Assessment



## travelguy (Nov 11, 2016)

Hi, thought I would seek some advice here about tax issues with the CRA.

I’m in the unfortunate situation (and true Digital Nomad’s worst nightmare) where the Canadian tax man (i.e. the CRA) has decided to come calling. And calling hard. I was given a notice of assessment back in September (I didn’t even know of this until just yesterday as these were being sent to my mom’s house and I haven’t been in Canada) by the CRA doing a review / assessment from 2011, 2012,2013, and 2014. Stating I owe a tax debt of 56,000 CAD which includes late fees, penalties, and interest.

Here’s the deal:

I’m a digital nomad living in Thailand who has NOT lived in canada since the middle of 2011, and in that time, only been back to canada three times for a brief visit (with a total visit period between all 5.5 years of less than 90 days!). I’ve been residing in Thailand the whole time. I have proof of this with passport stamps and whatnot.

I make a completely online income (affiliates, adsense, Amazon and such) of which all of it DOES not derive from Canada. I don’t have canadian employees or generate any revenue from within Canada — it’s all passive income from online sources from American companies. Again, I have been entirely out of Canada for almost six years now.

I have NO primary ties to Canada — I don’t own a house, a car, or land. I do not have kids or a wife. I have a few basic secondary ties, due to the nature of being a digital nomad. I incorporated a couple abandoned BC companies back in 2009, but I've only had the business bank accounts. Most with no money in them (except for one which I have used to receive payments from online sources). I should have closed these down years ago and I have not maintained them or filed anything on the companies. My bad there.

Here's my 'ties' to canada

Primary Ties

- none (no house, no property, no kids, no wife, no car)

Secondary Ties


a personal bank account
a credit card
a DL
passport


I do not have

TSA
RRSP
Care Card
fixed address or post office (I use my mom’s address for any mail).


I’ve only used Canada basically as my bank account, from which I would send money I earned while abroad to live while outside of Canada, which was the entire period of time. Basically, it's where I could get my 'salary' as it were sent to from my online business.


So for all purposes, I’ve completely been a NON RESISTANT. I only have used my canadian bank account to receive funds earned outside of canada (not generated from within Cada) since it’s very difficult to impossible to do proper banking as a foreigner here in South East asia as digital nomad. Again with money that was not generated in canada.

Anyways, the taxman back in Canada doesn’t know this (that I’m a non resident) as I never filed any departure statement or intent to leave or any of that. 

Any advice here. This falls into one of those gray zones here I'm sure. I've been outside of the country for all but about 90 days over the whole 5.5 year period. And I can prove (I even have my passport with stamps) I've been outside of the country this whole time. Yes, I've been using a Canadian bank to receive my online payments to live on, but no, that money was not 'canadian money', earned in canada, sourced from canada. That's been my only tie to 'canada' (yes, I do owe a student loan as well from many years ago too).


So I’m going to call the CRA in a few days to see what can be done about this. I thought I would seek some advice here first. But what do you guys recommend here?


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## indexxx (Oct 31, 2011)

Hmm- did you ever declare non-residency? I think you need to do that once your two-year period has passed, otherwise they have no way of knowing what you were up to, at least that's what my accountant told me at the time, and he spent a period as a non-resident also. A passport is not a residency tie, probably not a credit card either, but a DL likely would be considered so. Bank account could go either way, or at least it could when I was a legal non-resident. I only kept a bank account because I had a debt in Canada that I was paying off from abroad, and I also thought that if I ever came back, I would still have that account as a starting point. The regulations may have changed- this was from 2002-2008. I would talk to a knowledgeable accountant versed in this area for advice before I talk to the CRA. My accountants have been great about helping me with this type of thing.


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## Eclectic12 (Oct 20, 2010)

From CRA's page on "Determining your residency status" ...
http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html

Then under "Your residency status if you normally, customarily, or routinely live in another country"
http://www.cra-arc.gc.ca/E/pbg/tf/nr73/README.html

It seems that where you wanted to make sure you were a Canadian NR, it sounds like a NR73 should have been filed in 2011. 

