What are the general tax implications of acquiring Canadian permanent residence?
The Canadian Government imposes income tax on the basis of residency rather than citizenship. It is therefore possible to become a Canadian citizen and a non-resident for tax purposes. After becoming a permanent resident and prior to attaining citizenship, an individual would be required to pay Canadian taxes on worldwide income. However, the tax legislation allows for newly arriving permanent residents to establish an offshore trust into which may flow all of the non-Canadian sourced income, except employment income. The trust avails for a maximum period of five years and it is therefore possible to become a Canadian citizen and a non-resident within the life span of the trust.
The Canadian Government imposes income tax on the basis of residency rather than citizenship. It is therefore possible to become a Canadian citizen and a non-resident for tax purposes. After becoming a permanent resident and prior to attaining citizenship, an individual would be required to pay Canadian taxes on worldwide income. However, the tax legislation allows for newly arriving permanent residents to establish an offshore trust into which may flow all of the non-Canadian sourced income, except employment income. The trust avails for a maximum period of five years and it is therefore possible to become a Canadian citizen and a non-resident within the life span of the trust. The assets of a newly arriving immigrant are not taxed under Canadian law.
