[Verse 1] Sarah moved from Toronto down to Dallas last July Kept her cottage and her RRSP, now she's wondering why Tax letters keep arriving at her Canadian door CRA says residential ties matter more than before One-eighty-three days is the magic number line But ties that bind can make you Canadian by design [Chorus] Residential ties, where do you belong Primary ties are strong, secondary play along Spouse and home and kids, that's the primary three Secondary ties like banks and cards, they add complexity One-eight-three days or ties that bind Tax residency's defined, keep the rules in mind [Verse 2] Mike's corporation started here but moved to Bermuda's shore Board meetings held remotely, but where's the central core Mind and management location, that's the corporate test Place of incorporation matters, but control's the real quest Canadian source income follows you around the world Even when your residency flag has been unfurled [Chorus] Residential ties, where do you belong Primary ties are strong, secondary play along Spouse and home and kids, that's the primary three Secondary ties like banks and cards, they add complexity One-eight-three days or ties that bind Tax residency's defined, keep the rules in mind [Bridge] Deemed resident rules can catch you by surprise Sojourning more than half the year, despite your foreign ties Non-resident withholding tax on Canadian source pay Treaty shopping won't protect you if the substance doesn't stay Part-year residents must split their income streams Nothing's ever simple in these international schemes [Verse 3] Lisa works for Global Corp, they sent her overseas Three year posting to Hong Kong, but kept her health plan fees Primary ties are severed, secondary ties reduced Tax treaty says she's foreign now, from Canadian tax excused But rental income from her condo still gets taxed at source Twenty-five percent withholding follows its prescribed course [Final Chorus] Residential ties, where do you belong Primary ties are strong, secondary play along Spouse and home and kids, that's the primary three Secondary ties like banks and cards, they add complexity One-eight-three days or ties that bind Tax residency's defined, keep the rules in mind [Outro] When borders blur and money flows Tax residency rules expose Where you live and where you pay CRA will have their say
← Surplus Stripping Techniques | Tax Treaty Benefits and Applications →