I have not wanted to change my status so I am not sure about the two year period that indexxx talks about.


Out of curiosity ... did you check with a qualified expert before leaving as to what was needed and any steps to take before leaving, based on where you wanted to live?


Cheers


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## indexxx (Oct 31, 2011)

Eclectic12 said:


> From CRA's page on "Determining your residency status" ...
> http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html
> 
> Then under "Your residency status if you normally, customarily, or routinely live in another country"
> ...


What it 'used' to be (not sure anymore) is that you were allowed to apply for non-residency after two years continual absence if you also met the criteria. You could visit briefly of course, but if you had any sign of residency during that two-year period you could still be deemed a resident and therefore subject to tax. I'm pretty sure I had to prove legal residency in another country- local DL, bank accounts, job, bills with local address, etc. They don't like or understand the whole nomad thing. (although I definitely do!)


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## travelguy (Nov 11, 2016)

Eclectic12 said:


> From CRA's page on "Determining your residency status" ...
> 
> It seems that where you wanted to make sure you were a Canadian NR, it sounds like a NR73 should have been filed in 2011.
> 
> ...


No, when I left (I was 29 at the time) a simply packed up and left for Thailand. At this time, I was only planning on staying for six months. The only situation is that I never ended going back. So I didn't 'prepare' via official statements and forms. I understand you don't really need to declare a 'non residency' by filling out forms, though in retrospect, it seems advisable as it would officially, at least to some paper pusher, mark your 'exit' date or something to fall buy. I never did file the NR73. Again, my understanding is this is just a notice, but it's not something that officially determines your residency -- such are considered based on your primary and secondary ties.

I have looked at determining your residency page many times and according to that, I would be deemed a non resident. It's tricky because in Thailand, it's hard to become an official resident as a foreigner, but I've been here, living in an apartment as such. According to thai law, you are a 'resident' if you stay more than 183 days of the year, though doing so on Tourist visas (there's not much in the way of getting proper perm residency or such in Thailand, even if you 'live here' 350 days out of the year'. However, their tax laws and residency laws not exactly precise in thailand. It's not like moving to the US with all that paperwork.

This area for me is difficult area because

a) I've only used Canada as a means to a means to deal with my banking. Banking in places like Thailand is hard for foreigners

b) my job is 'global' in the sense that I can be anywhere in the world. The main point here is that the revenue does not source from Canada at all. At this point, having a bank account in canada seems to be a bad idea, even if you are a 'non-resident' though as my understanding goes, having a bank account as a secondary tie is allowable. 


I do have a student loan and using a Canadian credit card while travelling is one of the only ways to book tickets, etc. I need the personal bank account to make payments on the student loan, and whatnot. However, at this point, I want to move everything outside to Estonia and incorporate there as well as creating one in Thailand and have absolutely no banking in Canada to avoid any future problems.

c) I'm living in Thailand, a third world developing country which doesn't have all the bureaucratic paper pushing of the western countries and where laws of residency, taxation, and how it applies to foreigners is not clear. Regardless, I have been living here non stop and 'working' (if you can call building websites and marketing) online while living here. Again, not dealing with Canadian items, canadian people, goods, or anything like that. So for all purposes, the income that has been going into my 'bank account' in canada has all been derived outside of Canada.


I don't want to call the CRA and deal with this till I have a clear understanding here of how to best make my case -- a case of non-residency which is true in that:

a) I have only been in canada (staying with my mom and not even renting a place) for about 90-120 days over 5.5 years, and those days were spread out over the years with 1 month between 2011 to 2013, 1 month in 2014 a year later, and 2 months in 2016, nearly 2 years after the last visit.

b) I own no property, I own no car. For a full year even I had no driver's license when it expired. I have no BC Care card, I have no RRSP's or tax savings accounts, no kids, no wife, and I use my mom's address for any mail.

