In order to use your “dual citizen from birth” as a defense to being a “covered expatriate” and therefore subject to the S. 877A “Exit Tax”, you must (as both a Canadian and U.S. citizen from birth”) be subject to taxation as a Canadian resident. What does this mean? Are you actually required to live in Canada? What are the rules for determining whether one is “taxed as a resident of Canada”?
This could be considered from each of a “U.S.” and a “Canadian” perspective. “Resident in Canada” for tax purposes – from a Canadian Perspective
Calgary couple gets $18K bill after CRA questions residency for tax purposes https://t.co/WKOaW5DRyP – Resident or non-resident of Canada?
Living in Canada would be a “sufficient condition” for being subject to taxation as a Canadian resident (all Canadian residents pay tax).
Living in Canada may not be a “necessary condition” for being subject to taxation as a Canadian resident.
In other words, one could be treated as a “tax resident of Canada” without actually living in Canada. It seems clear that this is an issue that is decided on a “case by case” basis. That said, incredibly:
There are situations where one would want to be subject to taxation as a Canadian resident.
Here is information from the Canadian Revenue Agency (current as of the date of this post WHICH IS SUBJECT TO CHANGE). Continue reading →