Members of this board,
There is a wealth of information regarding taking USC or not, the pros and cons of USC etc however, I am looking for the pros and cons of taking permenent residence in Canada. I have not been able to find the information for canada. if this has been discussed or you are aware of other forums that discuss this, i would appreciate it if you could point me to it.
we r2i'ed in Oct'06 with some specific objectives. we did not have gc at the time of our return. Our application for Permanent Residence for has now been approved. currently i am not planning to relocate to canada and am not really interested in it. but my wife would like to have that option open. I know that Canadian citizenship is a two step process. We currently have a visa for immigration and will have to land in canada by march. after than we can come back to india. now we have upto 2010 to make the decision about citizenship. if we want canadian citizenship we will have to live there for 2 years starting at the latest by 2010.
Now my questions are:
what are the tax implication of taking permanent residence with regard to canada and india ?
will we have to pay taxes to both india and canada ?
can we continue investing in indian equity market. we currently invest thru mf and ipos.
what about our usa investments. we have some money there in equities and cash.
we currently have 401k money in rollover ira and plan to withdraw it entirely between 2008 and 2009. Until march 2009 i will be in rnor and can withdraw without having to pay tax in India. I have had substantial income in 2007 and may be in 33% tax bracket. Hence an reluctant to withdraw the money this year. so if i start withdrawing from rollover in 2008 after activating perm. residence, will i have to pay taxes to canada too ?
is there someone in India who can guide us on these topics ? we would like to take atleast an informed decision and any help would be greatly appreciated.
As my questions have to do more with taxes and investments, i posted on this forum. if this needs to be posted somewhere else, please let me know.
thanks and regards
Canada permanent residence - Tax Implications
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doesntMatter
- Posts: 82
- Joined: Tue Feb 13, 2007 4:45 pm
Canada permanent residence - Tax Implications
http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html
suggests (please go thru with a fine comb - I merely read it casually) that you will become a resident of Canada for tax purposes only when you relocate to Canada and establish residence there (under deemed non-resident provisions because of India-Canada tax treaty and your residence and work in India), and not merely because you visit Canada for short period to acquire and subsequently maintain a Canadian permanent resident card (though acquistion of Canadian health coverage in addition to permanent resident card creates presumption of factual residence a.k.a. ordinarily resident)
http://www.escapeartist.com/efam11/Canadian_Immigration.html may also be informative.
http://law.incometaxindia.gov.in/TaxmannDit/IntTax/Dtaa.aspx has a link to India-Canada tax treaty (Article 4 is the relevant article)
-----------------------
Our application for Permanent Residence for has now been approved.
was interpreted by me as
Our application for Permanent Residence in Canada has now been approved.
------------------------
we r2i'ed in Oct'06 ... we did not have gc at the time of our return ...Until march 2009 i will be in rnor and can withdraw without having to pay tax in India. I have had substantial income in 2007 and may be in 33% tax bracket. Hence an reluctant to withdraw the money this year.
suggests that you are NRA in 2007 and makes me wonder how you ended up in 33% US tax bracket for 2007 - did you sell substantial employee stock options and/or redeem US savings bonds in 2007 and thus trigger recognition of ordinary income in 2007?
suggests (please go thru with a fine comb - I merely read it casually) that you will become a resident of Canada for tax purposes only when you relocate to Canada and establish residence there (under deemed non-resident provisions because of India-Canada tax treaty and your residence and work in India), and not merely because you visit Canada for short period to acquire and subsequently maintain a Canadian permanent resident card (though acquistion of Canadian health coverage in addition to permanent resident card creates presumption of factual residence a.k.a. ordinarily resident)
http://www.escapeartist.com/efam11/Canadian_Immigration.html may also be informative.
http://law.incometaxindia.gov.in/TaxmannDit/IntTax/Dtaa.aspx has a link to India-Canada tax treaty (Article 4 is the relevant article)
-----------------------
Our application for Permanent Residence for has now been approved.
was interpreted by me as
Our application for Permanent Residence in Canada has now been approved.
------------------------
we r2i'ed in Oct'06 ... we did not have gc at the time of our return ...Until march 2009 i will be in rnor and can withdraw without having to pay tax in India. I have had substantial income in 2007 and may be in 33% tax bracket. Hence an reluctant to withdraw the money this year.
suggests that you are NRA in 2007 and makes me wonder how you ended up in 33% US tax bracket for 2007 - did you sell substantial employee stock options and/or redeem US savings bonds in 2007 and thus trigger recognition of ordinary income in 2007?
Canada permanent residence - Tax Implications
Sent you a PM.
doesntMatter;30651Members of this board,
There is a wealth of information regarding taking USC or not, the pros and cons of USC etc however, I am looking for the pros and cons of taking permenent residence in Canada. I have not been able to find the information for canada. if this has been discussed or you are aware of other forums that discuss this, i would appreciate it if you could point me to it.
we r2i'ed in Oct'06 with some specific objectives. we did not have gc at the time of our return. Our application for Permanent Residence for has now been approved. currently i am not planning to relocate to canada and am not really interested in it. but my wife would like to have that option open. I know that Canadian citizenship is a two step process. We currently have a visa for immigration and will have to land in canada by march. after than we can come back to india. now we have upto 2010 to make the decision about citizenship. if we want canadian citizenship we will have to live there for 2 years starting at the latest by 2010.
Now my questions are:
what are the tax implication of taking permanent residence with regard to canada and india ?
will we have to pay taxes to both india and canada ?
can we continue investing in indian equity market. we currently invest thru mf and ipos.
what about our usa investments. we have some money there in equities and cash.
we currently have 401k money in rollover ira and plan to withdraw it entirely between 2008 and 2009. Until march 2009 i will be in rnor and can withdraw without having to pay tax in India. I have had substantial income in 2007 and may be in 33% tax bracket. Hence an reluctant to withdraw the money this year. so if i start withdrawing from rollover in 2008 after activating perm. residence, will i have to pay taxes to canada too ?
is there someone in India who can guide us on these topics ? we would like to take atleast an informed decision and any help would be greatly appreciated.
As my questions have to do more with taxes and investments, i posted on this forum. if this needs to be posted somewhere else, please let me know.
thanks and regards[/quote]
-
doesntMatter
- Posts: 82
- Joined: Tue Feb 13, 2007 4:45 pm
Canada permanent residence - Tax Implications
Bobus;30655http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html
suggests (please go thru with a fine comb - I merely read it casually) that
http://www.escapeartist.com/efam11/Canadian_Immigration.html may also be informative.
http://law.incometaxindia.gov.in/TaxmannDit/IntTax/Dtaa.aspx has a link to India-Canada tax treaty (Article 4 is the relevant article)
[/quote]
Will do that and get back to the board. In the mean time if someone is aware of tax consultants in India who deal with Canadian tax law and Indian tax law, I would appreciate it if you could pass me that information. I spent a good 3-4 months (not the whole time) reading US-India taxes, their implication etc and am finding it very difficult to start this journey for Canada-India taxes. I wouldn't mind paying some money to a professional.
[quote]
was interpreted by me as
Our application for Permanent Residence in Canada has now been approved.
[/quote]
Not sure if I am using the correct jargon here. Basically, we got our immigration visa stamped on our passports and will have to land by march to get our Perm. Res. Card.
[quote]
suggests that you are NRA in 2007 and makes me wonder how you ended up in 33% US tax bracket for 2007 - did you sell substantial employee stock options and/or redeem US savings bonds in 2007 and thus trigger recognition of ordinary income in 2007?[/quote]
Yes you are correct in your assumption. Will respond the number in a PM. Hope that is ok.