I'm sure when CRA were doing an assessment such as it was, they simply saw some guy who was not paying taxes for 4 years (the recent two years were not included - 2015 and 2016, likely because I've had no money going into the personal account from the end of 2013) due to a little bit of money going into the personal account, if they checked that. At this point, I need to formally notify the CRA that no, for those 4 years they want me to pay 56,000, I was never a resident. If anything, only the year I left (2011) -- a partial year -- was the year that yes, I owe taxes for. But half the 2011 year, 2012, 2013, 2014, (and 2015 & 16), I've been a non resident.

Another problem is that I'm still in Thailand and I did not know about any of these assessments, demands, and late fine penalties on this 'amount' levied against me, because I've been in Thailand and this stuff goes to my mom's infrequent address. And she's been living in spain part of the time!

So yea, spinning here with trying to figure out how to properly sort this out.


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## indexxx (Oct 31, 2011)

travelguy said:


> No, when I left (I was 29 at the time) a simply packed up and left for Thailand. At this time, I was only planning on staying for six months. The only situation is that I never ended going back. So I didn't 'prepare' via official statements and forms. I understand you don't really need to declare a 'non residency' by filling out forms, though in retrospect, it seems advisable as it would officially, at least to some paper pusher, mark your 'exit' date or something to fall buy. I never did file the NR73. Again, my understanding is this is just a notice, but it's not something that officially determines your residency -- such are considered based on your primary and secondary ties.
> 
> I have looked at determining your residency page many times and according to that, I would be deemed a non resident. It's tricky because in Thailand, it's hard to become an official resident as a foreigner, but I've been here, living in an apartment as such. According to thai law, you are a 'resident' if you stay more than 183 days of the year, though doing so on Tourist visas (there's not much in the way of getting proper perm residency or such in Thailand, even if you 'live here' 350 days out of the year'. However, their tax laws and residency laws not exactly precise in thailand. It's not like moving to the US with all that paperwork.
> 
> ...


Again, find a good accountant with knowledge of Canadian tax law- we can only give you nuggets. I will say that unfortunately, the CRA may not care if you did not prepare via official forms- ignorance of the law is no excuse etc. They could try to make the case that the onus is on you to find out what you needed to do if you want to pull off something like that. (Great job by the way- sounds like a cool life!) The fact that the money is not earned in Canada does not matter- if you are deemed a resident, it can be earned anywhere in the world. If you were living in Canada but making your money online in other countries, you'd have to pay tax- same thing if your are still deemed a resident.

I'm not saying at all that this is what will happen, just that you might need to make a case for your non-residency at this point. From their perspective, you're a guy on a long vacation making money on the road, but still a resident because there is nothing official telling them otherwise. I did need to mark my exit date, and claimed non-residency two years to the day after that date. 

Work is work, no matter if you're on an official company salary, or are self-employed, hence why if you were doing that here you'd still pay tax on it. Living in an apartment might help- is it a lease or rental agreement from a legal landlord?

The income being derived outside of Canada is irrelevant from their perspective. If I had an online business based in Vancouver, exclusively drop-shipping items to Europe through third-party suppliers on Ebay, I'm still legally bound to pay Canadian tax. If I move to Hawaii for a year while still doing business and then come back, I still pay the tax for that year because I am still legally a resident even though I am not physically in the country and my business is online.

Is your business registered in Thailand or anywhere else? Business license, address, ISP bills, local web hosting fees? Advertising fees, office rental and supplies, written contracts with legitimate local businesses... Have you been paying Thai taxes? (VERY big deal- unless you are in a tax-free country with a tax agreement between itself and Canada, you should have been paying Thailand taxes all along as a Thai resident.) Are there receipts and a paper trail for all the above? These are all things that might be looked at and could be in your favour if the answer to some of the more important ones is yes.

