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I received five "Moving to Mexico" enquities in three days and am answering this in general. Anyone contemplating the move should sit down with me or someone like me and expect to spend a couple of dollars to get it explained.
I would usually charge $700 for an in office two hour visit and $350 for an hour on the phone and maybe a five minute follow up
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Question
When I become a non-resident of Canada, Revenue Canada uses a point system
as to my taxes payable to Canada. I need to know what point system is used
and if i need to pay taxes to Canada as a non-resident.
I need to know the name of an accountant that can guide me through the
process of my move to Mexico.
Thanks in advance.
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david ingram replies:
If you go to www.google.com and type in - canada mexico income tax expert - I come up 1, 2, 3, 4 out of 38,000 so I have some idea of what you do. I am at a loss as to what the point system you are referring to is, unless you are referringto the point system which is used to determine if someone can become a peremanent resident of Canada, a sutuation completely reversed from your question.
Be that as it may, your taxation is governed by the source of the money and by Article IV of the Canada / Mexico Income Tax Treaty which reads as follows:
Article 4
Resident
1. For the purposes of this Convention, the term "resident of a Contracting State" means:
a) any person who, under the laws of that State, is liable to tax therein by reason of the person's domicile, residence, place of management, place of incorporation or any other criterion of a similar nature;b) the Government of that State or a political subdivision or local authority thereof or any agency or instrumentality of any such government, subdivision or authority.
2. Where by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then the individual's status shall be determined as follows:
a) the individual shall be deemed to be a resident of the State in which the individual has a permanent home available; if the individual has a permanent home available in both States, the individual shall be deemed to be a resident of the State with which the individual's personal and economic relations are closer (centre of vital interests);b) if the State in which the individual's centre of vital interests cannot be determined, of if there is not a permanent home available to the individual in either State, the individual shall be deemed to be a resident of the State in which the individual has an habitual abode;c) an individual who has an habitual abode in both States or in neither of them shall be deemed to be a resident of the State of which the individual is a national;d) in any other case, the competent authorities of the Contracting States shall settle the question by mutual agreement.
3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall by mutual agreement endeavour to settle the question and to determine the mode of application of the Convention to such person. In the absence of such agreement such person shall be considered to be outside the scope of Articles 6 to 21 inclusive and Article 23.
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As you can see, it is a taxing moment for all when the two governments invoke the tie-breaking rule. In 39 years of doing this, I have never seen the tie-breaker rule invoked with any country and Canada.
When you get your FM-3 (or maybe an FM-2 but I recommend an FM-3) visa. you will be entitled to be a year round permanent resident of Mexico.
If you are in Mexico more than 183 days in a calendar year, you are considered to be a resident of Mexicao and only interest or dividends or maybe the rental of a family farm or your old house would be put on a Canadian return.
Any income in Mexico would be exempt from Canadian Tax.
However, Mexico would tax you on your world income and give you a credit for any taxes paid to Canada.
I would be glad to assist you with your Mexican Opportunity.
David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
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