Tax conditions for overseas Canadians
QUESTION: I AM a Canadian citizen and have recently moved back from Canada to Hong Kong. Will I continue to be liable for Canadian tax? ANSWER: CANADA does not levy taxes based on a person's citizenship. It levies taxes based on a person's residency in Canada. Consequently, a Canadian citizen who is not a Canadian resident will not be subject to worldwide tax in Canada.
That person will, however, continue to be liable for Canadian taxes on certain Canadian-sourced income, such as employment income earned in Canada, rent derived from Canada and interest on certain deposits in the country.
The factors that would be considered in determining whether you are a non-resident of Canada include permanence and purpose of stay abroad; residential ties within Canada; residential ties elsewhere; and regularity and length of visits to Canada.
This generally means that a person who wishes to sever his ties with Canada should be absent from the country for two years or longer, surrender provincial medical insurance coverage, cancel Canadian driving licence, Canadian credit cards, subscriptions to Canadian magazines, and advise various clubs that you have become a non-resident of Canada.
The house in Canada should either be sold or rented on a long-term basis. Personal effects in Canada should be kept to the absolute minimum. You should establish your residency in Hong Kong.