Your accountant may see a few ways to satisfy the CRA- I can't stress enough that you need someone over here on your side. If you want to PM me, I can get in touch with my accountant here in Vancouver and see if he would take on your situation (I'm guessing you'd have to set up payment beforehand or something with him somehow.) He's a great accountant and a great guy; no idea if he would take on a 'long distance' client thing but maybe for a small fee he could at least give you straight advice and a few options over email or a couple calls.


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## ian (Jun 18, 2016)

If you get no relief from CRA my strong advice is that you engage a tax professional who has specific knowledge and experience in this area. 

We looked at leaving the country a few years ago to avoid tax liabilities from the exercise of stock options. We met and discussed this with our accountant and did a fair amount of on line research. We decided to remain in Canada. 

What did we learn? This is not as simple and straightforward as one would imagine. There are so many nuances that even the professional tax people who specialize in this area are wary of the grey areas. Get advice from people who truly have expertise in this area....not hearsay.


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## travelguy (Nov 11, 2016)

Yea, I'm in the middle of some big projects here in Thailand.

This is really causing some serious problems. Worst case, I may need to fly back to Canada and hire a tax lawyer / tax accountant and try to make a case. I have not yet called the CRA as I'm just trying to figure out a plan of attack here.


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## peterk (May 16, 2010)

Are you "legal" in Thailand? Doing the border runs, visas, etc? Do you have any official Thai identity? driver's license? Bank accounts?

Do you have and use a Canadian passport still?

From everything I've read you sound like a non-resident of Canada to me. As you say, you can have some secondary ties and remain non-resident. Main things are property ownership, spouse/dependents.

What is the CRA assessment based on? What have they described as your income to get to the $56,000 figure? Obviously you haven't been filing returns for 5 years...


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## travelguy (Nov 11, 2016)

peterk said:


> Are you "legal" in Thailand? Doing the border runs, visas, etc? Do you have any official Thai identity? driver's license? Bank accounts?
> 
> Do you have and use a Canadian passport still?
> 
> ...


Yes, I have a Canadian Passport. It's not possible to get a Thailand passport or become a citizen. There may be 30 million tourists to Thailand every year but about 10 citizenships a year are given out to foreigners. So no way there.

I do have another passport / citizenship (Belize). I got that because I lived there for 10 years as a kid with my parents (my dad moved down for a job from Canada). However, since i haven't been living in Belize, nor travelled there in a decade, it's not like that's going to prove any non-residency ties.

I have my passport with visa stamps. I also did an education visa for several years (so a year long visa each time) which is NOT a tourist visa. I do have a Thai bank account (I finally made the push and got one), and I will be getting a Thai credit card as well in a few months. I can apply and get a Thai drivers license, though I don't have one right now (I can try for one)

So yes, I use my Canadian passport to travel, when I need to, outside of Thailand. 

Yea, the last time I filed a 'return' was in 2010. So it's been over 6 years. Property, spouse, dependents -- I have none of that in Canada. 

I don't know where they got that figure from. It seems they assigned an income report for each year (based on the papers I've seen) of about 42,000-50,000 CAD a year. The thing is, I've been using my canadian bank account for my salary, as it were. Since banking was not possible for me staying in Thailand (it is, but you need to form a company, get a work permit, etc -- most nomads just come down, live here, do visa runs every 3 months and stay in the country). 

I do have a couple bank accounts:

personal account
business account a
business account b

I incorporated 2 businesses back in 2009 for my online stuff. However, after 2011, I just abandoned them, but I still have the bank accounts associated. Since I never renewed or filed the corporations, they were probably defunct, though the bank accounts remain. I've only used one of those as a hub for online funds to come into (while being in Thailand). Again, business accounts for funds that don't come from Canada from sources not in Canada.

I don't think they were looking at the business accounts, since they are not in my 'name'. Maybe my personal account. Since they came up with that figure, they had to have looked at my personal account (since I didn't file taxes). That's the only way way they could assess the funds. And they taxed me for 2014, which as far as I'm aware, I did not put any funds into my personal account that entire year. So I'm not sure where they are even getting that figure from.


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## indexxx (Oct 31, 2011)

Again- were you paying income tax in Thailand? I'n not trying to be the negative guy here, but the reality is that if you did not file for non-residency, and were earning self-employed income while abroad but not paying any income tax to either country, you might have some 'splainin to do. They may look at it like you were trying to live abroad and earn income under the table without paying taxes anywhere. It's one thing to pick up odd jobs while you backpack for a year, quite another to set oneself up in a foreign country for a long stretch and run a company. As I mentioned a couple of posts back, unless you are in a tax-free jurisdiction that has an agreement with the Canadian government, and have also satisfied the non-resident application, you'll need someone on your side to give you very specific advice. You may not want to hear all this, but you asked. 

You will likely have to prove the sources and amounts of all your income and tax paid for whatever period they want to audit you for if it comes to them doing that. Call a Canadian accountant, explain your situation, pay them for their advice. It may help you get a plan together to avoid worst-case scenarios.


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## Eclectic12 (Oct 20, 2010)

travelguy said:


> No, when I left (I was 29 at the time) a simply packed up and left for Thailand. At this time, I was only planning on staying for six months. The only situation is that I never ended going back. So I didn't 'prepare' via official statements and forms.
> 
> I understand you don't really need to declare a 'non residency' by filling out forms, though in retrospect, it seems advisable as it would officially, at least to some paper pusher, mark your 'exit' date or something to fall buy. I never did file the NR73. Again, my understanding is this is just a notice, but*it's not something that officially determines your residency* - such are considered based on your primary and secondary ties.


Isn't that semantics or hair splitting?

The NR74 is asking CRA to *go through* the ties to tell you what your residency is. 

If there's a two year delay as indexxx indicates, likely CRA would tell you that. It also tells CRA that you want to be a NR without a lot of hoopla AFAICT.


Compared with trying to prove after the fact one's residency where some misunderstanding may mean one *is* a Canadian deemed tax resident that owes a pile of back taxes/penalties instead of the date one thinks - is not being proactive the better route than hoping one has it right?


Then there are the actions that may reduce one's tax bill in the new country of residence. As an example, those moving to the US are advised to sell their RRSP investments then rebuy them. The *cost* of the RRSP is tax free so where one did not bother to sell/re-buy one can owe the US gov't a lot more taxes than someone who prepared for the move will owe.




travelguy said:


> ... I have looked at determining your residency page many times and according to that, I would be deemed a non resident.


While hind sight is 20/20 .... what is your time worth sorting this out when one could have done the paperwork to avoid having an issue to sort out?

Maybe it's hearing all the problems my relatives have had plus my own issue but I much prefer being proactive. A CRA clerk made a data entry error where *I* had to file adjustments for something like five tax returns to fix their error.




travelguy said:


> ... b) my job is 'global' in the sense that I can be anywhere in the world. The main point here is that the revenue does not source from Canada at all ...


So?? 

Canada taxes based on world wide income so the key question that has to be established is your tax residency as far as Canada is concerned.

Similarly I was paid by the Canadian firm while working in the US for the US firm - I still had to file a US tax return, in addition to my Canadian one. The source of my pay did not matter, in terms of what tax returns I had to file.

Sources of income may not matter depending on the tax regimes at play.




travelguy said:


> ... at this point, I want to move everything outside to Estonia and incorporate there as well as creating one in Thailand and have absolutely no banking in Canada to avoid any future problems.


Question is .... do you have the right info to avoid running into new or repeating your existing tax issues?

AFAICT, once you've proved to Canada you are NR - the Estonia as well as the Thailand setup may not be needed from a Canadian tax perspective. There may be other advantages but as I say, my main concern is that there seems to be partial and possibly bad information that you are working from.




travelguy said:


> ... c) I'm living in Thailand, ... not dealing with Canadian items, canadian people, goods, or anything like that. So for all purposes, the income that has been going into my 'bank account' in canada has all been derived outside of Canada.


Say CRA agrees you are a Canadian NR ... did you have any assets that you should have paid the departure tax on?

http://www.theglobeandmail.com/glob...the-departure-tax-when-going/article22032765/


Being a NR helps for the world wide income but it also has requirements for when one leaves Canada.





travelguy said:


> ... I don't want to call the CRA and deal with this till I have a clear understanding here of how to best make my case -- a case of non-residency ...


Unless you can work quickly - delaying can be expensive ... likely CRA has assessed penalties/interest that is growing each day. The earlier you object that you are a NR the better from my experience.




travelguy said:


> ... I'm sure when CRA were doing an assessment such as it was, they simply saw some guy who was not paying taxes for 4 years ...


Taking the risk of beating a dead horse- letting CRA know as soon as you figured out you were staying longer than six months would have made this a lot easier.

If Indexxx's comment about needing to be gone two years before NR comes into force, there may be a tax bill that may not be avoidable.




travelguy said:


> ... Another problem is that I'm still in Thailand and I did not know about any of these assessments, demands, and late fine penalties on this 'amount' levied against me, because I've been in Thailand and this stuff goes to my mom's infrequent address. And she's been living in spain part of the time!


Which is another reason to tell CRA ... the longer they think you are simply not paying them, the harsher the penalties are. Some or all of which may be reversed eventually when the real date of being a NR is determined.

I think CRA has an email service now so there may be a better way to stay on top of what they are sending you. If not, you likely will have an easier time if you can figure out some way to get the info CRA is sending on a more timely basis.


[I don't know if it's because of how much reading I do or what but I am surprised at the number of people posting here who are moving on to be NR but seem to have done little to investigate or prepare for it.]


Cheers


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## kcowan (Jul 1, 2010)

Eclectic12 said:


> I think CRA has an email service now so there may be a better way to stay on top of what they are sending you. If not, you likely will have an easier time if you can figure out some way to get the info CRA is sending on a more timely basis.


It is possible to get notices on MyAccount. But in my experience, they post the NOA but not the detail documents that back it up. Getting the NOA is an advantage because then OP needs to call Mom to get the details. Because it is clear to all of us that at least 2 years of taxes are due regardless of OPs current status, it would be wise to pay 2 years of taxes and then file a Notice of Objection on the basis of a bona fide but tardy claim of NR status. Otherwise the penalties and interest will just keep building on that first 2 years regardless.

(OP might find that paying the total amount CRA wants is cheaper than hiring an accountant. I had a similar situation with unpaid GST on a business account because I was tardy filing. We agreed to switch to annual filing and I got current and they did not levy the fines and interest. CRA removed them.)


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## ian (Jun 18, 2016)

You have two issues. The first is clearing up you past tax liability, whatever that turns out to be. The second issue is one of moving forward. Essentially how do you eliminate exposure to CAD taxation in the future. No use fighting the current battle if it does not result in a clear flight path forward. 

As I recall our discussions four years or so ago our accountant was not concerned about just one item such as a bank account in Canada. She was concerned about the totality of items,ie bank account and routine daily/monthly banking practices, DL, credit cards, other financial ties. There was a lot of grey area, room for interpretation.


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## indexxx (Oct 31, 2011)

kcowan said:


> It is possible to get notices on MyAccount. But in my experience, they post the NOA but not the detail documents that back it up. Getting the NOA is an advantage because then OP needs to call Mom to get the details. Because it is clear to all of us that at least 2 years of taxes are due regardless of OPs current status, it would be wise to pay 2 years of taxes and then file a Notice of Objection on the basis of a bona fide but tardy claim of NR status. Otherwise the penalties and interest will just keep building on that first 2 years regardless.
> 
> (OP might find that paying the total amount CRA wants is cheaper than hiring an accountant. I had a similar situation with unpaid GST on a business account because I was tardy filing. We agreed to switch to annual filing and I got current and they did not levy the fines and interest. CRA removed them.)


At least when I was a NR, you did *NOT* pay the first two years of taxes once you were deemed NR by CRA. The two years was the time you had to be absent from Canada AND a legal resident in another country before you could declare NR for tax purposes, and it was retroactive to the day you left. So in my case, I lived in the Caymans, which is a tax-free country. Before I moved there, I spoke with my accountant (who had also done some NR living himself) and set it all up beforehand. So after the two-year period, I became NR for tax purposes and did not have to pay tax on those first two years (I simply did not file those two years, knowing that I would owe nothing anyway.) So my entire time out of the country was tax free. However, if I had been living in almost any other country in the world, I would have been subject to THAT country's taxation laws, the same as any other resident earning income. But if you are NOT a legal resident of the country you reside in, then Canadian law would almost assuredly require you to pay tax on your income. Unless you are in a tax-free jurisdiction, you have to pay somebody income tax somewhere.


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## My Own Advisor (Sep 24, 2012)

"Call a Canadian accountant, explain your situation, pay them for their advice. It may help you get a plan together to avoid worst-case scenarios."

+1


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## m3s (Apr 3, 2010)

I feel for you. I'm an employed nomad and dealing with CRA has just about destroyed me, and I'm very proactive. RQ is trying to put the nail in the coffin

I filled NR73 correctly in 2011 and they somehow interpreted my residency status erroneously. 5 years later I am still living in CRA and RQ hell

In my experience I call the international tax line, I speak with a knowledgable and reasonable person who agrees entirely with my case and then advises me what papers I need to submit for them to make the necessary adjustments. I submit said documents exactly as we both agreed, and 6 months later I get another basket case assessment. And the process starts again (multiplied by 2 because everything has to be filed twice with CRA and RQ in my case)

The international tax office advised me to pay up immediately even though it was erroneous, and once the reassessment was finalized they would reverse it. They did eventually reverse all interest charges, with not even a letter of explanation let alone apology or compensation for opportunity costs. To further complicate things I retroactively received income tax exemption for serving in MENA during 2011-2014 so I get to open this mess all over again 

If I were you I would call the international tax office toll free asap. They will probably tell you to pay up and then what you'd need to submit to sort it out.

Here's the only proof I have of their errors. Lesson learned is that CRA-RQ is an estranged family and you don't have to accept their word as final.


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## travelguy (Nov 11, 2016)

Good advice guys.

I'm going to call them. I can pay the 56,000 but for that sum, I could live in Thailand for something like 2-3 years. It's tossing the money straight into the garbage. Regardless of this, I want to make sure those other dates they did not ding me for, that I am not considered a Canadian resident. There is no way in hell I'm putting any more money into my Canadian bank accounts. 

That was the big mistake -- had I keep everything offshore, they wouldn't have been the wiser! 

I'm going to have to call up an accountant and get some advice. The thing is, I need one who deals with expats / nomads such as I. As you guys see, my situation falls into that grey zone so the interpretation can go either way (and knowing the CRA, it's probably going to go their way).

It doesn't help that Thailand and being a resident here is also a gray zone in the country -- they don't have tax laws or residency permits or anything like we have back in the west, so it's a double whammy trying to figure out my situation. I've been a non resident of Canada, yes, but I've also not been an official resident of Thailand, though I have been in some ways.

The key here is that as someone said, moving forward, am NOT a resident of Canada and won't be in the future. As far as I see it, those guys are trying to steal my money.


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## Eclectic12 (Oct 20, 2010)

travelguy said:


> ... I'm going to call them. I can pay the 56,000 but for that sum, I could live in Thailand for something like 2-3 years. It's tossing the money straight into the garbage.


I don't agree.

If you were to find out that you didn't owe the $56K but paid it anyway - then it's tossing the $$$ into the garbage. Paying what you legitimately owe is avoiding penalties/interest etc.


No offense but hopefully this situation will inspire others (or yourself for the next shift in tax residency) to investigate/plan ahead.




travelguy said:


> ... Regardless of this, I want to make sure those other dates they did not ding me for, that I am not considered a Canadian resident. There is no way in hell I'm putting any more money into my Canadian bank accounts.
> 
> That was the big mistake -- had I keep everything offshore, they wouldn't have been the wiser!


You seem to understand the benefits of being a NR but clueless about the fact that off shore *makes no difference*. Where one is a Canadian tax resident (actual or deemed), earning money in any manner off shore is still taxable.

Keeping the $$ offshore would delay CRA finding out but does not change that it is taxable by Canada.




travelguy said:


> ... The key here is that as someone said, moving forward, am NOT a resident of Canada and won't be in the future. As far as I see it, those guys are trying to steal my money.


Would you call a restaurant that didn't give you a senior's discount without proof "trying to steal your money"?

The bottom line here is that without notification from you as well as timely follow up to the communications CRA has sent you - the situation has been complicated.


Don't get me wrong ... I am hoping everything lines up to be an NR so that the tax bill is reversed. I just don't see the point of getting worked up about CRA trying to supposedly steal from you when you are expecting CRA to read your mind and guess what response you'd make to their letters.

Or to put it another way, you have had a hand in creating this situation.


Cheers


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## Manitoba (Dec 17, 2016)

Not clear if the OP filed a departure income tax return by 30 Apr of the year after departure.

Without that the CRA had no idea that he was no longer a resident and the back assessment if reasonable to do based on the information that the CRAS had.

I would try going back and making an adjustment to the last years residence return and see it the CRA will accept it. If so then they will revise the accessments for the years not resident.


If you pay the $56 k then it stops interest and penalities. If it is reversed then interest will be paid on the money while the CRA has it in theior posession.

See a tax specialist, paying the arrears is a matter of how confident you are that they will be reversed IMHO. If you are confident then don't pay but if not too confident then pay and stop the interest and penalities.

Good luck


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## marina628 (Dec 14, 2010)

There is your problem you have sent all money to canada that you are living off .Your first step should have been getting a bank acct outside of Canada.


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## marina628 (Dec 14, 2010)

I just wanted to add that I have a friend who lives in Cayman Islands for last 10 years or so and he had nightmares for first 4 years with CRA because he was sending minimal amounts of money to a bank acct he had with his father.He was sending about $1000 -$1500 a month to help his dad's living expenses but they hounded him for years to pay that tax on 'self employment money .His story was not so bad as over 4 years he only had to pay $7000 but he would not even have a magazine subscription in Canada now.I understand your work as I have been running online affiliate websites for about 12 years but every dollar going into my corporate acct and transferred to me I pay taxes on and you do need to file corporate income taxes even if income is zero.


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## Eder (Feb 16, 2011)

Obviously you are avoiding paying any taxes on your income ...I'm glad the CRA is calling you on it.


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## james4beach (Nov 15, 2012)

indexxx said:


> Again- were you paying income tax in Thailand?


Agreed, you must be a tax resident of one country. Pick your country, but there is a jurisdiction in which you are obliged to file and pay taxes. These are grey areas anyway... as I've written in other threads... where it's not always clear which jurisdiction you are a tax resident of.

But, you have tax obligations _somewhere_. That's either Canada or Thailand in this case.


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## james4beach (Nov 15, 2012)

By the way, I did something similar to this when I was living in Australia. I conducted my business operations from my apartment in Australia, even did my banking in that country, and had mostly online income including ad revenue.

In my case I continued to file Canadian tax returns and requested tax exemption in Australia as a non-resident, which seemed to work out fine.


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